this post was submitted on 24 Sep 2024
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[–] noredcandy@lemmy.world 53 points 1 month ago (1 children)

Check out FedNow. Basically a domestic government run payment system. Still pretty new and growing.

[–] CosmicTurtle0@lemmy.dbzer0.com 33 points 1 month ago (1 children)

Christ...this needed to be major news a year ago. We really need to get banks out of the payment business but fear that they are pulling an Intuit and will make the FedNow system more challenging to use down the road.

[–] NateNate60@lemmy.world 3 points 1 month ago (1 children)

FedNow still relies on banks. The only way we can truly get the commerical banks and financial institutions out of the picture is with cryptocurrency (lol) or a CBDC (central bank digital currency). In short, a CBDC would operate like a Government-run Cash App or PayPal and the balance in a CBDC wallet holds the same status as paper money and is legal tender.

I believe that CBDCs are entirely necessary for a digital future. For the everyday citizen, the only form of "cash", as in "Government-issued legal money", is paper banknotes and pieces of coinage. This is wholly insufficient for a system where an increasing amount of business is conducted digitally, and all it does is invite middlemen like Visa to insert themselves like a leech and take profit off every transaction. Banks and financial institutions already have digital cash; account balances at the Federal Reserve are as good as cash to banks as far as the law is concerned, but the everyday layman can't just go into the Federal Reserve and ask to open an account.

This is exactly that CBDCs will solve. Anyone can hold real money (not just a promise to pay money) in a digital format and exchange it peer-to-peer or use it to conduct business free of fees and middlemen.

The only problem is that conservatives in America think that they can't trust the Government, so it's better to trust for-profit financial institutions instead. After all, the banks have never fucked it up before, right?

[–] knightly@pawb.social 3 points 1 month ago (1 children)

No need for crypto, there are plans on deck for a postal banking system that already include debit card service (and a government union for the workers who have to maintain the infrastructure). That's pretty much the end of the credit card mafia if it comes to pass.

[–] NateNate60@lemmy.world 1 points 1 month ago (1 children)

What is this service?

I really doubt it will be as revolutionary as you claim.

[–] knightly@pawb.social 1 points 1 month ago (1 children)

What service? Debit cards for postal banking accounts?

It absolutely would be because for-profit banks would have to compete with non-profit government services..

[–] NateNate60@lemmy.world 1 points 1 month ago (1 children)

What country is this?

In the US, we have credit unions. Credit unions are member-owned not-for-profit financial institutions that offer the same services as banks.

[–] knightly@pawb.social 2 points 1 month ago* (last edited 1 month ago) (1 children)

And credit unions offer accounts with lower fees and higher interest rates than commercial banks, whose only advantages are having more branch offices, ATMs, and a bigger marketing budget.

Postal banking solves this deficit by making every post office a branch of the national credit union.

[–] NateNate60@lemmy.world 2 points 1 month ago* (last edited 1 month ago) (1 children)

See this symbol?

If you have a card issued by a credit union, yours probably has this too. It means you can use any other credit union's ATMs that have this symbol without fees as if they were owned by your credit union.

There are thousands of credit unions across the US operating tens of thousands of ATMs. 7-Eleven ATMs are also part of this network.

I'm not saying that postal banking is a bad idea. In fact, it's a great idea, as a way to serve underserved communities and as a way to generate revenue for the Postal Service, if nothing else. But the idea of not-for-profit banking on a national scale isn't exactly a new concept.

[–] knightly@pawb.social 1 points 1 month ago (1 children)

If you're aware of what a back-of-card network is then you should understand how transformative a state-backed zero-fee interchange would be.

[–] NateNate60@lemmy.world 1 points 1 month ago* (last edited 1 month ago) (1 children)

That's essentially what FedNow wants to be, except the goal is to replace the debit card network.

Trying to start a new debit card network is a chicken-and-egg problem.

[–] knightly@pawb.social 1 points 1 month ago* (last edited 1 month ago)

Not when you're a government.

Mandate that payment processors have to support the state debit network and you'll be on half the terminals in the country in three months.