Send money to a customer’s checking account using their debit card number | Hacker News Reader

Send money to a customer’s checking account using their debit card number

balancedpayments.com

66 pointssteveklabnik68 comments

The sensitivity of the traditional bank account and sort number combination is totally backwards, at least in the uk, the only things you can do with a sort code and account number is pay in funds (or set up a direct debit but that's why the direct debit guarantee requirement exists). I'd feel uncomfortable extending my data exposure with my card number when I just want to receive funds.

The direct debit system is nearly identical to the US ACH system.

Any funds pulled out of your account can be returned by a trip to the bank and signing an affidavit.

The only difference is the inconvenience of having to physically go into the bank to reverse the payment.

With the vast majority of banks in the UK, a simple phone call with the two words "recover it" will suffice. They'll take care of the rest of the boring stuff.

That might be pretty difficult for members of online banks with one or no physical bank locations. I can dispute a credit card charge by email, phone, or even the web.

It's because ACH's version of chargebacks require that you sign an affidavit as part of the process.

I agree. I'm very reluctant to give anyone my debit card number. If it fell into the wrong hands, my checking account could be wiped out for who knows how long. With my credit card I can at least dispute any charges before I have to pay for any of them.

Its my understanding that Visa / Mastercard will protect non pin based debit transactions (since they are really credit transactions). ACH is a different beast, from what it sounded like when reading the article, Balanced is somehow determining account numbers / routing numbers from bank accounts, which would be bad if they got hacked. On the other hand, they could just be issuing refunds to the cards.

We are not determining bank account numbers from debit card numbers.

You're issuing 'refunds' onto the cards without charging in the first place, right?

Unreferenced refunds are generally frowned upon by the card networks. We'll talk more about what exactly we're doing eventually, but I'm not ready to explain it all while we're still building.

I believe this is what Square Cash works http://www.quora.com/Square-Cash/How-does-Square-Cash-work-t...

Only sorta kinda.

In this context we are talking about a merchant selling a product through a marketplace platform, not a purchase. Signing up as a merchant with a just a debit card is potentially a lower barrier to entry, especially for one-off, occasional situations. The alternative isn't your credit-card, it is your bank routing and account number.

Same here in Australia. I could post my BSB and account number here and the only thing people would be able to do is send me money.

Being able to write checks against anyone's routing/account combination in the US always terrified me.

Too bad that neither Balanced nor Stripe support sending money to people/companies that are not based in U.S. I guess I will have to wade through the Paypal Api !

We are actively working on that, too: https://www.balancedpayments.com/international-payments

It's the only thing we're waiting on to switch to Balanced. We talked to you guys before about that (my co-founder, Adam, from Binpress) and it seemed to be progressing but then it stalled. Looking forward to May 22

Awesome. :) Please note that that date is an 'expected launch.' Things are progressing nicely, but that's not a hard date. But soon!

Steve, is this launching to everyone "around May 22nd" or going into beta? If it's going into beta, I'd love to be on the list.

It will be available to everyone.

Something, something Bitcoin!

I think I'm most interested in balanced using crowd funding to raise money for implementing new features. Raising $50k to create a product that allows them to charge $1/use. Are there any posts from balanced about this method of getting things done?

I found these two articles: http://www.crowdfundinsider.com/2014/01/30651-balanced-uses-... http://techcrunch.com/2014/01/24/balanced-crowdfunding-produ...

It was on our blog: http://blog.balancedpayments.com/push-to-cards/

This is the first time we've done this, so we haven't written a lot about it yet because the feature hasn't actually shipped.

I will also say that the money was more in the theory of lean than actually paying for the development of the feature. We wanted to gain feedback and see if our customers would actually use this feature.

Thanks. I hope you guys blog more about it. It def. shows how interested people are in the feature and makes people pony up, to prove it.

I'm guessing they are using Visa's lesser known Money Transfer features. This stuff has been around for a little while. The company I work for recently started supporting this for insurance company payouts to customers.

https://usa.visamoneytransfer.com/Visa/Web/Help/FAQ

BTW, you can chargeback stuff on your debit card just like you can with your credit card. Both are save and typically 100% covered by the credit card company that issued the card.

