> persuade more people to abandon checks
What's the problem with US payment system? People still use checks?
I have seen those only in movies. I think they were out in the 80s in Finland.
What's the problem with US payment system? People still use checks?
I have seen those only in movies. I think they were out in the 80s in Finland.
>For banks, the $91.2 billion in fees they earn on credit-card portfolios is now more than the interest they charge on the loans.
The fees are ridiculous. Profit margins at restaurants are often 3-5% (per Google). There is still a cost to handling cash, but if cash cost ~1% all-in, their profits would go up 20-30%, just like that, assuming consumption stayed the same.
Fast food venues didn't accept credit cards for a long time, but eventually found people spent more paying with a card than cash. A $300 TV and a $5 hamburger "feel" exactly the same with cards, which certainly doesn't help consumerism in the US.
As an example, when I pay my property taxes, I can either pay by sending a check in the mail, doing an electronic check (ACH transfer that takes 2-3 business days to clear) and paying $0.25, or pay a 2% transaction fee. Stamps are $0.50, eventually I'll need to reorder checks (at a cost), so I do the ACH transfer.
I just paid some property taxes with one instead of ACH; keeps all of my accounting in one place in the card, and the payment is immediate instead of waiting for the ACH payment to wind its way through the antiquated Fed plumbing. Anyone who won’t take a CC, I’ll use Plastiq; they cut a check, I pay the CC fee, but it’s still rebated back.
Obviously, Visa and Mastercard are trying to see if they can ruin the system.
They are negotiating with very few entities: just 2 (Visa and MasterCard) account for most card holders. Throw in Amex, and Discover if you want and you've covered nearly 100%.
Merchants don't have a lot of negotiating power, so they are really not in a position to dictate prices. Visa and MasterCard are in a position to dictate prices.
They regularly do crossovers and promotions to encourage people to use the cheaper ones.
In Canada, we have "bill pay" for utility, property tax, credit card, etc. but all that happens is your bank transfers money to the biller's account. The biller pays a bit for this service but evidently much less than the cost of handling physical checks as I've never seen a surcharge for it. Even the small town of 3,000 I live in is set up to receive property tax and water payments through this system.
Regardless of who makes your bill pay service or exactly how it works, my main advice if you use any bill pay service is to ready the fine print very closely and be sure you understand what you have to do to be covered (late fee reimbursement, etc) if a payment does get screwed up.
They sorted through the fees and got things turned back on by explaining the situation, but it was a nightmare. Precarity is hard to understand if you've never been in or near it, or if it's a distant memory for you. It's overwhelming on a good day.
The way it works fore me here in the EU is that bills land in my bank account and I log in on mobile, select the ones I want to confirm, and sign the transfer.
We also have bank to bank instant transfers for free (useful for paying back 1/2 pizza etc) without external private middlemen. US banking feels so legacy, much more so than the COBOL I work on.
I guess it's because of the bank you chose, since the one my relatives use don't have any of that, and are those apps bank-specific? Do people not having your bank also receive the money instantly?
The timing of payments can be a real burden when you're on the edge. I wrote about a time something similar happened to me a few years back https://news.ycombinator.com/item?id=6424493 This is about overdraft fees, specifically, but it's the same principle.
Why electronic payment costs money in the US? That's the cheapest way to pay and process payments. In Finland that cost's nothing and it's the default for paying large bills and payments.
EDIT: "for credit cards"
https://brussels-express.eu/bank-transfers-will-immediate-fr...
I know that sounds stupid but it's the truth. There is no law against banks charging fees like this, banks like to make money (don't we all!), and (significantly) banks don't seem to lose customers by charging these fees.
It is a cultural thing to an extent though; there are EU countries where they’re still used to some extent despite the presence of a modern banking system.
Car could be SEPA (or equiv in non-Eurozone countries), bank draft, or even cash, though cheque is possibly less likely due to fraud concerns. Some people do it by actually physically going to a bank with the seller, I think (I don’t drive, so have never done his myself).
For in person stuff, where you live plays a role too; only a minority of countries currently have SEPA Instant, though that should change soon. For everyone else, it’s a day or so delay from when you send the payment in the bank app.
As for the $1000 TV, I would probably pay that at an electronic payment terminal with a debit card. If buying from a retailer, that's usually the way to go, no matter how small.
Buying a used car form an individual might happen in cash. Some countries will not allow cash transactions over 3000€. So depending on the price, it might also happen with a SEPA transfer.
I currently pay my rent via wire transfer, which is I guess better than a check because it's electronic but is also worse because there's a fee. When I first moved away from home for a job I had to pay rent with cashier's checks (which meant going to the bank and paying a fee first to get the check).
While Virginia Natural Gas is large enough, they handle their credit card payments via Western Union and the customer pays a fee to do it. It's the only check I write every month.
Like buying a house or a car?