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Comment by ggm | Hacker News Reader

... in america.

It has always confused me how simultaneously the US money system is operating in the most advanced interconnected economy imaginable which fosters innovation (bankruptcy laws in the US are designed to make it easy to try again, they encourage entrepreneurship) and yet.. the whole credit union, banking crash, over inflated economy has made them retain unbelievably archaic approaches to money on paper.

Checking for forgery, active forgery presumably underway, 3+ day clearing, "you're not from round here" risks, It's just insane.

Go to walmart, buy a stored value card, you can do dollar events with zero friction but present a cheque at the counter, and you're in the slow path.

It's positively ... Indian. It's like mainstream Indian bureaucracy levels of insane slowness. It's even had films with Whoopi Goldberg made about it (she is a cheque processor in some movie, doing it by hand at a 1970s vintage cheque processing machine. I think its "made in america" with Ted Danson)

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A thing I try to keep as a through line in discussing legacy infrastructure, and checks in the U.S. are definitely legacy infrastructure, is both a) how we ended up here despite later-generation systems getting to leapfrog off what earlier-ones learned and b) why people still use wlog checks instead of going with other methods that they could also choose to use, in 2024.

For example, in this issue, a major reason why some people don't do value transfer through banks directly is the banks don't really like them (for reasons), the feeling is mutual (for reasons), and other people who do not have the same POV re: banks want to give those people money in a scaled fashion, which (unless they orient their operations around a solution) will frequently involve sending out checks.

"for reasons" is doing all the heavy lifting here. I think the whole point of this series is to lift the tablecloth a bit and look at the dust bunnies underneath.

He does that. He's simply eliding the explanation in his comment here, because he explained both of those things in the article. The "reasons" he elided are:

* Banks don't want to do business with these particular people because they know them to be a bad business risk. They often know, via credit reporting methods, that the specific individual human standing before them has a history of cashing bad checks/committing fraud/whatever it is. Therefore, they decline to work with that person.

* The people who are bad risks for banks get rather tired of dealing with banks, both because constant rejection is tiresome and because bank employees make it very clear (though unspoken explicitly) that they are persona non grata there. By contrast, the people at the check cashing shop treat them better, so they would rather take their financial business there.

I get why you want the explanations and not just "for reasons", but both of these points are quite clearly spelled out in the article. So I don't really think the author deserves the grief you're giving him in this case.

>They often know, via credit reporting methods, that the specific individual human standing before them has a history of cashing bad checks/committing fraud/whatever it is.

This wouldn't even be an issue if America didn't still rely on the utterly archaic check scheme for transferring money.

> This wouldn't even be an issue if America didn't still rely on the utterly archaic check scheme for transferring money.

It still will be for as long as many people cannot get and maintain a free bank account that is usable for transferring funds via whatever scheme you envision replacing checks. And the property that checks have, namely that some percentage of them get unwound for various reasons and that percentage varies substantially by customer, is very hard to get rid of. As long as that property exists, access to a bank account that provides that mechanism will be an extension of credit and thus not universally available.

It's possible that a system for instant payment clearance, like FedNow, might reduce the problem of insufficient funds and similar clearance issues. However, that doesn't eliminate the possibility of bad/fraudulent/etc checks, just reduce it.

>whatever scheme you envision replacing checks.

You're acting like this is some kind of futuristic concept. Are you not aware that everyone in every other country manages just fine without checks? They're only used in the US. If I went to my bank now and asked them about "cashing a check", they'd probably look at me like I had two heads. They simply don't exist.

> You're acting like this is some kind of futuristic concept.

No, I'm not. I'm well aware of how other countries operate, as well as proposals for upcoming systems in the US.

I'm observing that the article we're currently discussing talks about multiple sources of issues with checks, and immediate-clearing electronic systems solve some but not all of them.

Immediate clearing systems eliminate NSF issues: a check will never bounce, it'll get cleared immediately or rejected immediately. This is a great thing and I'm looking forward to it. It'll be a massive reduction in fees and hassle for many people.

Immediate clearing systems do not eliminate the problem of the purported originator of the check disputing/rejecting/etc the check payment and the originating bank clawing back the payment. There are any number of reasons for that, some of them legitimate. The article mentions some of them, and there are more.

