FedNow: The Future of Payments??? | FedNow | B2B Vault | Episode 164

Yo, what's up everybody? It's Justin Lai from B2B Vault, the payment technology podcast sponsored by Nationwide Payment Systems, hosted by this guy, the Saiyung of payment processing himself, Allen Kopelman., and we'll be providing you educational information about fintech, payment processing, small business, and the technology businesses are using in the world today. And in today's podcast, we're going to be talking about the, uh, the, the— it's like the monster in the news, uh, the Godzilla of social media, FedNow. Oh my God, it's so scary. What's gonna happen? Are they coming for us? The feds are going to take your cash, bro. Uh, lightning is coming out of Thor's backside. I don't know what's— how— I mean, what— it's so stupid.

Uh, there's videos like everywhere on TikTok. Fed now, fed now, fed now! These people don't even know what they're talking about.

Yeah, I mean, um, we've been talking about it for a couple months now. Um, I don't want to say like— I, I don't ever feel like I'm like on some insider news thing, but But just because we've been, you know, I'm paying attention to what's related to fintech, financial technology. You know, I get those alerts. The algorithms are showing me stuff because I'm clicking on it. You know what I mean? So my newsfeed is pretty much fintech, fintech, fintech. So I, you know, I get alerts. I know what's going on, right?

We live and breathe fintech.

Yes, we do. Quality content, otherwise we ain't got it for you. Um, so yeah, man, the whole FedNow thing, we just been kind of getting punched in the face with for at least, at least 2 months.

People don't understand what it is. That's part of the problem. They don't understand what is FedNow. Yeah, what, what is it? And What is it all about?

So that's why we're here. That's why we're here. So let's, let's, let's get to it and figure out what this FedNow stuff is about.

One of the rumors is, is that all of a sudden some app is going to mysteriously appear in your phone, and then everywhere you go you're gonna have to pay with FedNow.

I'm, I'm, I'm actually the one that's supporting this rumor. I definitely been spreading that rumor.

Well, that—

it's gonna— I do think like you're gonna wake up one morning and just like the— what's the album? I've said this on the U2— the U2 album was on your phone. You didn't, you didn't install that, right? You didn't download it, right? So I mean, it's not like that, that technology isn't out there. So, and especially when we're coming talking about the government, right? So, you know, just like that morning we got the emergency alert at like 3:36 in the morning.

That sucked.

That was not fun. No, there was like— there was 10— I, I had— there was a lot of people in my house that time, so it's, you know, and literally everyone's phone was going off at the same time, so I thought that the world was ending. Um, so they have the capability of— with, you know, no problem.

There's some—

yeah, so I do believe we'll wake up one morning and FedNow will be mysteriously inside of your phone.

You know, I got major problems with FedNow, what, what it is, what it actually is. I mean, FedNow, we just did a podcast about how the government destroyed Bitcoin in, in one year.

Well, crypto, not just not Bitcoin, but crypto.

They destroyed the crypto industry in one year. FedNow, what are they thinking? They're just gonna wipe out all the banks, all the credit card companies, all the credit card processors. Serves everything. I think the public is smarter— smart enough to look at this if they know the facts. Yeah, this—

because what you just said is like literally what I've been thinking in my head.

I mean, that's just insane what they're— what, what that could— what, what would be thrown in there. I mean, we don't live—

I never even thought about the banks being a part of it because I kind of just— being in business so long, I always—

everything.

But no, I know, I mean, just saying like as far as the payment processing, because I always If you're using your bank to do your merchant services, dude, you're tripping, bro.

Uh, no, but let's understand credit cards and how they work and what's the— let's just talk about credit. So first of all, let's understand, let's, let's dive into this, you know, and, and answer a few questions. Number 1, what is FedNow? FedNow is a way to move money from cash, my bank account, fiat, to Justin's bank account using this FedNow thing, which the rumored cost would be 15 cents per transaction. Every merchant should sign up for it, blah blah blah. So now the flip side of that, all this— what, where are you gonna— how are you gonna process this?

How's it—

how's there going to be like a battery board? Is there going to be able to be a chargeback?

How long does it take do you get your money? Well, no, the merchant side, they said it's instant, instantly moving.

