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Andrew M. Dresner's avatar

Alaina -- thank you for the comments! I don't get enough of these. You are correct of course that any electronic payment is subject to Reg E or Z. What I meant was not that they weren't subject to the regulations, but that they were not configured to deal with legitimate Reg E disputes like "never delivered" and "wrong item", or second-party fraud or ATO. They just don't have mature chargeback processes to deal with consumer commerce. So the disputes will still happen but the friction associated with those disputes is much higher than the card ecosystem which has been dealing with chargebacks since inception

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Andrew M. Dresner's avatar

It does not show any signs of displacing debit in the US. The closest would be use of Zelle which is instant availability but next day settlement. But Zelle can only be used at small merchants.

The challenges are different here: 1) we have two, non-interoperable Instant systems 2) Not every bank has adopted both yet 3) Most merchants don't accept them yet. 4) Debit is already fairly inexpensive (70% of transactions cost around 25 cents). 5) Instant systems don't have robust chargeback mechanisms which are needed to comply with Reg E (consume protection rules) 6) consumer inertia (Instant may be cheaper for merchants but does nothing extra for consumers

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