I am not making an argument against immediate clearing systems; on the contrary, I think they're an incredible good idea. I'm observing that they are not, in fact, a panacea that on its own will completely eliminate the reasons why people are unbanked or underbanked.

Oh, your bank knows about cashing American cheques (or British or I think French ones, though they're much less common). It's on their table of fees, and costs €20.

I would never accept to be paid by an American cheque because it will take months to get the money.

Oh, why? Because they actually wait for it to clear. Zero fraud then.

In the US you seem to like living with options for fraud.

Less fraud, not zero fraud.

Even if your bank sends the cheque for collection and waits for the payor bank to confirm there’s funds there.

The cheque could have been stolen and forged, or a legitimate cheque could have been altered. There’s even an example up-thread of a bank recycling account numbers. The owner of the bank account it’s drawn against can take weeks or months to notice that the fraud has happened, and when they do the transaction can be unwound leaving your bank liable to return the value of the cheque.

When I used to deposit US cheques regularly in the UK, I’d be offered the choice between “negotiation” (we assume the cheque is good and will pay it this week) and “collection” (we’ll send the cheque back to the US and only pay you when we collect the money weeks later), but in both cases there was language on the form making it clear that they could pull the money back up to years later if something went wrong.

There’s literally no way of implementing cheques—-or most other payment rails—-without someone, somewhere choosing to extend credit and deciding to take on that risk.

Maybe. I've never taken one and only one client ever asked me if i can take one.

Tbh I think you can still pay by (local) cheque even here but you need to go to the bank and sign something in blood to get them. And not sure if anyone actually takes them any more.

They may have been used for B2B with 30-60-90 day payment terms 15-20 years ago.

Just in case you didn't notice: patio11, author of the comment you're replying to, is also the author behind BitsAboutMoney, the source of this article/series.

Thank you I did not realise. But, noting that I don't think it alters the intent of my comment much. For reasons

Heh, I didn’t notice it was him but when scanning through the comment noticed the “(for reasons)” and was wondering if that was some subcultural or regional dialect that so perfectly mimicked patio11.

But the dust bunnies are with cheques. There is no bounce risk with a bank transfer. There is no identity risk. The money goes or it doesn’t. There is fraud risk, money laundering and terrorism etc. “risk” (airquotes because, HSBC) But most of the shit it is gone with a bank transfer.

The problem is poor people would need to pay for their bank (as banks need to make money other ways and from the middle class that will be credit cards and mortgages etc.)

The banks didn’t do themselves any favors with Zelle either. All they had to do was make a nice copy of paypal/venmo/cashapp/etc but they inexplicably did not, and now we have the meme that Zelle is mostly fraud. In my experience the implementations are horrific and don’t integrate with anything else my bank is doing so I do t feel comfortable pushing people to use it rather than paypal or venmo.

As a payment method approaches irreversibility it attracts more and more fraud.

The main thing Zelle gives us normal plebs is the ability to pay via routing numbers to businesses without incurring fees.

Possible before, easy now.

> why people still use wlog [?] checks instead of going with other methods that they could also choose to use, in 2024.

Anecdotally, I wrote a check to my landlord yesterday, because a few months back they claimed they never got the automatic bill-pay from my bank, and my bank said it was already sent, and weeks later my bank said the recipient refused to take it... Anyway, no party was ever able to tell me why an automated process that worked unattended for months suddenly stopped working for no discernible reason.

“Gremlins.”

All financial infrastructure is a patched-together collection of systems spread across multiple different firms made of multiple suborgs with vastly different levels of observability into and understanding of their local part of the total system. For many routine problems, the cost of having a rigorous answer to “What just happened?” is far, far greater than the dollar amount at stake in the transaction. You’d need the equivalent of a federal agency doing an after-accident investigation to make headway, at the cost of millions.

So we chalk it up to gremlins and move on, for better or worse. (This is one reason why financial institutions have an operational losses budget. Sometimes the gremlins eat someone’s money. So you just charge it to Ops Losses and move on.)

