When I deleted my Facebook account, the social media giant made me click through several prompts to validate my decision, and even then, the website informed me I would have 30 days to reinstate my account.
When I bought my house, I had three days to rescind the deal. When my child attended college, we could get tuition money back if she canceled her classes within two weeks of the start of the semester. Even most items purchased on eBay can be returned within a few days for a full refund.
These are examples that acknowledge a tendency to change our minds. Even after careful research, consultation and consideration, people change their minds — and while I don’t have the statistics to back it up, I would bet it happens quite often.
That’s why I wonder about the future of FedNow, the new real time payments capability the Federal Reserve offers. Prior to its July launch, there was a lot of talk about the importance of real time payments processing, the market demand for it, and the need for banks to come up with ways to compete with non-bank financial companies like Venmo, Zelle and Apple Pay. On Oct. 3, the Federal Reserve reported 129 banks and credit unions are using the FedNow network, including 49 in the 12-state Upper Midwest Region. In addition, 20 service providers are supporting payment processing through the network. I applaud the early adopters, but the jury is still out as to whether the service will become the norm anytime soon among community banks.
If the service stalls, it won’t be because of any kind of tech deficiency. It will be collective public distrust fueled by fraud. While the numbers are fuzzy, most people are familiar with incidents of fraud related to instant payments. In the classic trade-off between convenience and security, real time payments cross the line into uncomfortable territory. Most people want an opportunity to change their mind, to take it back. Sometimes “real time” is simply too sudden, particularly when we have little or no experience with the vendor.
Bankers need to listen to their customers as they consider their options for offering instant payment services. My hunch is most people are more tentative than sure when it comes to payments — they prefer a little float, or a little time to change their mind even after hitting the “send” button.