Hacker News Reader

We have very different experiences of the global banking system, it seems. To me, US banks are archaic, slow, and backward—and the UK has to be in for close second so it isn't a fair comparison at all.

I have lived/banked in New Zealand, Canada and The Netherlands, all of which are delightfully eons ahead of the US banks almost across the board. For example:

- P2P or bill payments in Canada can be made to any email address and received within 60 minutes for free.

- Splitting a bill or requesting payment in Netherlands is trivial, because the banks all allow you to generate a URL and send it to anyone for instant payment.

- Transfers in NZ are realtime, instant, and validated before you send to ensure its the right person. You can also create accounts online with your government login. Touch to pay exists everywhere since at least 2010.

Meanwhile in the US, checks exist and people go crazy when Apple Pay is accepted at a single chain store. I've never touched a check, and I hope I never need to—and the examples of hoops to jump through are likely because you're new! KYC regulations tend to relax over time, and it can be painful at first almost everywhere. The fintech revolution in Europe between N26, Revolut and the dizzying array of others is evidence we don't need, or want, US banks to do anything. It won't help.

Indeed. I had bank accounts in 6 or 7 jurisdictions, and used mobile payments (mPesa, GoJek, etc.) in many more, and the US banks were by far the worst, most primitive, archaic, least convenient, most punitively expensive (in a mean-spirited way) of the bunch. It is no wonder that the (terrible, and expensive) PayPal originated in the US, because the extant alternatives were so primitive (sending checks by mail? seriously?) - other countries had simple, fast, cheap domestic payment systems for ever.

UK and related systems (Ireland, Hong Kong, Channel Islands) second worst.

European continent - what a pleasure by comparison. Everyone has their account number on their website or stationery, and if you want to transfer money, you transfer money.

Of course, I understand that US banking has been catching up to Europe and Africa and Asia. Enjoy.

EDIT to add: As many point out, that's obviously retail. Can't beat US banks in investment banking - Swiss banks and Deutsche and HSBC etc. have been trying.

In my experience UK banks are quite a bit better than German, though that's changing. UK has had almost instant payments for several years. In addition most of the German banks think 5 character passwords are sufficient.

Big difference is that US banks usually charge no fees. Not for a monthly account, not for a credit card, not for a debit card. Probably not even teller services.

And if you go to a US teller, they won’t direct you to an ATM.

From what I’ve seen in France, bank branches are increasingly cashless. Need $5k? Go to the teller and ask them to open a window on your account, and then make 5x transactions at the ATM (with its 1k limits).

My BoA account has fees, my Axa account doesn’t.

And don’t get me started on trying to use wires with BoA, they won’t not even tell me why they are rejected, but still keep the $30 fee.

I suppose you have your reasons (Global ATM alliance?), but if you’re paying monthly fees on your US chequing accounts, for most people it’s worth shopping around.

leaving the US next month anyways. When I went to shop around, I was told small local banks don't do international wires, I didn't try the other big ones.

My credit union (First Tech) does wires. It goes through another bank, but they allow me to initiate it from my account etc, so there's no practical difference.

I've seen UK banks (to be fair not just banks even wireless service providers) charge for a phone call to their customer service number! (the equivalent of a U.S. toll-free service).

It’s fairly common in Europe. At least it usually means it’s technically illegal for them to put you on hold.

For airlines, I know Europeans that will pull up Skype and call their airline’s US number if they have one.

> UK and related systems (Ireland, Hong Kong, Channel Islands) second worst.

How do you even come to this. My experience with UK banks is pretty much second to none. Instant transfers with upfront confirmation with amounts well over 10k. Easy ability to split bills with URL, ability to freeze cards (even outside Monzo, etc), easy instant exchange currencies including overseas (yes a transfer into the UK from another country is instant), icons around my expenses. Account numbers are short and IBAN compatible too. Best of all the typical current account is free.

I second that. Most Europeans who have been exposed to American banks find them years if not decades behind. But investment banks and consumer banks are two different beasts entirely.

> Transfers in NZ are realtime, instant, and validated before you send to ensure its the right person. You can also create accounts online with your government login. Touch to pay exists everywhere since at least 2010.