I write checks to my handyman, because he takes either check or Venmo. And Venmo refuses to validate my bank account. I never see the test deposit show up, and on the Venmo side it just says "try again later". So, checks it is. Say what you will about writing checks, but they are reliable in a way that digital payments aren't.

WLOG means "without loss of generality". Originally from mathematics; a proof by division into cases may say something like "assume, without loss of generality, that X is even ..."; WLOG flags a statement that applies just as well to other cases with obvious analogous changes. As generalized to non-mathematical writing, WLOG means "I could make an obvious analogous statement here about similar things for similar reasons".

Bill pay adds several middlemen. Before there was each party’s bank and the postal service. Now there’s the bank’s bill pay department which is sometimes contracted out. The actual printing and mailing of the check is usually contracted out. The bill pay service sometimes tries to be smart about binding an address to a name and sometimes autocorrects to the wrong address. Finally checks always have human error on the part of the two meat bags that are the payer and payee (threw out envelope or let it fall off their table and under a couch).

Bill Pay systems just mail checks?

That's the last-ditch method for making sure they can pay anyone. My bank lets me pay anyone via online bill pay, some of whom have registered with the bank in a manner that allows fast transfers, and some of whom get mailed a check that may take up to 5 days to arrive.

That's usually the fallback method in case they can't find some way to do an electronic transfer.

For a lot of people, the occasional check works pretty well. My housekeeper comes next week. I'll leave a check for her. I'll stick the occasional check in an envelope, but mostly I just fill in some bill pay numbers with my bank and it's transparent to me if it's ACH or a check is mailed. It's just not a problem for me or for the people receiving.

Of course, I don't try to pay by check in a store. (Though I did write about a $30K check when I bought my last car and that wasn't a problem either--assume they have back-end systems to verify.) Getting rid of checks just isn't a problem I care about or want to devote any mental bandwidth to.

They don’t even really verify that much (they were willing to hand over the car on a post-dated check) because they know where you are and where the car will be.

I presume they do some basic checks, but it’s really all down to trusting it’ll all come out eventually.

They’d much rather have a check than 30k in hundreds.

You used to have to run to the bank and get a cashier's check. I assume there are other verifications these days.

Meanwhile, I can pay the ice cream vendor in Copacabana Beach using pix and the transaction is confirmed on their device before I even lift my finger from the screen.

Why do you think we don't have instant money transfer available in the US, just because in a pinch we can still write a check? These days a check is just a paper form of digital payment anyway, my bank never touches the actual checks that I receive.

I'm fine with using whatever electronic transaction mechanism but a fair number of service people are not set up that way and I'm fine with just handing them a check.

So? This is also possible in the US, I don't see the connection between the 2 examples.

Is it really? How fast does it settle? Does it require an extra app and extra account? Is it guaranteed to be supported by any bank? Does it charge fees? Is it widely used and trusted by people?

Seriously, I don't think people in this thread appreciate just how practical and efficient pix is. Adoption is essentially universal across the population, and we are talking about a poor country.

Yes? You can make transfers without an extra app or extra account that settle relatively "instantly" whether or not the banks have actually reconciled (as TFA alludes it's basically always some sort of credit). And this is true of many countries in the world, too! And many of those countries still use and support checks.

There are a variety of systems in many countries, the key difference with Pix is that it is very modern and relatively mobile-first. There are not many other such systems in the world yet. How easy is it to pay without a phone? Or without internet? I regularly make payments in places where there is nearly zero cell signal.

Pix charges fees, too, to merchants.

Is Pix guaranteed to be supported by every bank? The mandate certainly doesn't seem to require it, but I'll take your word.

I think the reason that people in this thread don't appear to "appreciate just how practical and efficient pix is" is simply because it's not very relevant. Sending and receiving money isn't particularly annoying in the US. Nor is accepting payments (merchant fees aside -- that's a whole different topic that I am sure patio11 has explored). I am sure that if Pix or something like it was widely available in the US, folks would be singing its praise too. But it's not particularly compelling when most people aren't even aware that something is or could be lacking in the current system.

What app do you recommend? The most common one is Venmo, but people don't realize it doesn't settle for a number of days after the transaction.

