alt Hacker NewsAll payment systems are centralized. Zelle is owned by the largest US commercial banks ("Early Warning Services"), Congress directed the Federal Reserve to build and offer FedNow as a utility so smaller banks would not be excluded from offering instant payments. It costs $~30/month (last I checked the rate sheet) to plug into it. The instant payments are the utility, your opportunity to innovate is using this as a component of your user experience.
Propose some innovation here, I am interested, as someone adjacent to payments in financial services. Besides instant payments, the most we've seen is closed wallets (Venmo, Cash App) no longer needed with broad instant payment access from most demand deposit accounts and Buy Now Pay Later (BNPL) (and I argue BNPL is simply dressing revolving credit card debt up as innovation).
> Why doesn't the US private ecosystem manage to lower costs similarly? (Zelle comes to mind). It is interesting that this has happened in more highly regulated countries where the free market likely could not have come up with a cheaper solution on their own due to the same overbearing system that effectively forces adoption of this centralized solution.
Because it is a grift ("regulatory capture") [1] [2]. The "overbearing system" is the result of regulation to bring the consumer excess of cheap payments to an entire country's financial user population. Why does Jamie Dimon not like stablecoin yield [3]? Because JPMC makes almost $100B/year in interest income taking customer deposits and lending against them, which stablecoins would compete against by operating as a form of narrow bank, parking the underlying deposits in risk free US Treasuries [4].
As a US financial services consumer, it is hard for you to avoid the rake of the machine built to skim off of you as you hold onto fiat or move it, but the rest of the world can avoid being captured by it (as this piece demonstrates). Also, Europe can't regulate Stripe as easily as they can Adyen. You don't have to be the biggest or the greatest, it just has to work "good enough".
[1] https://www.thebignewsletter.com/p/the-109-billion-bank-hust...
[2] https://www.thebignewsletter.com/p/the-cantillon-effect-and-...
[3] https://www.politico.com/news/2026/05/29/dimon-jpmorgan-cryp...
Replies
> Propose some innovation here, I am interested, as someone adjacent to payments in financial services. Besides instant payments, the most we've seen is closed wallets (Venmo, Cash App) no longer needed with broad instant payment access from most demand deposit accounts and Buy Now Pay Later (BNPL) (and I argue BNPL is simply dressing revolving credit card debt up as innovation).
UPI for instance only works with a physical SIM. Your phone number on the account must match the physical SIM on the device. This indirectly relies on India's insistence on KYC (for accounts naturally) on issuance of physical SIMs. "Innovation" here would be a player who can support VOIP based phone numbers (maybe by complying with phone number KYC in some other way).
UPI also makes it quite confusing to deposit money to a particular account you own. You could share a specific identifier (string or qr) based on your account but the other party generally assumes they can send you money using your phone number, and sometimes follows through with that.
(I don't have a finance background.) There any multiple instances of a one-size fits all user experience decision which strikes me as a result of the centralization and removal of competition (in efforts to drive up adoption).
I don't disagree with most of your reply (thanks for the thoughtful citations too). But i wonder why the free market cannot lower cost/settlement time similarly.
> All payment systems are centralized
Except for blockchain based ones
I loved your explanation and POV on this.
> Propose some innovation here, I am interested, as someone adjacent to payments in financial services.
Well, as a brazilian who is used to pix and has also faced the bad payment ux in american, I think a possible solution should be adding the missing Pix-like layer above the existing US rails.
One of the best part that makes Pix an incredible experience, It’s that the app almost doesn’t matter. I can use one bank, you can use another, a merchant can use a different provider, and it still works through the same basic language: QR code, Pix key, payment request, confirmation screen. I can even transport my "pix key" to another app/bank provider.
So maybe the US opportunity is a agnostic interoperability layer on top of FedNow/RTP/Zelle/bank APIs: universal aliases, QR payments, routing, fraud checks, receipts, and reconciliation. Making instant account-to-account payments feel universal before the government forces a universal standard.
I don't think consumers broadly should be the main goal first, the best initial path should be small-business, marketplaces, rent, etc.
If someone could own that neutral UX/addressing layer, that seems much closer to the useful part of Pix than just another closed wallet.