I know that this is an outright fiction, so I’m leaning towards doubting the rest of your post too. Transfers in NZ are only instant if you’re transferring to somebody in the same bank. I don’t know what identity validation you’re talking about, NZ banks just take an account number for transfers. I’ve never seen a bank use government login in place of AML. Touch pay is not widely adopted at all in NZ, most merchants hate it because of the extra fees, in recent time it’s become somewhat common at larger merchants. Literally everything you said about banking in NZ is either outright false or a major exaggeration.

Last I checked, inter-bank transfers in NZ were hourly now. They're instant with Osko payments in Australia though, which is nice, and they include identity validation too. Paywave/paypass is also almost universal in Australia too, when I went back to NZ a couple of weeks ago it was noticeable how many shops didn't accept contactless payment.

> Last I checked, inter-bank transfers in NZ were hourly now

Depends on the bank, I think most of the big ones do. Some still do overnight. But remember, that’s on each side of the transaction, so a transfer between banks that settle hourly can still take a few hours.

Any bank to any bank transfers in India are literally instant now, via UPI or Unified Payment Interface. A central office gets all incoming requests, & settles the txns. Users & Merchants get id like user@bank, merchants can send a collect request; users can send money, protected through 4-8 char long pin.

How’s that working in J and K?

As an Australian who travels to NZ reasonably regularly the lack of touch payments, and even credit card acceptance (vs NZ EFTPOS acceptance) is noticeable.

Australia has now launched real time payments though, so I hope NZ catches up before too long...

It seems that while banks themselves do fewer things around p2p payments (which seems to be the over-arching issue you have with American banks), other private companies are greatly improving on this. The banks also banded together and launched their own knock-off, zelle (no fees even across banks, and most banks work with it). Not perfect, but not as bad as others have made it sound. Venmo, the competitor which prompted banks to make zelle, is also alive and kicking. Importantly, it's not owned by the banks, so it's an external competitor which will help drive innovation. I believe that having a non-bank as a market leader will help push American banking ahead better than the NZ banks deciding to implement something out of benevolence. Certainly not as bad as having to get a physical machine to do online banking; my Lord but that's byzantine. I wonder if some one could emulate the hardware device.

The Federal Reserve is finally taking notice too. In addition to modernizing ACH over the past few years (so that payments can be settled on the same business day instead of over 3 business days) it has finally decided to create its own instant payments system called FedNow. Unfortunately that won't be ready until 2023 but Zelle and Venmo should fill the gaps until then.

With Zelle you are at big risk with misdirect funds, proving who got funds, almost no resolution if an issue comes up. I'd be careful with it until things settle down.

I agree, for small transactions. For large transactions (above $10k), US and UK banks are great. Fedwire can move any amount in an hour for $30, and it’s very safe. Try moving $50k through Revolut and they shut you down.

Even though small transactions are the huge majority, most of the money is in large transactions.

Have to agree re: Canada. Our banks are top notch technology wise and customer service. They are also conservative and don't gamble with our economy.

The banks are also spreading globally. I've been able to use different Canadian debit cards in quite a few Caribbean and Mexican cities. More branches are even in the US.

- P2P or bill payments in Canada can be made to any email address and received within 60 minutes for free.

- Splitting a bill or requesting payment in Netherlands is trivial, because the banks all allow you to generate a URL and send it to anyone for instant payment.

These are instant in the U.S., use the Zelle app.

Is a Zelle account required to receive a payment?

You just have to use a bank connected to Zelle and it’s done through the bank’s mobile app. There’s 400+ now apparently so it’s hard to be banked and not be connected somehow. The alphabetic list is on their site.

I don't deny that these other systems may be better than the US's, but you do a disservice to your own argument when you intentionally leave out parts of the US money transfer system that don't help your argument. We all know about debit cards, credit cards, venmo, zelle, the fed wire, &c. No need to pretend that the US is just a bunch of people handing paper checks over to one-another.

The US doesn't use IBAN. WTF, America. Sort it out.

I'm not familiar with venmo and zelle, but from what I've heard about them, debit cards in the US sound like they're not much better than credit cards.