So you just said you like writing cheques to make other people wear the 3 day clearing delay and paperwork hassle and you don't use them yourself when you are a consumer.

You don't care because you're an issuer, and a net beneficiary of retention of the funds in your control for those extra days of clearing.

Even as a receiver of checks, I don't care. It's easier to deposit than cash or PayPal. Zelle is nicer, but if I can't wait three days for the money, I already messed up in my financial management.

As the article describes, it may be convenient for you, but for many people it's inconvenient and costly to cash a check.

Also, saying that those people messed up in their financial management is sort of blaming their poverty on them, while we can't know (in general) whether that's their fault or not.

If I'm paying them in person and a check is a problem I expect them to tell me and I'll pay them in cash is that's reasonable such as for already-completed work. But I'm not mailing cash or diddling around with other random payment mechanisms.

Nobody is asking you, specifically, to do anything. But your original point was that checks aren't a problem for you. My point is just that as the article describes, for those without a bank account it does pose problems, and so assuming you do have a bank account, "worksforme" is not a very substantive comment, since the article also already acknowledges that.

So paying in cash seems the most straightforward mechanism in that case. Which is fine in-person if checks don't work for some reason.

Sure, I use them myself as a consumer. Not frequently but I get refund checks etc. for various reasons. They take a minute to deposit with my banking app. Would I want to go back to doing bills every week with checks and mailing them? Of course not. But dealing with one now and then just isn't a problem.And for the generally small amounts involved, a few days of clearing generally just doesn't matter.

> make other people wear the 3 day clearing delay

This is only applicable to the unbanked, for the most part. Regular banks make funds immediately available when a check is deposited. Unless you're already on their radar for kiting.

In situations like this, where it's me and a small business, I very explicitly ask how the recipient would like to be paid.

I've never been told cash, but if I was, I would be happy to pay in cash.

I have rarely had individuals who want to get paid in cash (off the books). But although some businesses like my furnace company are slowly switching over to having portable terminals, in my experience, checks are still the default around where I live in the US for service people and the like. (And, as I wrote elsewhere, even things like local tax payments can have outsourced third-party websites which charge a fee so it can be materially cheaper to pay by check.)

> It's positively ... Indian. It's like mainstream Indian bureaucracy levels of insane slowness.

Ironically India has a very significant amount of transactions cashless/electronic, pushed by demonetization and later covid. The government has been pushing hard for it for a while and I think they succeeded.

Yes. My comparison was to the wider indian paperwork processes, not money, where India is stellar.

Uruguay is another economy which has gone all-in on cashless, shops and cafes had to offer 10% discount for card transactions when I was there 8 years ago, the idea was to beat out the tax-avoidance.

> It has always confused me

When this feeling occurs, why is the next step "wow the US sucks" instead of "there must be some good reason that I don't understand."

It can be all of the above! Usually, however, it’s that we started a system earlier, or it has survived longer, for any number of various reasons, and has never needed to be fully replaced.

Same way that a country that never had anything before now won’t run copper telephone wires, and instead go directly to fiber backboned wireless.

So what do you think is the positive reason for US exceptionalism here?

As opposed to European exceptionalism that assumes that whatever is done in Europe is not only standard but also better?

I what way shape or form can settling money over several days be better than instant transfers with direct auth?

You can do that too! It's just that you can also use checks. I don't see the problem, instant money transfers are ubiquitous and were easy for me even as a visitor in the US. The fact that bank transferts take longer doesn't really matter day to day, they just don't use them for that

Just to be clear, I live in Australia and we also have 3 day cheque clearing but the banks and government are closing out on cheque processes and almost everything now is payid which is instant settlement. From what little I read it's more reliable than venmo.

the experience of being in other countries

Because the reasons that are there aren't good; most of the other countries had a similar situation but switched decades ago.

> insane slowness

slowness is a feature, not a bug, in some social situations. Most modern Americans have not experienced that kind of situation. One of the elements missing here is control - who has control over the transaction, and what are the practical methods to resolve dispute.

Cash is not great at scale perhaps, but it is great for the individual in times when trust is gone, where there is unequal power relationship, and where there is real corruption inserted into ordinary transactions.

