Hacker News Reader

Comment by makmanalp | Hacker News Reader

This is too funny - my bank in Turkey (http://en.wikipedia.org/wiki/Garanti_Bank) had this 10 years ago! I wonder why banks in the US are so ingrained in their ways and horribly slow at updating themselves.

edit: They also had an SMS cash thing where you can "send" cash to anyone, which is really a code you can use at any ATM to redeem cash.

View on HN

I was recently in the U.S. and saw a person use a paper cheque. I'm not joking.

Yup, that's the most common way to pay rent in the US - it's easier , cheaper, and faster than an inter-bank transfer. Can you believe it?

As recently as 2 years ago, our apartment complex actually charged a $30/month fee for paying rent online (as opposed to sending a check).

The first time I went to pay something via online banking, I was stunned to discover that it meant that the bank would mail out a cheque on my behalf!

The US banking system is frankly, ridiculous

In Europe anyone can send money online to any other account in the EU, given the account number, usually for free.

The fact that the US doesn't have that as commonplace as in Europe is ridiculous

Canada is slightly better, they already are ditching the magnetic stripes off cards.

In the U.S. you can usually send by snail mail, email, mobile, wire transfer and ABA. Fees are fairly low (< $5)

But I shouldn't have to give you my account number for you to send me money. I don't really want to maintain a mental list of who has my account number and who to update if I change banks or something. I'm not saying checks are the best solution for all situations but they have enough use cases to make them somewhere better than ridiculous.

Every time my cleaning lady comes, I just leave a check for her on the counter. I could leave cash but then I have to make sure I have that much cash on hand every time. I could probably get an account number from her and do some sort of transfer each time. But honestly, that doesn't sound at all easier for me than just writing a check. I think that is the only check I write on a regular basis anymore. I used to send my gardener a check but I started paying his invoice online through my bank. And I'm pretty sure they actually print a check and mail it to him on my behalf. :)

Isn't your account number on the check?

Yes. My concern is not of security for my account number. But if I have to supply someone with my account number before they can give me money, then that is not the most ideal thing, IMO. They should just be able to give me the money without knowing my account number.

This is like saying that handing over a paper note to someone is more convenient than sending them an email, because you don't need to know their email address, and even if you did you can't be sure whether they still use the same email address.

That may be true but most people seem to have decided that the convenience of not needing to transfer a physical item outweighs those problems.

You're overcomplicating things... Really. That's like saying "I want people to be able to call me without my phone number"

You already give your acc number for your job.

I do that (sending and receiving money) and guess what, most of the people never changed bank acc numbers (including me). If it changes it's a non-issue.

Especially because payments either happens frequently (paying rent, for example) or it's a one-off thing.

I don't get why should I have to write a check to a landlord when they could give me they account number and let me set up a recurring payment (that's exactly what happens in Europe)

This is no longer necessary in the UK - you can send money via a phone number instead of an account number.

That's why you need a Cleaning App where you will pay 10% to the App owner, but save yourself from seeing the lady and don't have to feel bad about her life. Although you just taken off 10% off her.

I'm not saying that the US banking system is or isnt ridiculous... but in the US, anyone with a bank account can indeed send money to any other account in the world, given the account number, usually for a fee, like many other places; these are referred to often as wires, though there are actually many types of transfers. Getting it free usually requires a balance over a certain amount (banks live on fees, sadly).

Whether one can do it online depends on the bank, but most US banks and credit unions now have the ability to allow transfers and payments to anyone given a postal address (to be fair, if its just to a person, the bank may issue a paper check instead of a true electronic transfer. Sigh). They mostly call this "online bill pay" or other names, but it's become pretty full featured. In addition, most US banks are allying themselves with various person-to-person payment systems (Popmoney, though archaic and painful in use, is used by many US banks including Ally, Bank of America, TD Bank, Citibank, Fifth Third Bank, PNC, Regions, Suntrust, US Bank, and Wells Fargo, for example; Chase has it's own system as do some others. ClearXchange, Dwolla, Venmo, Paypal, and a slew of others are also gunning for this space).

So, yes, lots of problems, but I don't know if above is entirely a fair statement.

Good, so I have some constraints:

- This money transfer system works if you have (any) bank account. If you have a bank account that's all it needs (and no sign up)

- It does not depend on any action on the receiving part (so no depositing a cheque or something similar).

- It takes a couple of days tops

- A fee is acceptable, if it's something like $5 at most

- It works for large amounts (for buying a car or a house for example)

- It is trusted. If the money shows in your account that's it (unlike a cheque)

If it has this features, great.

Cheques are extremely common in the US. I'm forced to pay my car insurance by mail each month with a paper cheque, it's terrible.

I can only imagine. Sometimes when you sign up for US services you need to provide "a copy of a utility bill".

I don't get bills on paper, much less pay them that way. I come from the future though. You'll love it. You won't believe this but I'm typing this very message on a palm sized computer/telephone device.

