> all of those costs are a factor of the originating individual transactions
Correct, to a degree. Hub-and-spoke systems (clearinghouse, with banks at the periphery) are cheaper and more efficient than an everything-connected topology. The clearinghouse can run cheap rails because it knows it has pushed those problems to the periphery. The main missing factor, however, is float.
Float makes RTGS more expensive than batched settlement. If you give me RTGS rails, I can batch on top of it and recycle the yield on float into savings, possibly rebates (or credit, e.g. how banks front credit against deposited cheques).
The batch mechanism will always be cheaper under real-world conditions. That's what I want to emphasize. This isn't an artefact. It's fundamentally inescapable.
Correct, to a degree. Hub-and-spoke systems (clearinghouse, with banks at the periphery) are cheaper and more efficient than an everything-connected topology. The clearinghouse can run cheap rails because it knows it has pushed those problems to the periphery. The main missing factor, however, is float.
Float makes RTGS more expensive than batched settlement. If you give me RTGS rails, I can batch on top of it and recycle the yield on float into savings, possibly rebates (or credit, e.g. how banks front credit against deposited cheques).
The batch mechanism will always be cheaper under real-world conditions. That's what I want to emphasize. This isn't an artefact. It's fundamentally inescapable.