That's what they say. That's the— that's what— how the explanation is. So do you think like all these companies who process credit cards are just going to go, oh yeah, man, let's get on the FedNow bandwagon and let's all install FedNow and all the credit card machines and we'll just mark it up a penny or two? Don't worry that we're going to lose billions of dollars of revenue. Right? And MasterCard and Visa is going to lose billions of dollars, and all the banks are going to lose billions and millions of millions of dollars, right? How's that gonna— it ain't— it's not gonna work. Because first of all, let's understand the United States credit system, okay? The credit system in the United States is either A, you have money in your bank account that you're currently using Zelle, PayPal, Cash App, Apple Pay, right, to take money from your bank account. And there's probably a bunch of other smaller, lesser-known apps. Take money from your bank account, send it to somebody else. There's even a new thing called— from this company called EWS, it's part of the company who made Zelle— and they're gonna have a new way for people to pay on the internet, taking your money out of your bank account, sending it to merchant. Personally, I'm not doing that. Why? I can tell you, my son has lost money like that. Justin told the story on a previous podcast about his daughter sending $300 for sneakers through Cash App. Your money is not protected. The whole reason that people use credit cards is for a host— a plethora of reasons.

Why does the government not understand that?

They don't care. The government doesn't care. They just go, "Oh, let's just do this. It sounds good." It's a terrible way of thinking about it. But without delving in and understanding how the business works. First of all, in the U.S., everybody is on a credit system of unsecured credit.

Right.

You know, I just asked Camille, social media marketer. She's young. She's like 18, 19 years old. She had to get her first credit card. She had to give them money. On deposit to get a credit card, that's called secure credit. Yeah. When you use your debit card, which is taking money out of your bank account, that's also called secure credit because that credit is only what you have in that banking.

Right.

So you have secured credit and unsecured credit. There's way more unsecured credit being used every day than secured credit in the US.

Outside of the US, it's the The exact opposite, which it should be like that in America.

Well, you know, people, you know, and also is, is like you compare to a country like Canada, they have like 7 banks or 8 banks, that's it. In the United States, we have thousands of banks, and then we have other hundreds and hundreds of third-party neo-banks, right? And we have other companies who also issue credit cards. So you have all these other credit card, you know, tons and tons of different credit cards from tons of credit card issuers and tons of banks. So there's hundreds, if not thousands, of banks. Okay, so the system is not set up like that, and the system is set up like, oh, these companies give you rewards, so cash back, discounts. Uh, miles, points, whatever it is, that's what you're getting for using these credit cards. And at the end of the month, you either pay your bill or you're paying interest, you pay part of your bill, and that's how it works. Unsecured credit, right? So the, you know, the, that, that's how it works in the, in the United States. So why would a consumer want to use Zelle, PayPal, Cash App? We've already seen in Congress them going bananas on Zelle for thousands and thousands of people getting hit up with fake Zelle requests, fake PayPal, fake Cash App requests.

And we talked about that, right?

We talked about that on the podcast. Wells Fargo Bank got sued. Uh, Elizabeth Warren went after Wells Fargo, she went after the Bank of America, and you know, then Zelle came back and the banks came back, said there's a difference between people being stupid and fraud, people and fraud, and falling for a scam, right? So there's a whole difference in like—

scam is a scam, man. I mean, you people been falling for scams, then that's what— I don't want to say that the country's founded on, but I mean, we've been getting scammed a lot. And you know, people—

yeah, the scams are endless through email, through text message, SMS. It's— the scams are endless through there. I mean, now there's a— there's huge AI scam going on where they call your phone number, they record— they either get you to talk and they record your voice, or they just get your voicemail, and apparently that's enough for them to put into an AI software. Now they can clone your voice, type in a bunch of stuff, and make it sound like I'm calling Justin and saying, hey Justin, uh, my car broke down on the side of the road, hook me up, send me $200 by Zelle. And then Justin hears the message, he's like, okay bro, I'm gonna help you out, and he sends me $200. Meanwhile, he sent the money to some scam person, not me.

Calls me on the phone, say, hey man, that literally had not happened to me, but one of my, uh where my, my, you know, my people, my friends, right, um, from high school, we're still like in a group chat together. And there was this one guy, Orlando, and we had all knew that he was kind of going through a little tough patch in, in life, but we didn't know the extent of it. Anyway, one day we're just getting— I just look at my phone and there's just messages, messages, messages, and it's all from Orlando. It's like frantic, you know, that's like kind of frantic, but in a sense believable, right? Right. So I wanted to, you know, everyone's like, yo, should we— who's gonna send Obon some money? And then someone said, I got it, you know what I mean? Like, I'm gonna send it to him now.

It turned out to be a scam, and it was totally a scam.

Like somebody had— he lost his phone. They end up logging into his Facebook, you know, was reconnected to Cash App to the— I'm just like, how can you get— people are smart, man. It's nuts. So just be careful with the scams.

