Here (Iceland) it's free to transfer money between individuals via your bank. You simply give them your ID number and bank account and it's done instantly. US Banks are leagues more advanced than the ones here, and the only reason services like this exist is so that banks can directly or indirectly make money from them. People in the US need to demand better from their banking institutions.
The US government has always had the opportunity to come out with a digital equivalent to cash, that they policed rather than selectively hold private entities liable.
Supposedly, this is coming out soon called FedNow.
https://www.federalreserve.gov/paymentsystems/fednow_about.h...
Electronic money transfer should be a government utility, subject to courts rather than private business’ whims. Although, the US government does like sitting on the sideline and maintaining plausible deniability.
In Australia, a regular person with knowledge of my bank code (BSB) and my account ID isn't able to withdraw money from my account, but they can send me money. It's very low risk.
For the last few years I've been able to associate a phone number or email address to my bank using PayID[1] which eliminates even that.
The BSB + Account ID can be used to set up direct debits, it's intended for ongoing/regular payments like utilities/rent/etc. Because it requires a fair bit of paperwork/infrastructure to get registered in that system, I don't think anyone would be able to get away with scamming using it for long.
> If your bank or credit union does not yet offer Zelle®, your weekly send limit is $500. Please note that you cannot request to increase or decrease your send limit.
https://www.zellepay.com/faq/there-limit-how-much-money-i-ca...
In addition, if your financial institution is not partnered with Zelle, you can't send money to anyone whose financial institution is also not partnered with Zelle:
> If your bank or credit union does NOT offer Zelle®- The person you want to send money to, or receive money from, must have access to Zelle® through their bank or credit union.
After a few phone calls with their customer service department, it was evident that it was not going to work out. ALSO, they had no way to 'refund' that person the sizable amount of money beyond waiting the 2 weeks or so it takes for that money to be 'unclaimed', and thus reverting to the originating account.
So, for 2 weeks, thousands of dollars were 'stuck' in no mans land.
It all resolved out, when the timeframes were hit, and transactions reversed, but it still boggles my mind that they do not have a method beyond this when such cases arise.
Latency is getting better and I think 2022 is the year a big change to the ACH system is getting rolled out that should decrease that wait time to less than 24 hours for most transactions.
But you'll still have all of these companies vying for the in-between so they can make money investing transitional funds. Now you see services like Cash.app moving to a more bank-like structure with a debit card and Apple Pay, so they can keep that money in their system and they can continue to do stuff with it.
I agree with your broad point though. This should be easier in the US.
My bank has no effective method for me to initiate a transfer to another account in any rapid fashion that is not my own account. Even to send to an account at the same bank both parties must be on the phone with the bank at the same time. I get more value out of using Cashapp as a bank by setting up my direct deposit to go to Cashapp. Most banks I use just outright suck, and I am tired of how much they tie any activity to my own physical existence. It has only ever been a barrier to my own productivity.
It's pretty easy to hop to a different institution for checking/savings if the current one isn't working out for you.
The problem is that (1) most consumers don't know this is a thing, and (2) as you said, the UX of sending money through Venmo is generally far better than having to log in to your institution's mobile banking app, get past MFA, and then find the option to send money to someone. Zelle also lacks the concept of requesting money (I think), and that feature is a big QOL advantage in my experience.
By owning both ends of the transaction, the UX of Venmo is so much better it isn't even funny. I will never use Zelle again if I can help it. Zelle's limitations (set by each bank) are as bad as Venmo's (eg can only send $2,000/month to a recipient), at which point I might as well just keep using Venmo.
Yes Zelle is so bad when it messes up. I hate it so much.
Hopefully, FedNow Instant Payments will force banks to provide better service and remove the need for workarounds like Venmo.
I think most countries have solved this problem by now - i.e instant transfer through apps. Seems like every country has their own service. Would be nice to get some larger unified version - that'd be cool.
There's SEPA and SEPA Instant for the eurozone, and they are awesome ( free, fast, reliable, only an IBAN required).
You can also just send the money to their bank account if you really wanted to, but nobody actually likes doing that when you can use the protections (however imperfect) these services provide.
I agree with the minimums and send time. It’s ridiculous that a transfer I make every week to my wife takes 30 mins to complete. Slower than Bitcoin.
Interac E-Transfer minimums are 0.01$. Money is going straight into my checking accounts.
Yes, but what’s the average Icelander’s monthly bank account fee?
In the US, it’s a bit fat zero.
It seems you get what you pay for.
Was hard to find any info. The Only Iceland bank I did find after searching “monthly bank account fees in Iceland” had a link to a PDF of their fees in Icelandic only (my phone won’t translate pdfs), and that was linked from their English page for newcomers.
Another fun fact: pretty much everyone here pays off their credit card every month.
The bank will close your account if you do not.
Of course there are exceptions, but this is the general rule.
(if you need money the bank will lend it to you and help you arrange payments)
https://files.consumerfinance.gov/f/201407_cfpb_report_data-... (PDF, page 9)
While there are fee-free checking accounts in the U.S., many of the largest banks only offer paid checking accounts that qualify for a monthly fee waiver if certain requirements (such as an average/minimum daily balance, an amount of monthly direct deposits, and/or a number of monthly debit card transactions) are met. However, U.S. credit unions tend to have more consumer-friendly offerings.