As an American with some knowledge of history, I support cash, paper checks, and electronic transfer. without a doubt.

A thing about cash, though, is that another problem with precisely those occasions when "trust is gone, where there is unequal power relationship" is that cash can be forcibly taken away from you.

At every scale from muggings to home robbery to retail store robberies up to bank robbery and knocking over armored cars, cash handling imposes a security and risk management burden, with a particular component of risk of physical violence that is much less of a factor in electronic security risk models..

of course this is true - physical security is already something I take responsibility for.. it seems strange that this is really an issue in a civilized place. Is this more like a feeling of fear?

I may be missing your point but it seems to me that cash and paper checks are at opposite ends of the spectrum wrt who has most control over the outcome in case of disputes: with cash, the payer has to go to court to get their money back; with checks, the payer can just refuse to pay and the payee would have to go to court to get their money.

Or perhaps you're saying which one to use depends on what you want? But if there's an unequal power relationship, the person with more power (probably the payer) will usually choose. So to fix that, it's not enough for cash to be an option, checks need to not be an option. (Electronic transfers can be an option, as long as they're set up so that the payer can't unilaterally take the money back.)

this is a very old topic and also a very current, present day one.. Solutions exist that may not seem obvious in the modern context, because the world you and I live in, is so different than the past.

In my own experience I have negotiated sales or contracts with others for non-trivial sums. It feels like most modern people are just going along with systems that require an intermediary and working devices. I feel it is not only important, but crucial, to have the ability to negotiate directly with a peer or others. That means without electricity or cell phone coverage, too. YMMV

Oh, right, I agree. I guess my further point is that I'd prefer that after you close the sale and finish the transaction, you're sure you have the money. Cash and some electronic transfers give you that, while checks don't.

a semi-informed guess is that paper checks are uniquely useful for entering some kinds of contracts between ordinary people or small business. A check here has only five or so parts, but by controlling those well, checks can and are used in somewhat unexpected ways, and they can be formed to fit various ordinary contract clauses, too.

one surprising use of a check is that one could write five checks, each with an amount and further away date.. e.g. dated the first of the month for the next four months. Those checks are now a reliable source for a loan in cash, since you signed each one. there are many other examples..

There is no law that states postdated check can only be cashed after the specified date. Some banks will happily cash your check immediately and simply ignore the future date on the check. There is no guarantee that you can always cache a check either. A check can be cancelled by the issuer at any time by making so called 'stop payment order'.

> There is no law that states postdated check can only be cashed after the specified date.

that is absolutely false IANAL

https://www.helpwithmybank.gov/help-topics/bank-accounts/che....

> Please note: The terms "bank" and "banks" used in these answers generally refer to national banks, federal savings associations, and federal branches or agencies of foreign banking organizations that are regulated by the Office of the Comptroller of the Currency (OCC).

they say a Federal Bank can do that. I was talking about contracts between private parties (see above)

Any bank can do it and in fact you can google like a dozen different articles stating so. Seems you just don't like being proven wrong

> > There is no law that states postdated check can only be cashed after the specified date.

you neglected to say "bank" .. you said it as if anyone can do it. Look at what you wrote

So, there is a flywheel coming up to speed: FedNow [1]. I beat this horse to death here [2], but only because it is so revolutionary (for US financial infra). It catches us up with 54 other nation states with instant payment systems. It removes credit risk from delayed settlement, checks (and the risk that goes along with paper instruments), the need for a deposit account to underwrite you (if they simply disable any ability to go below $0). It's run by the Fed as a cost recovery utility, not a for profit enterprise to squeeze as much profit from as possible.

There are already 400 participants who have signed on in less than a year of the network being live [3] (the list includes Chase Bank and the US Treasury), and the CFPB is already getting in front of financial institutions attempting to charge insufficient funds fees for instant payments when unnecessary [4]. There are substantial entrenched interests fighting it (The Clearinghouse and their competing private RTP network, credit card rails, etc) due to the revenue at stake (~3-5% of the economy running through this FinInfra), but as long as the infra uptake continues and it isn't sabotaged by policy and lobbying, it will deliver more efficient value transfer at scale. Also helps when merchants surcharge credit card rail payments when cheaper alternatives are enabled.

