Aaron Klein: Days to Clear Check
on Friday, October 7, 2016Aaron Klein Money Quote saying the Federal Reserve needs to allow financial transactions to speed up and financial technology providers to innovate. Aaron Klein said:
“It seems remarkable that in a world in which you can deposit a check from your bedroom or use PayPal or Venmo to send money across the world in seconds, it can still take two to five days to clear a check, or that debit-card transactions are processed only once a day” — Aaron Klein
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In this quote, Aaron Klein seems to be highlighting the contrast between rapid technological advances in digital financial services and the relative slowness of some traditional payment methods still commonly used. Some key points:
- He notes that modern conveniences like remote check deposit, PayPal and Venmo allow near-instant money transfers anywhere in the world from a mobile device.
- However, Klein argues it is strange and outdated that basic check clearing still takes 2-5 business days given current tech capabilities, showing the process has not kept up.
- He also observes that debit card transactions are still only settled once per day, which seems slow compared to real-time digital payment options now available.
Overall, the quote conveys Klein’s view that while financial innovation has delivered lightning-fast digital payments, the backend infrastructure supporting older paper-based and card-based systems has lagged in achieving similar speeds, despite being fully possible with today’s payment networks and technologies.