And also, like, they're hitting up older people with these phone messages, right? Because they could go copy my voice and make it sound like me, call my mom, tell my mom something, oh, that my mom needs to do something. Hopefully, you know, she fell for a few scams.

I really worry about that too. I think so, like, there's something that we all got to, like, you know, just like a little standard, like a question of something that only that person would be able to answer or something. Like, we— I'm sorry we, we even have to think like that, but like, we're in a state of—

yeah, like, you should have a code word with your parents. Like, oh, Mom, pineapple message. Yeah, pineapple. Okay, what's the message? Yeah, that's the swinger code word.

What?

I don't know nothing.

No, no, that was just an old video that was going on. No, anyway, man.

Okay, no, but I'm just saying, like, people should— people need to go do crazy stuff. Like, have, you know, like, I get stupid messages in my email.

What day of the week was I born? Or something like that. I don't, you know, something that you gotta, you know, something random that you'd be able to verify that you're actually talking to that person.

Yeah, it's kind of messed up because people— even on 60 Minutes, they just showed something about it. It's been going on to older people, and it's really, really bad.

But yeah, I worry about that with my mom for sure, because my mom will fall for it. I know she will.

So let's talk about, you know, the FedNow things. Do we need this FedNow? We already have Zelle, PayPal, Cash App. The new thing, early warning systems. We have Apple Pay, you can use, plus a whole bunch, just buy another 20, 30. I mean, you're free here.

Yeah, there's so many, Venmo, blah, blah, blah, right?

Yeah, Venmo, right? Do we need, do we need FedNow? Why do we need FedNow? Like, what do we need this for? Oh, it's going to be cheaper, it's better.

Do we need the government watching what we're doing, watching what we're spending our money on?

Yeah, do we need them to decide like, oh, you're getting gas right now, Oh no, you can only get $20, not $40. You need to go buy an electric car, whether you can afford it or not.

You took a 15-minute shower.

Yeah, it's not good. So, and then, you know, you combine FedNow with this central digital currency. I mean, it's already, you know, banks are starting to like check, check people like, oh, why are you taking $10 grand out of your bank account? Why are you getting $5 grand out of your bank Yeah, I tell them, you don't pay enough interest here at my bank, at this bank, so I'm gonna go to another bank that pays more interest to put some of my money in. And people are doing that, they're moving their money around. That's about the only good thing that's happened with this inflation is, is the— is interest rates are at, you know, 4 or 5%, which is kind of good. I mean, I remember back in the '80s when you were getting 10, 15, 20% on your money. Interest rates on loans were through the roof. Like, you went to go buy a house, you're paying like 10% interest.

Oh, right, right, right.

It was insane asylum.

Right now it's what, 7?

Now it's pretty high at 6, 7%. I mean, my house is financed at about 3%.

You're lucky.

Yeah, well, it was quite a few years ago, but it's hurting people now. But, you know, you know, we don't need to get rid of cash in the United States. The United States needs cash. There's a lot of people who have cash. There's a lot of businesses that function in cash. Tip— a lot of tipping is done with cash. There are a lot of cash businesses that still exist. Okay, so, you know, and FedNow, to me, like, when I first heard about it, I thought it was going to be like a big business-to-business thing, like, oh, I'm buying something for—

that's what it sounds like.

No, but that's what I thought it was.

No, literally, that's what it sounded like to me too, right?

So I thought it was like, oh yeah, and I was thinking about, yeah, how can I use this for some of my bigger customers that sell like a $50,000 worth of concrete or who are already connected with the government or something like that? No, no, like they're doing business with big companies.

No, I get it.

So they're, you know, so, and now, you know, like they don't do ACH because it takes 2, 3, 4 days to do ACHs. Where they have to make the company send a wire. I mean, one of the things that happened with wires was, is during COVID they made it so you can just wire money from your computer, right? And they just send you a text with a code, you put it in, you can send out a wire, right? You didn't have to go to the bank and sign 3 pieces of paper to send out a wire.

Yeah, they still busted you over your head for that.

For what?

The charge, the fee for doing that, sending a wire.

Um, Wires now, they're cheaper now because you don't have to go use an employee to do it.

I'm saying last year, 20, uh, during COVID you're sending a wire, it was $36.

Right now it's cheaper because you do it from your computer.

So I'm saying like if I did it through my bank—

well, that's personal. I'm talking about business.

No, I'm—

oh, business wires, 36? Yeah, they were $35, $36. International wires, $50. So yeah, FedNow sounds like a good solution for those kind of businesses. However, the problem exists with FedNow that they haven't addressed is when you send the money, what's— is there a dispute process? Who's handling that dispute process? How is that going to work?