Tangentially, the unbanked stand at ~4.5% in the US per the Fed [5]. That should be driven to as close to 0% as possible, which instant payments contributes towards (getting funds to recipients faster with less float and necessitating less or no credit extension, depending on use case).

[1] https://news.ycombinator.com/item?id=36801491

[2] https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...

[3] https://www.frbservices.org/financial-services/fednow/organi...

[4] https://www.pymnts.com/news/cfpb/2024/cfpb-proposes-banning-...

[5] https://www.fdic.gov/analysis/household-survey/index.html

[6] https://en.wikipedia.org/wiki/Unified_Payments_Interface

[7] https://en.wikipedia.org/wiki/Pix_(payment_system)

(humorously, you mention it's very "Indian" when UPI [India's instant payment system] is probably the gold standard success story [6] alongside Pix [7] in Brazil)

This system is one of the reasons PayPal's stock has imploded massively over the past ~18 months. FedNow will all but directly kill their primary business.

PayPal was around $290 / share in August 2021. Now $63 / share. Their business got larger in that time, not smaller. The market is front-running the end of the necessity (or general usefulness) of services like PayPal in the US. The stock is back to where it was in 2017, when PayPal was a far smaller business, and it's now trading for 14 times operating income. They better find a new, large business, fast.

> FedNow will all but directly kill their primary business.

Good riddance. Come for Visa and Mastercard next. $57B in combined revenue in 2023.

Interestingly the market isn't regarding FedNow as a serious threat to Visa & Co. at all. Visa's stock is at an all-time high ($569 billion market cap, making them the most highly valued financial services company in the world).

The belief must be that credit cards will retain their utility (purchase protection being one), both in the US and globally.

I would expect Visa's extraordinary margins to get damaged by FedNow.

Agreed.

“There's no particular reason why this kind of financial intermediation should be a $100 billion industry, rife with inefficiencies.”

https://news.ycombinator.com/item?id=36012866

https://www.axios.com/2023/07/22/fednow-instant-payments-cre...

https://www.usbank.com/corporate-and-commercial-banking/cfo-...

https://www.moderntreasury.com/journal/bank-payments-as-a-cr...

The market may be looking at the Europe where instant wire transfers are free and people use them (paying rent, phone, anything recurring, paying for larger items like a car). Often people use them to split a lunch bill.

Mastercard/Visa is a huge thing here in retail but PayPal is really niche. No app leveraging the instant wire transfers is getting much traction. The network effects are huge and the card fees apparently aren't that high.

Card fees here in Europe are capped on consumer cards at 0.2% for debit and 0.3% for credit.

This doesn't seem right. At least from the small business point of view. The banks here in CZ charge around 1 % + $10/month for the device and card acceptance.

He is talking about the card network, your fees include the card issuer and other things

I see. But the business owner will compare the whole amount vs. an alternative system's fees.

Purchase protection is a minor thing. The credit card companies let you spend money to don’t have, and that is valuable to both sides of the transaction.

I think PayPal will do fine. FedNow requires a frontend for UI and to find contacts. PayPal and Venmo have that and people are used to using them. Instead of ACH transfers, they will do FedNow transfers.

They had to compete with banks and Zelle, and did fine. I think Zelle is doomed.

I thought Zelle was just a friendly frontend to ACH?

Zelle runs on multiple networks (ACH, RTP, etc).

https://www.narmi.com/insights/getting-real-about-real-time-...

> Zelle is an example of a P2P option, but with one major difference from those outlined below; its transactions can be cleared via The Clearing House’s RTP rail. If both the payee and the recipient use banks that leverage the RTP rail, the transaction will settle instantly. If not, it will typically settle in a matter of minutes. Since users can send money to recipients outside of their bank and the funds settle in real-time (or nearly), it is considered to be an open (rather than closed) loop payment.

> Notably, Zelle has seen massive growth since its launch in 2017 and is now available to nearly 80% of the U.S. population, with adoption by over 1,600 financial institutions. Similar to The Clearing House, Early Warning Services (owner of Zelle) is privately held by 7 major banks.

https://danakivis.medium.com/the-state-of-faster-payments-in...

