Comment by toomuchtodo
3 years ago
They could theoretically, but it is unlikely due to each transaction costing a few cents and the monthly FedNow fee being $25 (it is a utility run on a cost recovery basis). No banks charge for Zelle payments to my knowledge, for example.
This eventually replaces checks, money orders, Zelle, Venmo, ACH, and probably credit card payment volume over time (as seen with UPI in India and PIX in Brazil). Every deposit account can send to other deposit accounts instantly.
Given how generous credit card rewards are in the US, combined with the interest rates that get charged to people who buy things they can't afford, I don't see it replacing credit cards.
You need to see it from the merchants perspective. What if they offered you a 5% discount for paying with FedNow?
5% is still in the realm of cashback rewards, I use my Citi Custom Cash card to purchase gas and receive 5% back (it is cheaper this way even though the credit price is usually 10c higher per gallon)
is the fee on a per bank or per account basis?
Per routing number, so effectively per bank.
Edit: (throttled, can’t reply) GSIPs (globally systemic important banks) like JPMC with multiple routing numbers are the exception, not the rule.
Typically banks have many routing numbers[1], but it seems like they grossly undercharging banks here. Should be like $500/mo per routing number, that's still chump change for banks.
[1] https://www.gobankingrates.com/banking/banks/chase-routing-n...
Per bank. $25/month/account would be insane.
At a whole $25 per bank, why even bother charging anything?
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