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Comment by cperciva | Hacker News Reader

I use paper checks a lot these days. It costs me about $1 to clear a check, and $25 to send a wire transfer.

I'd much prefer to do everything electronically, but I'm not going to pay an extra $24 to do it...

Wow, from a German perspective that sounds absurd. Bank transfers in the Euro zone are free (SEPA). Within Germany they've been free as long as I can remember. I've never written a cheque in my life.

In France, both are free, and we use cheques a lot... For example, a lot of doctors don't want to deal with cash and don't accept credit card.

With my bank it is free to have my bank mail a paper cheque to any name and address in the US, but costs $25 to do a domestic wire transfer.

Coming from Australia this sound prehistoric. Nobody really uses cheques, all wire transfer.

Even in the UK they're finally being aggressively phased out. When I moved here in 2000 was the first time I'd had a cheque book - in Norway where I'm from, I believe my parents last used cheques in the 80's.

Like Germany, Norway have/had giros in widespread use, though. The UK technically had a giro system, but actual giros are rarely used here. The big difference between a giro and a cheque is that with a giro it is the payer rather than the payee that instigates the transaction - either directly to the recipients bank account, or by effectively registering an approval with the bank and sending something similar to a cheque to the recipient (but with the difference that the sender has first directly confirmed the transaction to the bank).

So to me cheques have always seemed backwards from the logical flow.

Giros were very common in the UK, you probably have the forms if you have paper bills for anything.

But people mostly moved to direct debit for those kinds of bills.

"Giro" is Scottish slang for unemployment benefits - majority of the population likely won't have thought it's used for anything else

>I use paper checks a lot these days. It costs me about $1 to clear a check, and $25 to send a wire transfer.

Is ACH not an option?

Not within Canada, and it's nontrivial (both in terms of paperwork and cost) for moving money from the USA to Canada.

I inquired at my bank about electronic funds transfer (think ACH, but in Canada) and it would have cost around $100/month to sign up for that.

Ya, I sometimes feel like Canada is the only developed country with a more insane banking system than the US. But in reality I think we're both about equally insane, in different ways.

Canada is about 15 years behind the US in terms of banking. (But about 3 years ahead in terms of credit cards, interestingly enough.)

We avoided the mortgage securitization nightmare literally because Canadian banks hadn't gotten around to it yet. If the market crash had taken a year longer before happening, Canadian banks would have been along for the ride.

I'm counting credit cards as part of "banking". Financial services would maybe be a better name.

As far as insanity, I mean more little things. I can't speak for most US banks, as I only have accounts at BMO Harris. But for one thing, the statements I get from them are nuts. They list deposits, and withdrawals - the amounts, but not the dates, and not the resulting balance. And then separately they list a record of the balance throughout the month - not the amounts of the changes, but the new balance after each change, along with the date.

So in order to determine wtf actually happened, you have to compare the (potentially long!) list of undated transactions with the changes in balance throughout the month (which you have to calculate yourself) to find out what happened when. I mean... it's seriously like it's intentionally as convoluted as possible.

My statements from BMO Canada on the other hand show a sane account listing with transactions, dates, amounts, and resulting balance.

On the other hand, BMO Harris will mail a physical check (not a cheque! :P ) to anyone in the US for me, for free. Coming from Canadian banking, I was shocked that such a service existed, let alone on regular accounts with no usage fee. It's hilarious that you can do that but you can't send electronic transfers, but it's still extremely convenient, especially when doing business remotely from Canada!

Huh, I didn't know that BMO Harris would mail checks. It could have been useful to me... is that the 'business bill pay' feature I've never figured out on their website?

I agree that the printed statements are weird. I'm guessing this is an American thing? I don't have experience with any other US banks to compare against.

Business bill pay, yes. If you make a payment to an entity that is set up to accept electronic payments they'll do that, but otherwise they'll cut a check.

I'm actually really curious whether other American banks have equally terrible statements, or if it's just them. Anyone?

Although Canadian banks, at least 2 years ago, were unable to issue a VISA debit card linked to my business account. They wanted me to get credit, and appeared to be totally confused as to what a VISA debit card was. When I asked how I could go about registering, say, domain names, or purchasing stuff overseas, they said "Interac". It's almost adorable.

I really don't blame them for being confused about VISA debit cards. They hardly exist in Canada; they were originally a scheme to allow credit card transaction processing fees on debit transactions, and Canada quite reasonably didn't buy in.

The problem is really that Canada's interac system -- which was very advanced for its time -- never reached outside of the country or online, and market share means that you really want your payments to go through the major international card networks. But that's a matter of getting unlucky in backing the wrong horse more than anything else.

In many other countries with domestic card schemes, EMV cards are often co-branded with other domestic schemes to allow the same card to be used internationally. Domestically, low fees are maintained, but internationally the card would still function. This was more or less forbidden in Canada (see item 6):

http://www.fcac-acfc.gc.ca/Eng/forIndustry/publications/laws...

According to some of my colleagues, these regulations were explicitly made to protect Interac against Visa debit and Maestro which were characterized as domestic schemes from the Visa and MasterCard network.

Because there are no co-branded cards, it also means that Maestro is not really accepted at many POS devices in Canada.

Checks are generally more widely accepted than ACH. Joe Nobody generally isn't able to setup ACH directly.

In the US, for normal personal accounts,

- Only some banks have the ability to initiate an arbitrary ACH transfer online (transfer between accounts that you own at other banks is a little bit more common).

- Even fewer of those banks make this feature free.

- Sometimes it is very well hidden inside the "Online Bill-Pay" feature (which wants you to search for an institutional payee by name), and no indication is given that you might use it to pay someone who is not a large corporate biller.

- Credit card companies and utilities usually provide a feature to give them your account number so that they do ACH withdrawals from their side automatically. They like it because you can't forget to pay. You should be wary of it because money just disappears from your account with no action taken on your part, and that's scary. A push-based option is much rarer - they will never just give you an account/routing number to push money to.

- There is never under any circumstances any kind of fee to write or deposit a check (provided it doesn't bounce).

- Usually your first couple of checkbooks are free (or pennies per check). If your banking relationship is large enough, then depending on your bank subsequent checkbook orders may be free as well.

- Far and away the easiest, least risky, most comfortable way to pay someone you are sitting next to is for you to write a check, and for them to take a picture of it with their mobile banking app.

Yes, it's idiotic.

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