Payment on demand

The U.S. government may soon give Venmo and Visa a run for their money. Federal officials on July 20 launched FedNow, its first real-time payment system, which allows consumers to transfer cash immediately to and from their bank. Behind-the-scenes processing delays currently affect debit card purchases and other types of financial transactions, but consumers whose banks join FedNow can pay bills or transfer funds nearly instantly, and merchants can receive payments just as fast, rather than wait until the next business day or longer. Although only about 35 credit unions and banks—including Wells Fargo, JPMorgan Chase, and U.S. Bank—are participating in the new service alongside the U.S. Treasury, the system is available to more than 9,000 banks and credit unions nationwide.

Federal officials expect customers will eventually be able to pay instantly from their checking accounts (via banking apps or websites using FedNow) when making purchases in stores or online. More than 50 countries, including South Korea, China, and Brazil, have similar instant payment systems, but it will take a while before Americans use instant transfers to the extent residents of India do. Such transactions there last year reached 90 billion.

Credit card companies could be the biggest losers if FedNow takes off. Card issuers netted $31.9 billion in interchange fees in 2022 even after subtracting reward payouts to customers and partner payments, according to data from LendingTree. FedNow doesn’t compete directly with cash transfer companies like Venmo, Zelle, or PayPal, but it could help banks create their own apps and compete in the $3 billion peer-to-peer payment market.

Work less, do more?

Can employees work a four-day week and be more productive, healthier, and more satisfied with their jobs and work-life balance than when working five days a week? Yes, according to the advocacy group 4 Day Week Global, which on July 26 released results from its recent survey of almost 1,000 workers in 41 U.S. and Canadian companies who tried a four-day week for one year. Nearly 70 percent of employees who self-reported their physical and mental health and satisfaction said they experienced less burnout after reducing their hours from 40 to about 33 per week. Company executives said workers remained productive, revenues increased by 15 ­percent, and they attracted new talent with the shorter workweek. Almost half of the employees said they would seek higher wages if their next job required five workdays. None of the companies in the study planned to return to a five-day schedule. —T.V.