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The first time I was in the US there was a commercial playing on the radio frequently from a company that would help you pay regular expenses.

You take a photo of your cheques for rent and utilities and send them to the company. They will then photoshop new info onto the cheques every month and make sure your stuff is paid for a small fee.

Essentially you pay somebody to do cheque fraud on your behalf. And that's a thing that works in the US.

Honestly, every time I hear anything about the US banking system I get goosebumps. It's frightening. Like, for instance, Mint can get to all your bank info with just username/password. No RSA certificates required for logging in.

Scary.

That's hilarious.

>It's frightening. Like, for instance, Mint can get to all your bank info with just username/password.

Well, they also use your security questions. How is that frightening? It's not any different than logging into your bank account normally except that a website does it for you.

Exactly. That's the frightening part. I'm used to needing RSA and a password and there's special bits of the website that ensure it's not phishable.

And if I mistype my password three times I have to personally go to the bank and show government issued ID to get it reset.

As an American who's living in Israel let me tell you that the backwardness of the US banking system doesn't even begin to COMPARE to the sheer inconvenience of banking here.

* No chip and PIN. Yep, same here.

* You have to interact with your branch for EVERYTHING. EVERYTHING. Not your bank. Your branch.

* The banking websites are all uniformly atrocious. Every single one looks like they designed it back in 2002 and just stopped and said, "meh, this is good enough."

* You pay for everything. Want to withdraw money from an ATM - your bank's ATM! - 1.76 ILS. You want to withdraw cash from a teller? 10 ILS. You wrote a check? 1.80 ILS. You thought about the bank on your way to work? 2.40 ILS.

* Checks can not be stopped. In fact it is illegal to issue a stop-payment on a check.

* The bank scrutinizes EVERY CHECK YOU WRITE. If the signature doesn't match the signature they have on file -- even a little bit because you were in a rush -- they reject the check. Oh, yeah, and they examine it by hand, not by machine. Oh and when they reject your check for technical reasons? 9 ILS.

* Direct debit... ok, actually, they've got this one covered. It's super easy. Except you still have to fill out a form that authorizes said payee to debit your account.

* You pay a monthly fee to the bank for the privilege of banking there. Not all banks have a monthly fee necessarily, but they all have surcharges so it all amounts to the same thing at the end of the day.

Oh gosh, don't even get me started on just how awful and inefficient the system is here. It is ripe for disruption except that the government has pretty strict controls around everything that goes on in the banking sector.

> You pay a monthly fee to the bank for the privilege of banking there.

Free banking is not as ubiquitous in the UK as it used to be, especially as rules regarding using admin charges (for letter sending and such) as a revenue source are getting tighter.

A number of banks are planning to drop their free options in some instances. FirstDirect, to name one, already have: their standard (and only) current account is free if you pass at least a grand per month through the account or maintain an average balance of a grand, otherwise it costs £10/month (they word it the positive way around: the is always a £10/month fee, but if you pay enough in or otherwise keep a good balance they "waive" the fee) - so it is free for many but far from all (if you are on, or close to, the statutory minimum wage your wages won't be enough after tax/NI even if you work full time (assuming full time is between 35 and 40 hours per week).

One thing that still gets me is how long it takes for payments to get from some accounts to some others. Over the last couple of years "faster payments" has become common so between most current accounts payments take less than an hour (sometimes less than a minute) to show up at the destination, but it still takes three working days for money to get from my current account to my credit card account despite the fact that the two accounts are held at the same bank.

> People still use cheques for things! ... No obvious equivalent to the UK direct debit system for automatic bill payments.

I can't speak for Europe, but in Australia I believe EFT is "trivial" because the risks are low.

To open an account you must prove your identity with 100 points of identifying documents. In practice you need to show one of a passport or a driver's licence, plus some other soft ID like a bank card, a bill to your residential address, a student card and so on.

In practice this means that banks have relatively high assurance of who the money is coming from and who it is going to. That makes fraudulent transfers very difficult and so there is no risk-managing requirement for a multi-day clearance procedure for interbank EFT (to give time for a cheque to come up solid).

