The payment industry is still based on business processes that were introduced by the Fugger family in medieval times. If we look at today’s payment processes, they’ve only been updated via modern technology. The principles of the workflows remain the same.
This is in stark contrast to the standards in other aspects of the economy. And the business implications are enormous, though they’re not fully understood—perhaps because no one likes to think about them.
To illustrate, imagine what Volkswagen or GM would say if a logistics company were to propose the following:
“We will transport your cars to Mexico. Unfortunately we cannot tell you how much you will pay, nor can we tell how much the recipient will pay. We also have no clue how long the shipping will take. By the way, if you want to track your cars along the way you must pay extra. We are very likely to use one or more subcontractors but we will not tell you who—in fact we actually can’t tell you who. Be prepared to pay extra charges of an unspecified amount. And last but not least: we rent out the cars on the way to Mexico so we can pocket a little extra cash, OK? If something goes wrong or you have questions, please be sure to send us a note!”
Now this is a little exaggerated but the principle is absolutely true.
The sad fact is, the payment system between banks was set up decades ago and to change it, all the banks would need to sit down together and agree on a different process…. good luck!