I'm in the US, and if I were you I'd drop your car insurance provider in a heartbeat. There are so many other options that let me pay online and provide competitive rates, it just is not worth my time (or the chance that I'll forget) to mail checks in every month.

Isn't there a common system for transferring money such that every corporation has a public "number" to which you can send money, meaning that HOW you do that (your internet bank or whatever) isn't really a concern of the receiver?

I mean each insurance company etc. can't each be setting up their own solutions for online payments, right?

Each insurance company is indeed setting up their own solution for online payment.

Hilarious. Do they also invent an email standard and a currency?

Why not ditch checks and just set up a reliable/cheap money transfer system? It's peculiar how the country that is at the epicenter of the world economy and the Internet doesn't actually use the Internet for money related things (tax returns, banking, insurance...).

Finance follows information lag. If everyone had perfect information or speedy funds transfer ability then there would be no stock market.

@alkonaut

Because that's what terrorists would do.

Many banks offer a free service that will write and mail cheques for you every month. Getting a sensible insurance provider is fine too.

That's hilarious. It's like Google inventing the self-driving stagecoach.

my mom uses checks as a direct response to major credit card hacks, and i can't say i blame her

That's sad. The response should be proper credit card safety from banks and retailers.

I don't use the magnetic strip (only chip) and I don't without pin. Online use of MC/Visa passes through SecureCode/Verified by visa to ensure that leaking the CC details from a third party shouldn't be causing any skimming of my account. It's not fool proof but I'd say it's at least safer than cash and checks.

"I don't use the magnetic strip (only chip) and I don't without pin."

The same here, but then I encounter more and more places where they offer you to type your pin only in an open and insecure manner. This sadly makes the pin usage a joke and something of a hassle compared to the older magnetic strips.

I've seen something like that. It was like watching people discover the fire.

I received two cheques from our landlord about two months ago. 1) I was surprise to get paper cheques 2) how surprising easy it was to deposit it into the bank.

The easy manner of depositing means that it is still quite common for them process cheques.

By the way, I live in a small German town that only got its first EC card (or cash card POS) about 10 years ago.

Cost to do a wire transfer with my bank: $20 and I need their account # and bank routing #

Cost to go online and have my bank mail someone a paper cheque: $0 and I need their name and address.

Guess how I send people money?

How does that add up? If I send money via my internet bank too person or company the bank has to do zero work (other than maintain their servers). Anything that requires manual work has to be a lot more expensive for the bank!?

Here, transfers are free and any "paper" business such as check cashing/bill payment has steep fees.

How can your banks provide you with the labor intensive service for free and charge for what is cheaper to provide? Aren't they creating a customer behavior they don't want?

Well, it's kind of interesting. The billpay system leverages the fact that most payments for most folks go to companies, and those are all electronic links; the checks are somewhat rarer in the big picture and only to small businesses or people. The checks in this case are not "certified" in that they are not a guaranteed transfer; like any other check, they can bounce. But yes, they are printed and mailed, and there is a cost to that vs. the electronic thing.

The wire, however, including the account (the routing number can be looked up by your bank; it just saves time if you already have it) is a very specific approach to transferring money in a certified manner. It's older, and has some overhead and history in how it's tracked and managed, if for no other reason than that the funds are guaranteed. As such, there are still fees on it (and that's probably true in most countries, btw, unless you have a balance over a certain amount).

Most folks paying their babysitter $40 aren't concerned about a certified transfer, and assume they will have funds to cover the check when cashed, so they don't need to pay any fees and will just do a regular "check". And I would bet that the banks are working on ways to do a better job of making electronic links to reduce their need to print those checks (for example, perhaps if I keep paying my babysitter 2 or more times, the bank could automatically check the clearning house for the deposited check, and, in the future, autonegotiate a direct link with the babysitters bank and account for payment or something clever like that; I don't know if that would really work but sounds cool).

Bottom line is still that any manual work (cashing a check, mailing one, cash-paying a bill at a bank...) must be one or two orders of magnitude more expensive than wiring.

I'm not sure what the costs are for wiring as it is usually packaged. I pay $30-40/year for Internet bank w unlimited wiring including p2p through phone number (yes guaranteed/negotiated transfer to the babysitter!). Meanwhile cash-paying a bill or cashing a check is probably $10 a pop, simply because banks are trying very very hard to get rid of two things: cash and staff. that makes a lot of sense from a business perspective.

sterile environment is best for fast system growth, until parasites come over and try to exploit it. only then you need protection against it.

united states in general enjoyed some time where people did little to defraud system and therefore number (and later exp date, later - cvv) was fine. You can't rely on people's integrity and morale now as a safe-guard for system. Same applies to paper checks by the way.

In case of turkey I bet that defrauding was problem from beginning, that's why it was first thing to solve too.

If anything, it just tells that doing tech business in usa will be more fictitious than it could be otherwise.

this and turkish people don't really have any money at all. so the only way to pay without any money is using credit cards. this is why turkey is a big market for cc companies and they try to use brand new stuff there to lure new customers.

Reply on news.ycombinator.com