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OpenTransact a tiny payment standard

22 pointsby pelleover 15 years ago

5 comments

kiwidrewover 15 years ago
Unfortunately, there's a reason why banks and other financial institutions tend to batch transactions together and settle them overnight: liquidity requirements.<p>Basically, the shorter the settlement period, the more cash the banks need to keep immediately accessible. The increased liquidity requirement carries with it the opportunity cost of keeping that cash available at-hand instead of in more productive investments. With end-of-day settlement, each bank only needs to transfer the _net_ amount (outgoing transfers minus incoming transfers), which is -- barring a really nasty run on one of the banks -- an order of magnitude smaller. So there's a tradeoff between settlement speed and transaction cost.<p>But this doesn't prevent the bank from immediately notifying the recipient of the funds that a transfer has been made. It's just that the funds aren't available for use until after settlement.<p>For some interesting details about the tradeoff between settlement delay and transaction costs, I found <a href="http://ideas.repec.org/p/bca/bocawp/06-20.html" rel="nofollow">http://ideas.repec.org/p/bca/bocawp/06-20.html</a> to be an interesting read.
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joshuover 15 years ago
I'm not sure what problem this solves.<p>Go look at the spec for FIX. This is what's necessary to specify modern financial transactions.<p>I'm not sure that naming endpoints is really that helpful to any particular problem. You've replaced a CUSIP with a URL, I guess.
xalover 15 years ago
Very clever. I hope this works out.
freetardover 15 years ago
Some nice demos of how it works:<p><a href="http://www.opentransact.org/usecases.html#simple" rel="nofollow">http://www.opentransact.org/usecases.html#simple</a>
sernover 15 years ago
Too simple. The banks will never adopt it.
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