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Well it is live fed now the new instant Payment system from the Federal Reserve That will replace credit cards Usher in A central bank digital dollar and Replace cash forcing you to use a system That could be switched off for you at Any time if you post the wrong meme on The internet guys I recommend you buy Gold emergency food and gas stoves if You live in New York but anyway is fed Now actually anything like what the Conspiracy theorists say well they Didn't just turn on Skynet Skynet defense systems Pony what the hell is going on it's not Self-aware so what functions does this New system have I ended up getting a Microchip implanted inside my hand to See if I could be uh the first person in The world to pay for something out in The real world using uh just their hand No it doesn't allow you to pay for Things using a chip in your hand Although in the future I guess it could But for now fed now is just a faster Version of ACH or wire transfers which Those two typically take at least one Business day to go through sometimes Longer it's the fed's answer to Competition from cryptocurrency where Transactions take a few seconds and just Cost a few cents unless you're using Ethereum in this video we are going to Tell you exactly what services fednow

Provides which banks are on the early Adopter list and which Services you can Hope to see in the future and also I'll Tell you if you should get rid of your American Express card or not That is uh well and truly not Bulletproof but before we start my name Is Ben Hedges you can follow me here for More credit card personal finance and Luxury travel videos you can also follow Me on many of the micro content sites Like Instagram Tick Tock Etc my handles And usernames are on screen now also This video is brought to you by Weeble And you can get up to 12 free stocks When you sign up and deposit any amount Of money in a new Weeble brokerage Account link for that is below as well So on Thursday July 20th fednow was Switched on the FED said in a press Release Banks and Credit Unions of all Sizes can sign up and use this tool to Instantly transfer money for their Customers any time of the day on any day Of the year the FED identified 35 early Adopting banks that have signed onto the System and are now developing ways to Use it these include JPMorgan Chase U.S Bank and Wells Fargo as well as a load Of other small Regional Banks but when I Opened up my Chase account this morning I didn't see Fed now listed on their Payment center page so when will I be Able to use it and what fees will I pay

For the service let's talk about the Cost first because we do actually have The fee schedule that the FED is going To charge the banks here it is so to Send a payment it will cost Banks 4.5 Cents to send there's also a monthly Participation fee of 25 per month for Each routing number that receives Payments and a one cent fee to request a Payment although many of these fees are Discounted for the rest of 2023 and That's significantly more than ACH Transfers where fees are less than half A cent for the banks to send ACH does Have a few other fees associated with it But it is cheaper but remember that's Only the fee that the FED is charging The banks the average ACH transfer costs 29 cents that's way more than half a Cent so the banks are definitely going To add on to this Chase for example Currently charges one percent of the Transaction up to 25 dollars for Same-day ACH and real-time payments Although real-time payments only work With certain Banks now perhaps with fed Now those real-time payment fees will Come down somewhat but I think it's Still going to at least be what they Charge for ACH a Chase for example That's 2.50 per transaction so this Isn't a system like venmo or Zell that You could use to transfer money amongst Each other this is a system for larger

Transactions all right I think the Average fed now payment is probably Going to be measured in the thousands Rather than in the hundreds or tens of Dollars you need it to be a large amount Of money to make the fees worth it You're not going to pay Chase 2.50 to Process a Fed now payment for a five Dollar cappuccino and who drinks five Dollar cappuccinos anyway I only drink Eight dollar coffees this is actually Dollar cup of coffee but anyway that's Irrelevant but with fed now you would in Theory be able to go somewhere like a Car dealership and send them thirty Thousand dollars or so for a new car Over the fednow network and they'd be Able to receive it instantly and Securely that's way more convenient than Having to go to a physical branch of a Bank and pay for a cashier's check that You then take to the car dealership but For this and a few other reasons I don't Think fed now is going to replace credit Cards either credit card merchant fees Are the other way round to the fees Charged by fed now okay so with fed now It's the person sending the money the Bank that's sending the money that pays That 4.5 Cent fee and then obviously That bank is going to pass on higher Fees to their customer probably at least 2.50 or more with credit card merchant Fees the merchant is paying two to three

Percent so you're not gonna want to go Into a coffee shop like we said and pay For your Eight dollar coffee yes sorry I'm not going to use the five dollar Example anymore it's too low class but Anyway pay for your Eight dollar coffee And pay a 2.50 fee okay that's Ridiculous then what about a Medium-sized transaction of several Hundred dollars that may be acceptable To the person paying in terms of fees All right paying 2.50 or something but There's another problem fed now Transfers your own money and many people Are not gonna like that I like to pay The things with other people's money and Then pay those people back I love other People's money And that's a huge reason why people use Credit cards you see when you use a Credit card you are protected by U.S law For any purchase over 50 and many credit Card companies like Visa American Express Etc actually have full zero Dollar liability for every transaction That means the company is liable the Credit card company is liable if there Is a fraudulent transaction on your Account they will wipe it or do a charge Back and bring that money back into your Account okay your own money is protected By a barrier of their money that is not So for ACH or wire transfers or fed now These are systems where you actually

Transfer your own money from your Account to the other person's account ACH and wire transfers tend to be used By parties that trust each other and may Have even signed a legal contract like Business to business transfers or Consumer payments for large items such As cars hot tubs or home renovations so That's another reason why I don't think The FED now instant payment system is Going to replace credit cards and that's Before we even mention the other perks On credit cards like points cashback Airport lounge access Etc so when will You be able to use fednow well we're not Sure yet since Banks only just got Access to it it's going to take some Time before they set up their systems And implement it for consumers also Remember both the sending and receiving Bank have to be signed up for fed now For it to work so it's not going to work With every single transaction that you Want to make and that's actually Currently the same with the real-time ACH transactions that you can do come to Think of it fednow is basically the same Thing as the RTP Network run by the Clearinghouse which is what the Real-time ACH transfers run over that Network has been running since 2017 so I Guess fed Now is really just the FED Catching up with the private sector Anyway I'm excited to send my first ever

Fed now payment whenever that may be Probably not for quite some time and Guys let me know what you think about All this in the comments below don't Forget you can get up to 12 free stocks From Weeble when you sign up and deposit Any amount of money in a new brokerage Account absolute minimum value is 34 but If you're really lucky and you get all The best stocks it could be several Thousand dollars or more Weeble of Course it is a zero commission investing App it's gonna like Robin Hood but with Way better charts and tools I like to Call it Robin Hood for grown-ups anyway Link is below for that deal if you want To check it out please subscribe to the Channel if you're new and we'll see you Next time bye