And if the government is responsible for that, I don't see them doing a very good job.

And it's a problem. And, you know, am I giving up my privacy for using FedNow? Do I want to use central digital currency to, to, for my spending money because now the government's going to track me. Listen, people don't— you know, there's conspiracy people that say go buy gold, go buy silver, go buy precious metals, even buy crypto to protect yourself. But you know, this whole thing to me smells like WeChat. People don't understand. And WeChat, like in China, you want to go on the internet, you got to get out your phone, scan the QR code on your screen They verify that's you accessing your computer, okay, which is crazy. Although that means— that kind of makes sense. I wish that I had that like on my computer, that's how it's signed in.

But I got facial.

Yeah, me too, I have facial now. But I'm just saying, like, so you got to do that thing with the phone, facial recognition, sir, right? But I'm saying you got to do this thing with the phone, it opens up the door to your house, it locks the door to your house. Lets you get in the elevator, push the floor you want to go to. If you want to go to a different floor, it records it, knows whose apartment you went to. They know when you leave the building, they know when you left out of the complex, they know what you're doing all the time.

They know how long you were there, what days of the week, yeah, how often you go.

Oh, why did they— they could call you on the phone and go, hey Justin, there's a food store 7 minutes from your house, walking distance. Why did you walk 15 minutes to this other food store. Maybe you like the food there better, or maybe you wanted to see a friend over there.

Maybe I like to support that group of people, right?

But I'm just saying, I don't know. But they know what that is. And then the other thing is, is like, by using FedNow and central digital currency, which I don't see the need for either one of these, is this the— you know, they're talking about this social credit score Civil War thing, right? And the social credit score, I'm not down with that. Like, oh, you want to give me a social credit score?

Dude, the whole social credit score thing is disturbing, to say the least.

Well, it's overreach.

I mean, I don't care because, you know, I'm not— so for instance, the social credits thing is, you know, for— I don't know how true this is. It's true. I don't know, but you know, we're— I can't pull the files or whatever, but so apparently everyone out there that you guys been, uh, doing your pay for this one, put this in a cart thing at Walmart at the self-checkout. Well, you've been on camera, surveillance camera, this whole time. And even though that, you know, like you, you try to take a PlayStation or a large ticket item, you know, security was coming to get you. Well, you know, there a lot of times, you know, you— they're letting you slide with that pack of chicken or whatever it is that you're trying to get away with, right? Well, when this social credit thing hits America, which it will, and it is going to come— and the thing I don't like, all of y'all that's been thinking you've been getting away with something, you ain't been getting away with jack. And it— that, that you can Google because the company Uh, Walmart actually just sold all that data.

That's crazy. So that's what I don't like, is that you have the government trying to do stuff, but instead of them trying to do it because they can't, because it's an overreach of government powers, they're enlisting private business to do this stuff, do the dirty work, man, do the dirty work for them. And this has become very evident in the last 4 or 5 years. And in the last 2 years that a certain person in the White House has been there, it's gotten very, very much worse, right? And, you know, this is not good, the direction things are going in when it comes to how we handle money in the United States, because money is freedom. Right? You have the freedom to do whatever you want with your money, right? You can spend your money, you can buy whatever you want. Nobody's stopping you from going to buy this or that. No one's deciding like, oh, you used too much electricity last week, oh, you forgot to turn off the electricity when you went to work, so tonight you're going to be hot in your house. Or vice versa, you left the heat on all day, now we're going to shut your heat off tonight. Because they want to have smart meters in your home. They want to have this FedNow. This is all basically an overreach of government.

This is Homeland Security on steroids, man.

This is an overreach of government. I don't think anybody should go along with this at all. So I'm against— you hear it right here on B2B Vault— do not pay with FedNow.

Say no to FedNow.

Say no to FedNow.

Literally, don't even— don't go there.

Don't go there. Not even if you're a business. No matter how good it sounds, the end result is— the end result is going to be the surveillance of American citizens, and I don't like it.

And yeah, it's just got me thinking of all kinds of little spooky little things, man, like how they'll be con— you know, like, for—

yeah. I mean, we just—

it's a scary situation.

I think we just talked about it. One year they took down the crypto market. What are you gonna do? Fed now, all of a sudden you're gonna take out all the credit card companies, banks, banks, credit unions, credit unions, neo banks, investment firms, companies, investment companies. No, what are they going to do? The Fed now, you're not going to be able to buy stocks anymore? What are they going to say? Oh, you can't buy stocks, you can't have a 401k. I mean, how far is this going to reach into everybody's life? I say, say no to FedNow. FedNow is no good, okay? They're not even telling us what it's going to do, how it's going to work. There's just—

they're literally just saying that it's going to be the digital payment system of the future.

