16 Jan 2015

More Flexible Payments

The systems we use to transfer money are rigid and inflexible. For example, cheques shouldn’t bounce if sufficient funds are not available. Instead, the money should be paid when it’s available. Or as much money as available should be paid immediately, and the rest later. Bounced cheques only create more unproductive work on both sides.

This principle applies to a lot of payments. If I want to pay my credit card bill, and I have insufficient money in my bank account, I should still be able to trigger the payment, and have the bank immediately pay as much money as is available, and the rest when it’s deposited into the account. This will also help prevent money from being accidentally spent on less important things due to forgetfulness or temptation.

Similarly, why can’t I do an IMPS or NEFT transfer to another account, even with insufficient funds, and have it execute when funds are available? Or have as much money as available sent immediately, and the rest when it’s available? Currently, I have to set a reminder in Google Calendar saying, “Transfer X amount of money” on the 1st of the next month (when I get paid). This is backward. I should be able to request a transaction and have it execute when possible. This will make bill payments more convenient as well.

Payments should be simpler and more flexible, causing less useless work on both sides.

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