As time has gone on, banks have progressively moved from overnight batch consolidation of transfers to having what having mostly-same-day transfers. I don't know if they're running multiple batches or if some banks have set up direct connections outside of the old clearing house framework and I don't much care. It's just nice that I can pay a bill the day before it is due and know with confidence that it has been paid.

And I like even more that I can receive invoice payments on a Thursday and spend it no later than Friday.

When a payment date goes past, I can ring the next day to inquire about it and nobody is going to give me the cheque's-in-the-mail story.

Australian banks run a gross real time settlement system (the same goes in new zealand). In theory this means certain classes of bank payments should clear near instantly.

Works in practice too. Within the same banking institution, I can send money via EFT to a non-related account, and that person can see the funds in their account & withdraw it from an ATM within minutes.

When I moved to the UK I quickly found out you could send money to someone with only a sort code and account number. I then found out that it was free to do so. My mind was blown. How on earth could banks operate without charging for it?! Good on ya UK!

In Germany you could do this from any cash machine for decades, long before online banking.

Hah here in Australia I can transfer money over SMS or even bumping my iPhone to someone else (providing they're with the same bank as me).

Oh yes, and within EU you can transfer money bank-to-bank at the same cost as domestic transfers (Which is to say near nothing). How about that?

Don't you mean within the eurozone? Because otherwise this is not true.

I _think_ the exact definition is within http://en.wikipedia.org/wiki/Single_Euro_Payments_Area modulo variable exchange rates

Going from US to NL was like moving to a banking utopia:

Transfer money? Just log in via browser or on your phone, put in their bank account number and the amount, done! Cost: €0. Happens instantly with same bank, next business day with another bank (or faster). No possibility of bouncing anything.

Two-factor authentication has been around for a while, and is required for sending money. Either via a PIN challenge-response device or an SMS. People can't charge you money without your consent, or forge checks.

Recurring transactions can be set up easily, so the rent goes out every month... Some service providers can also send an invoice to your financial inbox (online banking) where you can view / pay them.

No signatures. You use your pin-code for transactions with your card, or online banking.

International wiring can also be done online, easily.

One negative (maybe) is that credit cards are taken almost nowhere, since the normal payment system is so good. Dutch people don't spend money they don't have (since they can't), which might be a pro, but can be annoying for visiting tourists.

This is still the current status in 2013?!

I lived in the US in the early 2000s and I found all these things to be incredibly backwards then. Imagine now!

My favorite was people using cheques to pay for utilities using regular mail. It was all baffling to me.

Banking in the U.S. is atrocious, but it's rapidly improving.

* no chip and pin - still largely true, they experiment every so often with chips but it never really catches on. I suspect we'll eventually leap frog this when something better comes out

* branch - usually the local bank can handle everything for you

* wire xfer - we usually just use Western Union for sending money back to my wife's family. It's a simple form, and it takes all of 3 minutes.

* staff on your side - banks here do keep playing at bizarre account fee BS, there's no end to it

* bank account # - it's weird. If I have your account # I can deposit and withdrawal money (it's how we do automatic deposit and bill pay). I think the banks try and watch for wire fraud. But it's hopelessly insecure.

* checks - pretty much just old people at this point. I think the last time I wrote a check for anything was 8 years ago when I needed to move lots of money around to buy my house.

* non-US, cash is always good

* direct bill - very common here, you just have to set them up with each service using your account #. Like I said, we haven't had to write a check in years.

The thing that most puzzles me about US banking is the fact that wire transfer (expensive) is the only reasonably real-time electronic transfer mechanism.

ACH ("direct debit") transfers take 1-3 business days to come in, and can only clear on business/banking days, and only after the bank opens, at 9 AM! That means someone is actually sitting there and clearing the transactions manually! WTF? Is this 1954?

When my UK friends initiate a transfer from Paypal to their bank, it hits their bank instantly, any time! 3 AM on Sunday morning? No problem. As I understand it, the same is true throughout much of Western Europe. Only I'm stuck broke until the bank opens on Tuesday so my "electronic" transfer can "clear".

Yes, I'm aware of the fact that they probably realise substantial profits on the interest-free floats. I don't really care about the reasoning for it; the fact is, it's absolutely absurd.

ACH funds land next-day, (usually early morning) if they're sent by the cutoff time, which is usually 8pm EST. Source: My business is built on timely sending of ACH funds.

