a16z Podcast 16 Minutes on the News #5: Fed Real-time Payments, Death of Retail
Aug 11, 2019
Angela Strange, a general partner at A16z’s FinTech team, dives into the launch of the FedNow real-time payment service by the Federal Reserve, discussing its potential to enhance financial equity and streamline transactions, especially for those living paycheck to paycheck. She contrasts the U.S. payment landscape with advanced systems in other countries. The conversation also tackles the decline of traditional retail, spotlighting Barney's bankruptcy and the transformative impact of e-commerce on shopping habits.
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Real-Time Payments Importance
- Real-time payments matter significantly for the lower half of the population living paycheck to paycheck.
- Unpredictable payment delays force them into a juggling act with overdraft fees.
US Lags in Payments Technology
- Many countries, including the UK, Singapore, Canada, and Mexico, have had faster payment systems for over a decade.
- The US lags behind in implementing real-time payments infrastructure.
Challenges for Real-Time Payments
- The Clearinghouse's real-time payment network, launched in 2017, faces adoption challenges.
- Smaller banks hesitate due to potential Fed involvement and distrust of larger banks.