The end result is that systems like ACH get locked down to the 5,500 depository institutions who are able to meet the vast capital and insurance requirements needed to participate in that system. It’s the only way that system can work.
-
-
Replying to @matthew_d_green @ncweaver
Another end result is that systems like ACH end up using hilarious 1970s technology, because there’s one big institution handling credit issuance (which it’s good at) and technology development (which it clearly sucks at.)pic.twitter.com/bgYc1lHnEw
2 replies 0 retweets 5 likes -
Replying to @matthew_d_green @ncweaver
(Look at that hilarious 8 byte unused MAC by the way. Surely we can both take a minute to laugh together.)
2 replies 0 retweets 0 likes -
Replying to @matthew_d_green
And give me a $2B IT budget in your hypothetical, I'll take A and all that could be fixed. But I'd be happy with the gatekeepers. It comes down to philosophy in the end: I'm OK with a significant number (in this case 5000) gatekeepers of substantial legal responsibility.
1 reply 0 retweets 1 like -
Replying to @ncweaver
No, you would not. As a depository institution with $2B you would be one of the smaller banks in the Fed system. You would not be able to make the institution replace a 50 year old technology stack. This is a fantasy, Nick.
1 reply 0 retweets 1 like -
Replying to @matthew_d_green
Your hypothetical wasn't $2B on deposit, it was $2B to spend on IT, no? $2B IT budget for the Fed would be massive.
1 reply 0 retweets 0 likes -
Replying to @ncweaver @matthew_d_green
If its $2B on deposit, and therefore 1% of that say as IT budget, fuck it, I'll just use a translation layer over ACH, call it, hmm, zelle, and be done with it.
1 reply 0 retweets 2 likes -
Replying to @ncweaver
And this service would only be workable in an environment where a tiny number of banks could work together as a cartel, ensuring their technology had preferential access vs. outside competitors. And you’d do this by offering poor customer reversibility.
1 reply 0 retweets 2 likes -
Replying to @matthew_d_green @ncweaver
The end result of this effort would be customer harm, huge inefficiencies in service cost, and slowed development of new technologies. Plus it would cost billions. We’ve established that you’re ok with this. We’ll just have to disagree there.
1 reply 0 retweets 1 like -
Replying to @matthew_d_green @ncweaver
PS My hypothetical was that I give you $2B to start a business, and you use that money to convince the Fed to upgrade ACH or you build something new. Scroll up.
2 replies 0 retweets 3 likes
Can... I have the $2B please?
Loading seems to be taking a while.
Twitter may be over capacity or experiencing a momentary hiccup. Try again or visit Twitter Status for more information.