Venmo and zelle are two apps that allow instant p2p payments. Venmo was first; zelle is the banking sector's answer (a whole bunch of them got together and agreed to support it). Both are widely compatible; zelle has no transfer fees. That sounds just about as good as anything else I've heard of in NZ, and it has the added advantage of having an external competitor (venmo) pushing the banks. In other words, not everything is under one roof, and I believe this will actually drive innovation in the long run.

I'm not familiar with zelle, but I know venmo (and competitors like Cash app) take a business day to transfer the money into your account. Or they can do it faster for a fee.

> debit cards in the US sound like they're not much better than credit cards

the are all better than paper checks

I don't doubt it, but in many countries, paper checks already died out a long time ago, and credit cards aren't really catching on for anything other than online purchases abroad, because we already have better solutions for most of the things they do.

As an American I write exactly 4 checks per year. Two for county taxes and two for town taxes. Both have a credit card option I can use, but it's through a third party that charges extra for it.

Why do European vendors have such a hard time accepting credit / debit cards and still insist on cash?

I know of instances where a credit card from Amsterdam, the Netherlands is not even accepted at a shop in the Swabia region of Germany.

I also know of instances where they outright refuse to accept Visa and only deal with Mastercard and such - that too issued in Germany!!. What's the point of a credit card if you cannot travel with it?

Why are cash transactions so much more prevalent in Europe? I've seen the same in Japan but that's entirely a different case.

[1] For Many Germans, Cash Is Still King

https://www.npr.org/2019/06/09/728323278/for-many-germans-ca...

History of recession might be a factor.

Personally, I like cash. Better for tips, pocket money and other things. I also like to not leave any transaction history, even if banks are mostly privacy aware.

If you are dependent on social security and the state has the power to look through your finances, you begin to see the advantages again. Because they would rob you of your last 20$.

Cashless paying is convenient and fast, but otherwise isn't really something many people strive for.

Heard about the finance crisis in Greece and how access to their bank accounts became restricted? Another hint.

I think that's more a Germany thing than a European thing. In Sweden cash has almost been completely eliminated from their economy to the point that some retail banks no longer deal in cash.

More fool them - wait until they have a major banking computer crash / cyber attack.

And then what? They have to close for a few hours? A few excited local reporters coming by?

Seeing a Bank run with lines of citizens queuing at banks does tend to concentrate politicians minds.

Why would there be an in-person bank run in a cashless society?

Credit card networks can vary regionally even under the same brand names (like MC/Visa). They are not ubiquitous. Depending on the network the merchant is using, they may or may not be able to connect to your specific card's issuer.

I'm from the US and I've had my chip based Visa pin debit card declined in France due to network incompatibility that neither side could figure out (at a McDonalds of all places) - the authorization just wasn't making it to the issuer.

Basically the further you get from you issuing bank's region/network, the more likely you are to run into problems, regardless of what country you're in. In the US because payment processing industry is so big, merchants are more likely to accept more networks than in other countries because they're paying more to support it or have negotiated better rates with middle men like FDC or directly with Visa/MC.

I think in Germany most MC is actually run using the Maestro network and merchants get hit with either per transaction fees or high interchange rates for using non-maestro cards (if they even opt-in for that with their acquirer).

Credit cards are expensive to accept and it's possible for charges to be reversed. I admit it's a bit odd to accept one type of credit card and not another, but there are plenty of places in Europe that don't accept credit cards at all. Most places do accept payment with a normal PIN bank card.

In my experience that's mainly in Germany. I've paid with my spanish debit card in many countries without any problem.

Might be related to the multiple currency crashes Germany has suffered and tax evasion

In my opinion the US is far behind with regards to retail banking. For example, in the US they are still arguing about real-time payments [1] while we had in years in most countries in Europe. We will probably have cross-country realtime payments with EMPSA [2] before the US has national realtime payments. With Fednow [3] having 2023-2024 as a target.

[1] https://www.politico.com/story/2019/07/19/big-banks-prepare-...

[2] https://www.paymentscardsandmobile.com/independent-mobile-pa...

[3] https://www.federalreserve.gov/newsevents/pressreleases/othe...

They are just arguing about the next-gen system that will achieve higher throughput. For consumers of US banks you can already do real-time payments with no fees with Zelle.

