Is it something that takes more labor or tech and therefore they charge? How is transferring from a bank in one to three days different from transferring right away, if they’re similar by method?
In: Technology
There are a couple concepts at work here. The first is that charging for a service doesn’t really have anything to do with how much labor or tech it takes, it instead relies on how much people are willing to pay. If something takes 2 cents of effort and people are willing to pay $5 for it then you sell it for $5. If it takes $100 of effort and people are only willing to pay $5 then you just don’t do it. People are willing to pay for instant transfers so there is a charge, even if it was just as easy as a longer wait.
Another issue is that “instant transfers” aren’t actually instant. They still take a few days, just behind the scenes. What happens is that the payment facilitator is covering the transfer themselves by basically providing a short term loan. Even if all those transfers go off without a hitch (and they won’t) it still means that millions of people have transfers in progress at any given time. That equates to tens, or more likely *hundreds of millions of dollars* loaned out at any given time.
If they weren’t covering the processing time of the bank transfers with those loans then they could be investing that money and earning a profit. So instead they are going to charge for the privilege of using that money.
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