Posts Tagged ‘aaron klein’
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
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- However, Klein argues it is strange and outdated that basic check clearing still takes 2-5 business days given current tech capabilities, showing the process has not kept up.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.
Aaron Klein: Slow-Clearing Bank Settlements
on Thursday, October 6, 2016Aaron Klein Money Quote saying low-income consumers subsidize wealthy and must pay to use their own money. Aaron Klein said:
“Lower-income Americans, who disproportionately use cash, prepaid cards or debit cards, get little to nothing and are in effect subsidizing the wealthy through the payment system. They also deal with a slow clearing and settlement system that causes additional expensive overdraft fees” — Aaron Klein
In this quote, Aaron Klein seems to be critiquing how certain payment methods and processes within the current financial system have inequitable effects and disproportionately burden lower-income individuals. Some key points:
- He notes that lower-income Americans rely more on cash, prepaid cards and debit cards compared to higher-income groups.
- Klein argues that this demographic “get little to nothing” in terms of rewards or benefits from the payment system, yet effectively subsidize wealthier customers through fees and merchant prices.
- He also observes that the slower clearing times for checks and daily debit card settlement contribute to more expensive overdraft fees for those with limited funds.
Overall, the quote conveys Klein’s view that traditional payment infrastructure offers few advantages to low-income users while exposing them to greater costs, in effect transferring wealth upwards through an inequitable system that has not kept pace with technological capabilities to benefit all consumers more equally.