Moving from UK to US, the dire state of banking here was one of the most noticeable regressions. I'd add to your list the crazy ATM fees.

We switched to Ally (online only bank) a while ago which fixes some of the issues. At least now I can deposit cheques by awkwardly photographing them with my phone and new chequebooks are free...

This is definitely "your mileage may vary."

> * No chip and pin. You still sign credit card slips.

Well, there's "just PIN," but yeah.

> * You have to interact with the branch where you set up your account for a bewildering array of things.

I opened my last two bank (checking and savings) accounts entirely online, one with an online-focused bank (USAA) and one as brick and mortar (technically, a credit union, but same basic concept), no visit necessary.

> * Sending a wire transfer overseas involves sitting in a branch and filling in reams of paper work.

Chase let me send a wire transfer internationally (to a foreign government, no less) entirely through their online banking system. The "privilege" cost me $40 (damn) but it did work.

> * Bank account numbers are treated as secret information - they are starred out in the online banking interface! Apparently, it I know your bank account number I can take your money?

Yep, unfortunately. That goes along with:

> * No obvious equivalent to the UK direct debit system for automatic bill payments.

I can give my routing number and bank account number to a biller and they can cheerfully slurp as much money as they like from my account. Hopefully it's the correct amount. If it isn't, there's a regulation that allows me to fix it but it takes a few days and phone calls.

> * People still use cheques for things! Which you have to pay extra for (you actually buy cheques from your bank). And "electronic banking" incorporates mobile apps that scan cheques.

I buy checks from Checks-in-the-Mail, a third-party reseller, for a few bucks every couple of years because...

> * As a general rule, paying someone some money (for rent, for example) is fraught with difficulty, especially if you hold a non-US bank account.

I write checks for my rent. My apartment building has an online payment system but charges $4.95 for the "privilege" of paying electronically or $39.95 (holy cow) to pay by debit or credit card. Sadly, paying by sliding a check under the door of the management office is still free, so I do that.

> I write checks for my rent. My apartment building has an online payment system but charges $4.95 for the "privilege" of paying electronically or $39.95 (holy cow) to pay by debit or credit card. Sadly, paying by sliding a check under the door of the management office is still free, so I do that.

If your apartment rents for $X that's what they want, not ($X - credit card fee), which can add up. The last place I lived was as you described, except it was $45 by credit card. Where I live now, I'm not sure what the credit card fee is, but they finally dropped the fee to pay electronically from your checking account.

In Denmark, most companies charge you less of you go with automated billing - it's usually set up to happen around the 2nd-5th at the start of every month (although some have cycles that only run every 3 months).

There is no risk to you as a consumer, you have to either give them permission to set it up on your behalf or you basically use the first request for money to set it up (there's a bunch of numbers you enter and VOILA it works). Also, you can cancel these at any time from your end (but your landlord might not be too happy with that).

I write checks for my rent. My apartment building has an online payment system but charges $4.95 for the "privilege" of paying electronically or $39.95 (holy cow) to pay by debit or credit card. Sadly, paying by sliding a check under the door of the management office is still free, so I do that.

Canadian here. I still use cheques for rent as well. Once a year I give the landlord a set of twelve post-dated rent cheques, and they deposit one a month. If I move out before the end of the year, I ask for all the unused ones back and void them. If they were to not return them, I have the cheque numbers so I would go to the bank and stop them.

It works out pretty well, all things considered. They're post-dated, so the landlord can't deposit them before the start of the month, and I don't have to remember to cut a cheque each month. I just have to ensure there's money in the account.

It does feel old-fashioned to write out a cheque by hand these days.

> No chip and pin. You still sign credit card slips.

I don't sign them, I just move the pen in a wiggle. It's gotten to the point that many stores don't even ask for a signature at all. If you use the debit card network then you have a pin. The difference between mag-strip and chip isn't that large in practice.

> You have to interact with the branch where you set up your account for a bewildering array of things.

I haven't been in a physical bank in over a decade.

> Sending a wire transfer overseas involves sitting in a branch and filling in reams of paper work.

No it doesn't. You can do it online and it takes just a few minutes.

