Snarky answer - there's no real motivation to change it and from an institutional perspective it's not broken.
- it costs a lot to fix or redesign a money system moving billions of dollars in volume per day
- change is risky
- any impacts on reliability would be unacceptable and have significant economic impact [both direct and indirect]
- stakeholders that fully understand the existing system and have the knowledge to redesign it are part of that system and benefit from it
- as an insider, it's hard not to make money within the system
- it's a closed ecosystem - access to the system is controlled by the established players (like Wells Fargo, BoA, Visa, Mastercard, etc.) and they will revoke access if you threaten their position.
- Insiders are making so much money at this game that end consumers have little leverage at this scale.
Paypal, stripe, venmo, zelle, square, name-your-favorite-fintech-start-up are all working within the existing system by exposing easy to use integrations and interfaces. They aren't really fixing anything, just wrapping it up, putting a bow on it and making a handful of basis points on your transactions.
The RTP system is a chance to fix it but I suspect it will take years for that to replace the existing systems. I've heard it discussed as an additional feature not a replacement.
[I know HN likes proof but any real numbers I can't disclosed due to NDAs. I'm basing my opinion on the margins I saw and heard referenced while working at a smaller financial institution]
Yeah, the only good use cases I heard for wanting real time payments had to do with businesses not wanting to keep cash reserves on site at all times. The two I recall were
(1) in businesses that have variable payment demand (think scrap yards that buy scrap material from anyone that walks up) and they currently handle this by keeping large amounts of cash on site in a safe
(2) some states where when a hourly employee is terminated, due to regulations it's easiest to pay them out for hours worked on the spot and this is currently usually handled in cash that's kept in a safe on site
I might be forgetting some details on the whys but it seemed like they wanted a way to avoid having to secure cash funds.
- it costs a lot to fix or redesign a money system moving billions of dollars in volume per day
- change is risky
- any impacts on reliability would be unacceptable and have significant economic impact [both direct and indirect]
- stakeholders that fully understand the existing system and have the knowledge to redesign it are part of that system and benefit from it
- as an insider, it's hard not to make money within the system
- it's a closed ecosystem - access to the system is controlled by the established players (like Wells Fargo, BoA, Visa, Mastercard, etc.) and they will revoke access if you threaten their position.
- Insiders are making so much money at this game that end consumers have little leverage at this scale.
Paypal, stripe, venmo, zelle, square, name-your-favorite-fintech-start-up are all working within the existing system by exposing easy to use integrations and interfaces. They aren't really fixing anything, just wrapping it up, putting a bow on it and making a handful of basis points on your transactions.
The RTP system is a chance to fix it but I suspect it will take years for that to replace the existing systems. I've heard it discussed as an additional feature not a replacement.
[I know HN likes proof but any real numbers I can't disclosed due to NDAs. I'm basing my opinion on the margins I saw and heard referenced while working at a smaller financial institution]