I'm still amazed that people don't understand how disposable credit card numbers are. The worst thing thing you really risk when giving out your credit card is the hassle of changing any auto-payments you had attached to that card in the off-chance that your card is compromised. Debit cards are a little different in that your funds may be held for a couple of weeks under certain circumstances so that could suck but that's not often the case. /rant

I struggled with coming up with a title. This is way better, dang, thank you.

Don't worry, it seems Balanced did as well ;-)

Maybe it's because I'm from Europe, but I don't see what's so special about that.

Isn't the debit card number just the bank account number?

There's a few differences: 1. You have to hunt down a check or track down your account number and routing number from your bank where you have your debit card in your wallet. 2. We've found that customers are more skittish to share their bank account than their debit card number. I can try to guess why, but that's at least what we see. 3. Bank account numbers can't be verified in real-time (takes 2-3 business days) where debit card numbers can. This can lead to big issues the first time a customer gets paid and a poor initial experience.

> 1. You have to hunt down a check or track down your account number and routing number from your bank where you have your debit card in your wallet.

In the UK at least, your account number and sort code are also on your debit card?

US debit cards look identical to credit cards, except they say "debit" next to the card brand. No account or routing numbers.

NOoooooo not even remotely. That would be terrible.

The debit card number is a layer of abstraction that allows you to HIDE your bank account number from retailers. If you give someone your bank account number they can do whatever they want until you shut down that BANK account.

Someone steals your debit card or the number it's super simple to get that changed and replaced. Someone steals your bank account number it's a nightmare.

That's pretty grossly overstated. Bank account numbers are printed on checks, which don't have very high security around them at all.

If bank account numbers were as high risk as you say, we'd hear about rampant scams where waiters and cashiers at stores jotted the numbers down when you paid with a check and then drained your bank account later. That dog would have barked.

Do any restaurants anywhere accept checks?

> Someone steals your debit card or the number it's super simple to get that changed and replaced. Someone steals your bank account number it's a nightmare.

So account numbers are essentially secret?

Over here, they're like phone numbers. You need them to transfer money to someone else.

They aren't secret- some places require them for ACH direct transfers. Rent and mortgage nearly always requires it. The thing is you should keep it secure and NOT use it if you have the option to go another route.

In most of the world, giving someone your bank account number for them to pay into is routine, and won't give them the ability to do anything with your account other than send you money.

I'm very confused about this.

Does that mean you should NEVER pay anyone by cheque since it has your account number printed on it?

Why is the USA one of the only first-world countries that have such prevalent usage of cheques, but it's seen as so dangerous to disclose a bank account number?

What can someone do with just a bank account number, and why isn't that problem being fixed?

Whats required to withdraw money from an account; the account number, routing, and some form of signature (I'm assuming ACH drops the signature requirement).

The USA is far behind on banking security. We're still using PIN numbers for debit cards and you could take my credit card and sign for any charges on it. A lot of people in the USA sign "CHECK ID" in the signature panel of their credit cards in an attempt to stop this. The idea is that if it says CHECK ID the clerk will definitely stop and check ID. But if it's not signed (which they aren's supposed to accept) or the signature is incorrect.. a store clerk will 99% of the time just pass it on. I actually never sign my credit cards because it requires a damned marker that won't look like my signature anyway.

I've never once been hassled.

> Why is the USA one of the only first-world countries that have such prevalent usage of cheques

I'm actually thinking about writing a blog post explaining my theory behind why this is the case. Would that be interesting?

tl;dr of my theory: geographic size and decentralized gov't in the US allowed a paper cheque system to outlive other countries'

Also probably the reason slavery lasted so much longer past the end of the civil war in parts of the South. Interesting parallel I guess, as paper checks seem just about as antebellum to me now.

If someone steals your bank account number and charges you, you call your bank to reverse the transaction and block any future transactions from the thief :) did that yesterday, works like a charm.

I've never heard of banks completely blocking a company from attempting a charge. That's good, thankfully I've not experienced that.