Yeah, but they're combining it with the central digital currency, which I don't believe that they could pull off. That. I don't believe the government has the, the wherewithal to just pull that off, you know. Although I see some banks being cashless in the bank, people will just find other banks to go to. People now are going to— they can't do— take their cash to bank them to like PNC because they have some cashless branches. Guess what? PNC is losing those customers. Those customers are going to community banks and credit union.

They totally lost me, right?

And people are going to leave those banks because they don't— can't get cash. I mean, who are they?

It's beyond that you can't get cash thing. It's just the, you know, like the contactless service, whatever you— I mean, it's like you walk into this building at the bank, right? There's no counter. Like, you can't walk up to a window and you have to like wait to be seated in this room to discuss your finances with this other person who's going to question you. Do you sure you need to pull out that much money?

Yeah, that's crazy.

Like, dude, what are you talking about, man? Give me my money, shut up, and go about your business. I don't need a lecture.

This is what I'm talking about.

I don't understand the banking system right now.

Example of the government putting pressure on the bank to put in policies to deter people from using cash. I don't know.

Oh, that way. Yeah, no, that's definitely— because that's definitely what it was, because it was during, like, not during COVID because we're just getting over COVID, I guess. I don't know. And it was in Florida. We were never under COVID restrictions.

No, but I'm just—

2 months. But yeah, but it was around that time, you know, like maybe like a year ago when I— yeah, it was a— it was literally a year ago because my daughter was here and she had just— she was just here, and so she left. So yeah, it was about a year ago.

I think people need to do your research. Look up what's FedNow. You don't need FedNow. You could do whatever you want now with your money. I think people—

Apple Pay is FedNow. Yeah, Apple Pay, Google Pay, you already have it. It's just the government one. They have their fingers in it.

Yeah, they want to watch what you're spending so that they can have 88,000 more IRS agents to this, to go look at how you spend your money.

That's a ridiculous thought, okay?

That's too much government oversight, too much government intrusion, okay? We don't want it to be a political show, but let's just point it out for what it is, because it's not a conspiracy theory, okay? No, this is not a conspiracy theory.

I'm not Alex Jones, because FedNow is coming. It's not like we're assuming—

but I'm just saying this isn't a conspiracy Theory shows. These are facts. The facts are we don't need—

factual—

no, the fact is we don't need FedNow. We don't need the government watching how much we spend, how much electricity we use. We don't need the government running our lives. We don't need U.S. to turn into China.

And there you have it.

That's it. FedNow. Say no to FedNow.

Kaputsky.

If you have questions about FedNow, you want to have a discussion about it, you want to debate me about it, you want to— you got some other views about FedNow, you want to ask us questions about it, um, go right ahead. I mean, I've been researching this FedNow for a couple of months. I've been watching it, been talking to different payment companies, credit card companies, or what are you guys doing anything with FedNow? Yeah, no, nobody, nobody's— nobody wants to do anything with it because it's basically a takedown, right? You know, that's what it looks like. You know, I said— I called it out from the beginning when I saw all this stuff going on with cryptocurrency. I go, it's a choke point 2.0. They're coming after crypto business and they're going to destroy it. And the evidence was last week. Last week when we went to the crypto—

Bitcoin 2023 was right, and we saw what—

how the business was decimated. Literally FedNow, FedNow and this digital currency thing could do that to the banking system in the United States. And then every—

the financial system of the United States, financial system could be ruined. Our financial system, I mean, it's not going to happen overnight, of course, like you said, but like, yeah, we're in a— we people have to stand up.

Yeah, people need to resist this whole move to FedNow. Resist it. Resist cashless. Your bank says, oh, we don't do cash. Say, well, I'm going to move to another bank.

Indeed.

You know, and that's what it is. So yeah, now that's the, that's the podcast about FedNow.

Say no to FedNow. Anyway, thanks for listening. Check us out on Facebook, Twitter, Instagram, TikTok, LinkedIn. Follow us on YouTube. Turn on the notifications. You'll never miss another episode. B2bvault.info. Check us out. I'm in the process of redesigning that. I'm almost done actually, so be on the lookout for that. Um, other than that, got none. If you need a merchant account, head over to nationwidepaymentsystems.com, hit the solution finder, and get everything that you need right then and there.

Peace out, carpet. Peace. You want me to do the thing about QuickBooks?

Yes, that's what I want you to do, sir. Okay.