> Wells Fargo...

Sorry, don't know what this situation is.

> Bank account numbers are treated as secret information - they are starred out in the online banking interface! Apparently, it I know your bank account number I can take your money?

Sort of, but your account number is printed on every check, so it's not really secret. And anyway it's not really that easy to take money that way - you have to be a validated organization.

> People still use cheques for things! Which you have to pay extra for (you actually buy cheques from your bank). And "electronic banking" incorporates mobile apps that scan cheques.

We don't use cheques, we use checks. :) Depending on the bank you may get them for free, and they are pretty cheap from 3rd parties (you don't have to buy them from the bank). Legally you can even print your own - especially if you get magnetic toner. Or just write one on a piece of paper.

But people with checks are becoming less common - people use online bill pay which will print and mail a check for you for free. (And convert the check to an electronic deposit if they know the account number of the recipient.)

> As a general rule, paying someone some money (for rent, for example) is fraught with difficulty, especially if you hold a non-US bank account.

Bill pay. It's free (usually) and very easy. A non-US bank account is a big problem though (but one very very few people experience).

> No obvious equivalent to the UK direct debit system for automatic bill payments.

Bill pay again.

> Coming from Europe, It all feels decidedly third rate. I don't think the solution is bitcoin, I think the solution is fixing regular banking.

Don't go to a physical bank. Online banking is where it's at now.

> I don't sign them, I just move the pen in a wiggle. It's gotten to the point that many stores don't even ask for a signature at all.

I'm curious; are you talking about payments under $10/$20 (although some seem to be higher)?

I understand this is voluntary risk on their part, as it makes more sense to get people in and out faster. As I was told growing up, the signature on those receipts is what held get your money back if someone commits fraud with your card.

Of course I was told a lot as a kid that I know now to be false.

I don't know the legal rationale. But yah, it's small payments like you mention.

Maybe it's because the signature is useless - they all use electronic pads now and the resolution and quality is such that you can't make out the signature of even the neatest signature.

This reminds me:

I was in the SF area, pitching a product, for a few weeks last summer.

You can imagine my utter elation when somehow the mag strip on the only viable credit card I had with me ripped half off, and _nowhere_ did they accept chip and PIN.

I was lucky I wasn't travelling alone.

As someone coming from the US to the UK I can say that the feeling is mutual. Some things are suboptimal in the US system but

> * No chip and pin. You still sign credit card slips.

There are two systems at work here, the credit system and the ATM system. The latter uses a PIN (no chip, so basically online verification) but the primary difference is related to chargebacks and fraud. Like in the UK, in a PIN system if I know your PIN and get your card I can loot your account and you are SOL. In the US a credit card transaction with a signature but no PIN means that the merchant is on the hook for fraud. If I get your card number and go on a spending spree you are not going to take a hit for any of the charges, the merchants are.

> * You have to interact with the branch where you set up your account for a bewildering array of things.

You can, but you seldom need to. I have several online-only accounts that I still maintain for making US payments and except for cases where I was taking out a loan to buy a house or car I think that I did not actually step inside my bank (any branch) for over ten years.[]

OTOH, I have needed to note down the exact UK branch in which I opened my account in on at least five different occasions in the last month as I opened various business relationships or established services. In the US no one ever asked for the name of my bank let alone the specific branch.

> Bank account numbers are treated as secret information - they are starred out in the online banking interface! Apparently, it I know your bank account number I can take your money?

ACH (automated check handling) is the pseudo direct-payment system we have over here. It kind of sucks, but it is basically an electronic form of the silly checques that you mention later. With the bank routing number and your account number I can write a check on your behalf. OTOH, with a couple of clicks online I can also order paper checks for your account and start making payments. They will eventually (and hopefully pretty quickly...) fail out as fraud, but when you get things set up between your account and companies you deal with on a regular basis there is a fairly seamless flow from your paycheck direct-deposit to your rent/mortgage and utilities, etc. It is just a crufty legacy system that gets tweaks every decade or two but will lumber on for a while because there is so much infrastructure built around it.

> * As a general rule, paying someone some money (for rent, for example) is fraught with difficulty, especially if you hold a non-US bank account.