I never understood why I need a transaction number for every wire transfer I do (this is Germany) which is sent directly by the bank via mail with no mention of the associated bank account. Account numbers are public and printed on every letter head, but the TANs are the key to withdraw money from it online. Been using it for 17 years, never had a problem. But I cursed the system a lot since it's such a hassle. Some banks even send you a piece of hardware you have to put against the screen (!) with a bar code to show you the next TAN. It's ridiculous.

In the Netherlands the bank account number is printed on the card. Would that solution not solve the problem being addressed here?

Can I use this to pay my employees and contractors instead of using a ACH direct deposit service?

yep!

Well done guys! Question though, if a debit can settle out of my checking account through my debit card (ie my Simple account) in minutes at a traditional merchant (gas station), why do you credits take 1-2 days to settle?

(ceo of Balanced)

Under promise. Over deliver. That's the best way to answer that. :-)

We have partnerships and direct ATM network integrations to clear in real-time for ~55% of debit cards. I didn't want to promise that until we've done enough volume to see that clearing time for ourselves instead of basing it what our partners have communicated to us. Once I have enough data/proof, I'll update the language to reflect the faster speed.

Totally fair! Thanks for the reply, I appreciate it.

Are there plans to raise the $2500 limit at some point or is this some type of system restriction with Debit Card transactions? Also, is there a total daily limit?

No daily limits.

Visa limits the transactions to $2,500 per transaction. Other networks don't have as well defined of a limit. We set the $2,500 limit in the API to set a reasonable expectation. We'll learn more about the limits over time and document it here: https://github.com/balanced/balanced-api/issues/603

This is similar to Square Cash, no?

Balanced is offering a white-labeled API. Square Cash is a branded consumer product.

The mechanism of paying people using their debit cards is the same.

Any chance you can make it so I can send the balance of a debit card to another debit card, or bank account for $1?

What is the use case?

If a customer wants to pay with a debit card, I want to avoid paying the credit card percentage fees.

Sort of like how gas stations have a higher price for credit card payments versus debit card payments.

It seems to me like you guys already have a system to map debit card numbers to bank accounts, so this should technically be possible as an ACH transfer. No?

> It seems to me like you guys already have a system to map debit card numbers to bank accounts, so this should technically be possible as an ACH transfer. No?

That's not the way we're doing it. I've tried to find such a system, but AFAIK, it's not possible.

$1 fee per transaction. Done entirely by computers. In huge volumes.

There is no reason that entirely electronic transactions should cost more than fractions of a penny to process. Any justification for this cost is complete bullshit.

Welcome to the banking system. If they're going threw the debit card channels, through Visa, they might charge a fee, Balanced's bank may charge a fee, Balanced has to pay its employees, pay for hosting its servers, make sure they are PCI compliant, etc.

Sounds like a lot of bloat and over exaggeration on the part of banks and credit card companies for how much all these things cost. They're still making a killing...

fraud is often priced into these systems since most payments instruments in the US aren't push-only. Sorry if it sounds like I'm justifying...

Another reason for me to love Balanced, other than the fact they're the only processor who wanted to work with us - will be making good use of this feature for our storefronts platform!

Is there any way to use this as a consumer replacement to things like PayPal/Venmo? It can be really frustrating to have to wait a few days for payments to clear.

Square Cash does this exact thing. Uses an app or via email, deposits via debit card number, and has no fees. No idea how it works, but it's how most of my friends send me money. https://square.com/cash

Yeah, for square the user can use debit card info or routing/account info. It appears that square has designed the onboarding UI to strongly favor debit cards, but there is a little link in there to account instead.

The really curious thing, however, is that no matter which one you choose, the transactions appear to be debit.

I'm pretty sure I signed up with an account number, but all the transactions in and out of my account are debit transactions.

FWIW, chase online clearly report either "ACH {Credit,Debit}" or "Debit Card Transaction"

(Balanced co-founder here)

Balanced would be happy to discuss working with Venmo/PayPal as a vendor to power their push to card payouts if they're interested.

Great to see you guys continuing to add new ways to move money.

Reply on news.ycombinator.com