> I'm sure US banks in control is bad at a macroeconomic level, but for the average consumer and at a microeconomic level I think it could bring about a lot of positive changes. Then again my perspective is probably skewed as an American

It is also worth comparing the US banks to alternatives. The US is changing, but as a political entity the US still accepts that wealth and earning money are fundamentally good things and that private property is a thing. For example [0].

The US banks are trustworthy like snakes and scorpions, but at least they exist in a regulatory world that is pro-money. It is easy to see why US banks might end up being more effective than the competition. If they tap into a massive opportunity they are allowed to make obscene money. That is also a major driver why if someone wants to succeed, they want to succeed in the US. I bet that pervasive attitude comes through in the banking system too.

[0] https://en.wikipedia.org/wiki/List_of_countries_by_tax_reven...

> The US banks are trustworthy like snakes and scorpions, but at least they exist in a regulatory world that is pro-money

Erm, US banking regulations have become quite insistent on knowing customers' identifying information, requesting employment details, and reporting many cash transactions to the government. So the environment can't really be said to be pro-money, at least at the pleb level, as the concept of money implies fungibility.

The article is about investment banks. Not retail banks. US investment banks are ahead of the US ones but the retails banks in the US outrageously outdated.

> US investment banks are ahead of the US ones

Crikey I'm a typo machine. Hopefully it's obvious that I meant US investment banks are ahead of the EU ones

> which sucks because you have to get a physical card reader (like an actual machine that scans your debit card) in order to use the online banking most of the time

Isn't such a device required if you want 2FA and use your phone for e-banking?

Yes. This is a feature, not a bug.

With the US system, on the other hand, consumers have more protection precisely because the banking system is insecure. It's easy to get a fradulent charge reversed.

In the EU it's also possible to get a fraudulent charge reversed, but fraudulent charges are much rarer.

> I get convenience and speed with US banks that I get nowhere else -- i.e. the most online traditional bank in the UK is probably NatWest, which sucks because you have to get a physical card reader (like an actual machine that scans your debit card) in order to use the online banking most of the time.

I had a few UK accounts in the early 2010's, and it was awfully convenient for me that the physical card readers were interchangeable. I can bring around one card reader from any bank, and use it with the debit cards from every other bank.

In Singapore, every bank has their own physical 2FA keypad tokens, and they're not interchangeable. Some banks are slowly moving to mobile apps, but most business bank accounts here still rely on those physical tokens.

Here in Sweden we have BankID that is used by every bank and a multitude of other services as an authentication mechanism. It is an app on your phone, tied to your bank account and phone number where you use a passcode (or can enable FaceID on iOS) to basically sign any kind of transaction related to your tax agency number.

It is really how everywhere should be, I need to pay some bills? Add them to my online banking and when I want to send the orders I just need to send them, open the app and sign. Need to send my tax declaration? Login to the tax agency using the app and sign and validate before sending my form. Do I need to validate a payment done with my credit card that was caught and marked as possibly fraudulent (because my purchasing behaviour changed a little bit from the norm)? No worries, just open the app and validate that you are you.

And so on and so forth...

Good or bad? That's what op-ed is for.

That aside, we're talking about the cartel that crashed the WORLD economy just 10ish years ago. If that isn't cause for pause I'm not sure what is. There's more to life than convenience.

"In China I had to jump through so many hoops to get an account "

Yah. "hoops" like walking into a bank and walking out with an account and a card in 10 minutes!

"This is not a pain point for any immigrants I know in the US as it's fairly easy to move money around." Sure. Try to sending 10, 100, 1000 or 10.000 USD within the US and then try the same thing in the EU and compare: costs, speed and ease.

I've always heard it's incredibly difficult to get a bank account in China if you aren't a citizen, has this changed?

Yes. As far as I know now you can not just walk into a Chinese bank anymore with a tourist visa and just open one. Besides this, if you are not speaking the 90ies or something, I doubt there is a country where it is easier.

I've heard it's difficult even for people who are married to a citizen and have been living/working in China for years. It isn't like that in the US.

Not sure what your definition of "traditional" is, but I don't recognise your description of UK banks at all. I joined Smile bank (Co-op) in 2001/2, and it was even then fully online and I never needed a bank card to manage my account. I've had accounts with several others since (inc. Barclays, Santander) and never needed a card with them either. The new generation like Starling, Monzo, Revolut et al are also incredibly convenient.