And why should the system optimize for non-US bank accounts when the percentage of people a merchant will interact with who fit in this category are 0%? Part of the thing to consider here is that the US retail/merchant payments and banking system does not need to interact with anyone outside of the US; yes, there are some exceptions but they are so dwarfed by the internal transaction volume that they effectively do not exist and if you do need that rare service you can use a third-party like western union or the admittedly onerous wire transfer process. The goal is to make internal transactions easy and limit the exposure to fraud (except when it conflicts with the first goal) with the bonus of all operations being under what is for all intents and purposes a single legal jurisdiction.

Everyone has thoughts on how to fix the system or what cool ideas should be applied from other countries but most of these people fail to grasp the concept that for most people the system is not broken and so you are fighting consumer indifference and an entrenched incumbent that makes telcos look like pushovers.

[*] One interesting thing about US banking is that the local branch interactions that you complain about are actually one of the few things that most bank customers want more of. Specifically, if you press people on what is wrong with retail banking it is that there were a huge set of mergers in the past twenty years that effectively eliminated the local retail bank where people knew who you were, cared about you, and looked after you in a way that is simply not possible in a modern world of retail banking giants.

> in a PIN system if I know your PIN and get your card I can loot your account and you are SOL

That's not entirely true - legally the bank has to carry out an investigation and prove fraud or negligence on your part. Simple use of the PIN is not sufficient evidence. Sadly, however, this legislation is not always followed to the letter and many customers do not force the issue.

> There are two systems at work here, the credit system and the ATM system. The latter uses a PIN (no chip, so basically online verification) but the primary difference is related to chargebacks and fraud. Like in the UK, in a PIN system if I know your PIN and get your card I can loot your account and you are SOL. In the US a credit card transaction with a signature but no PIN means that the merchant is on the hook for fraud. If I get your card number and go on a spending spree you are not going to take a hit for any of the charges, the merchants are.

That is absolutely true. However thanks to chip, cards cannot be copied or forged. Therefore merchants are paying lower commissions on debit/credit card payments as there are fewer fraudulent transactions. Some merchants are even declining to accept non chip-and-pin cards (not sure if is legal though).

Be careful about using works like "cannot" in terms of what is possible to trust regarding hardware that is in possession of a potentially adversarial party and systems that assume said cards are secure. There are a variety of attacks that are possible (pre-play, attacks that can make a stolen card work without a PIN, etc.) and it is likely that in the future it will be easier to perform these attacks. It is a standard risk/convenience continuum and everyone has staked out a different portion of that zone. In the US the merchant pays a lower commission on debit card (e.g. with PIN) transactions as well for the same reasons, which is why they will tend to suggest that option or offer it up as the default when you use a card that can be either debit or credit. When I suggested that there were only two systems I was simplifying a bit too much and you definitely caught me on that one.

In most places it seems that there are two (and sometimes three depending on how mobile phone payments are cleared) dominant e-payment formats, one which puts the fraud burden on the merchant and one that puts it on the customer. The size of the burden is usually set by regulation and the level that this is set at tends to inform the nature of the security at the endpoints vs. what happens at the middle when clearing and reconciling transactions.

"Some merchants are even declining to accept non chip-and-pin cards (not sure if is legal though)."

If you travel to Sweden, you can't even use credit cards that are non chip-and-pin. I even went to one store that refused to accept cash: you had to use a chip-enabled credit card.

In Australia, NFC wireless transactions (Visa PayWave / Mastercard Paypass) are gaining traction for purchases under $100. It's very convenient & usually fast.

> in a PIN system if I know your PIN and get your card I can loot your account and you are SOL

I guess, but if someone where to know a password to a sensitive online system they could do equal damage.

> Like in the UK, in a PIN system if I know your PIN and get your card I can loot your account and you are SOL.

This is not accurate (well, since 2009 at least). It has nothing to do with chip-and-pin, but with how the legal system distributes liabilities. Section 62 of the Payment Services Regulations 2009 [1] limits personal liability to £50 (except in cases of fraud or gross negligence).

Chip-and-pin is simply an authentication mechanism that reduces the risk of fraud; it does not address legal questions of liability.

[1] http://www.legislation.gov.uk/uksi/2009/209/regulation/62/ma...