I bet you the markets keep T+2 and T+3 for a long, long time. Some habits die hard.

Catching up with 54 other nation states really sums it up. That flywheel has been revving up since 1871. Slow start.

And yes, it is unfair to compare US financials to Indian bureaucracy in the wide: Indian financials are innovative. They "got" money early on.

> "you're not from round here" risks

The what? I don't know what you're getting at with this.

> Checking for forgery, active forgery presumably underway

I learned just last week that forged cashier's checks are a risk, which you can get burned by even if your bank makes the mistake. Forged Cashier's checks! Insane. The whole purpose of those is to ensure the money exists before issuing.

When I moved to NYC from Canada in 1998, I gleefully took my hiring bonus check drawn on a major US custodial bank to local banks in the expectation that I might easily open a bank account and begin integrating myself into the mainstream. And that feeling lasted maybe 10 minutes until I realized that considerable financial bona fides from Canada were considered suspicious or worse in America.

I remember with some clarity the moment that Chase Bank suggested that a letter of reference from my bank in Canada might ease matters and they'd just hold my check some extra time for their troubles. And I thought: I don't need to continue at this bank. There is a better than even chance that I can find a bank that treats me better than this.

That's what "you're not from around here" looks like.

We’ve found that going to the bank the check was written on can help in scenarios like that.

Problem is most business checks are written against business banks.

> We’ve found that going to the bank the check was written on can help in scenarios like that.

That does not universally eliminate "you're not from around here". Anecdotally, some banks will fingerprint people who show up with a check from that bank if they don't already have an account at that bank.

Of course you can forge a cashier's check! It's just a piece of paper like a regular check.

I have a neighbor with a hobby of accepting and depositing forged cashier's checks from people who want to "buy" a car from him or do some other scam. He knows the checks will be counterfeit, so he leaves the money in his account to cover the the deposit and the $5 returned check fee. Then he posts them here:

https://www.saabnet.com/tsn/class/scam/

Here in Sweden there are (since last year) no longer any banks that will cash a foreign check, no matter which country of origin, currency or bank. There used to be one that still did it at a quite steep fee, which became relevant for expats trying to cash their covid stimulus checks a couple of years ago, but now there are none. It's just a huge yarn of fraud and manual processing, it's not worth it.

Domestic checks barely exist either, the only way you'll ever see one is if the government owes you money for some reason but you haven't told them what your bank account number is.

Small town banks ask out of town counter customers more questions and are less likely to accept random cheques for cash or even transact with people. Go to a big city and they do anything for any stranger.

In some places its "keep money local" and in others its probably confidence they won't be left holding the baby in a scam.

UK check guarantee cards helped solve some of this by security pantomime.

My employer has an on site credit union. Money from checks is immediately made available because there is a high level of trust.

> The what? I don't know what you're getting at with this.

When I moved to a new place, I couldn't pay for anything with a check because I still had my old address printed on the checks and most stores wouldn't accept checks with an out-of-state address printed on it. This was ~18 years ago, so things may be different.

I don't know about the out of state address part, but it would probably be pretty painful in general to go around stores in the US and try to pay by check these days. Some large stores probably would have the systems to handle it but it wouldn't be normal and would cause a lot of friction. Absent a credit/debit card, you'd be better off just using cash which wouldn't be normal either but would be widely accepted.

> Some large stores probably would have the systems to handle it...

What systems to handle it?

The cashier puts the check under the cash tray like you do for $100 bills, and then you toss the check in the cash bag that you send to the bank that night or at the end of the week or whatever, and the bank handles the check.

Electronic check readers to take advantage of the Check 21 rules. I'm not sure how many places still have them but they were a fixture of large store checkouts 20-ish years ago when the rules came out. IIRC Walmart (and probably other stores but I have vague memories of Walmart...) even had a printer they could put a standard check into that printed the front information (date, dollar amount in words and digits, memo) for you.

Huh. In 2006? I also moved around then, and always just crossed out the address and wrote in my new address and no-one ever batted an eyelid. I think I was still doing that until 2014 when I ran out of old chscks!

I guess I was doing it to service providers rather than stores though - most stores would much rather have had a card payment even back then.

2005 actually; I called my credit card company repeatedly to tell them "yes I've moved, charges in $NEW_CITY are not fraudulent, with little luck, so I was stuck paying with a check anywhere that wouldn't take Discover (my second card).

Ahhhhhh. For various reasons, I have never had this scenario.

It was much harder to prosecute bounced checks across state lines iirc.

Not from around here="out of state" checks.

In practice, in my part of the US, it's incredibly rare for someone to write a check.

Across Appalachia (where I grew up and now live again) checks are now exceptionally rare, which likely means they're increasingly rare everywhere in the US. Appalachia is one of the poorest places in the US and nearly all stores utilize tap to pay (either tap by card or tap by phone), checks are rare, cash is increasingly rare.

You see a lot of people outside of the US try to talk about the US while having zero first-hand experience or real knowledge of it. It's very common behavior on HN and it's very common behavior on Reddit. They just repeat what someone else said as though it were automatically true.

I live in MA and I probably write 4 or so checks a month if you count the ones my bank writes. Only one or two actually hand-written. Maybe receive 1 every couple of months. I rarely pay with cash but it's not a freak even to see someone paying cash at the grocery store or for lottery tickets. So certainly not exceptionally rare.

My town charges a premium for tax payments on the web because they outsource it. So, yes, I pay by check.

I (in CA) just looked at my bank log and I hand-wrote 32 physical checks in 2023. That's in addition to the 39 checks my bank writes for me when I "Bill Pay" online. So that's roughly 6 checks a month. I always wonder about people who claim to never write checks. Like, really? Your local handyman or gardener actually accepts a credit card?

In fairness, if someone is renting, isn't paying local taxes, isn't paying local service people on a regular basis, etc. they probably don't need checks much.

Rent is probably the main reason I have written checks in the last 20 years. Most places, I have the option of using a outsourced service with a terrible website and "convenience" fees, or I can simply hand my landlord a check for the amount. I can tell my bank to automatically mail a check on a schedule. With larger landlords I'm not sure a physical check ever actually exists, but I'm still "writing a check".

These days? Yes.

Even when cheques were used here, they often wouldn't accept cheques and would insist on cash because they didn't want the hassle of cashing cheques especially for such relatively low value transactions. Maybe if you were redoing your heating system they might take one, but a maintenence callout? Nah.

> Your local handyman or gardener actually accepts a credit card?

Zelle? 2k+ banks and credit unions support it.

https://www.zellepay.com/get-started

Personally I have never used it and have never had an issue with giving a service person a check.

Everyone takes venmo now.

Or they talk about what it was like when they lived there, not realising that things have changed in the past 5/10/20 years.

It's easy enough to find statistics on this sort of thing.

"By number, checks declined at a rate of 7.2 percent per year since 2018, dropping to 11.2 billion [in 2021]."

That's about 35 per person per year.

It seems to be around 1.2 billion in France (17 per person), around 100 million in Italy, and much, much less in the other EU countries.

Overall for the EU excluding France about 0.25 per person.

https://www.federalreserve.gov/paymentsystems/fr-payments-st...

https://www.statista.com/statistics/443677/cashless-payment-...

Very common on Twitter too.

I have FD in an Indian bank, and I lost the receipt/certificate they gave me. It's going to be a month-long process to get my money back.

In America, it's not like Indian bureaucracy levels of insane slowness.

Very few people these days use checks, FWIW, and all checks are electronically checked (and instantly cleared) at the local store. You can still forge a check, but the account that backs it has to have funds and you'll also need to forge an ID.

They’re certainly not instantly cleared in the standard banking use of the term?

I don’t doubt that you can reduce risk by e.g. using novel infrastructure which looks up the account number on the check then uses (for example) a debit card network to check the account’s currently available balance. However, even if you were looking at someone’s balance on their mobile app while they were writing the check to you, that would not suffice to guarantee that the check would not be returned as NSF. The bank can choose to NSF it for a variety of reasons, for example if they prioritize “today’s” debit card transactions over “today’s” checks in the posting order, or a check previously deposited (and included in that available balance) gets NSFed and yanked back by another bank.

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