3 ms·

Not a great article. First, there are 1000s of banks in the USA. In many/most other countries, there are fewer than 10 making it much easier to coordinate. Se

• legulere 11y ago
  The US system is still pretty bad. Banking throughout Europe works a bit differently everywhere, but the basis is that you have wire transfer for basically free (inside the Eurozone, this covers the whole Eurozone). Paying rent? Just set up a monthly wire transfer. "Pull" also works and is common in many european countries through direct debit. You give amazon/your electricity provider/whomever your bank account number and they just pull the money from you. No sketchy credit card companies needed, fraud is pretty minuscule.
  • tadfisher 11y ago
    > The US system is still pretty bad. Banking throughout Europe works a bit differently everywhere, but the basis is that you have wire transfer for basically free (inside the Eurozone, this covers the whole Eurozone). Paying rent? Just set up a monthly wire transfer. The reason this came to be is that the Eurozone sets up a more beneficial system for the banks than the status quo. Barriers to international transfers hurt both small and large banks, and having many sets of laws and politics around the rules made them exceedingly difficult to change. The Eurozone fixes this. In the US, interbank transfers are regulated by the banks themselves (NACHA) and the majority are performed in partnership with the Federal Reserve. The banks have all the power to improve payment and transfer systems, and none of the impetus. We have been stuck on a 40-year-old daily batch-file processing system because the banks make too much money on wire fees. It took threatened action by the Fed and Congress for NACHA to finally make same-day transfers mandatory for 2016. Note that this is still not a real-time system, and we are very, very far from such. > "Pull" also works and is common in many european countries through direct debit. You give amazon/your electricity provider/whomever your bank account number and they just pull the money from you. No sketchy credit card companies needed, fraud is pretty minuscule. This is how ACH pull works in the United States. It is enticing because the ACH network is very low-cost and the credit card networks are not involved. And yet it is a consistent source of fraudulent activity. There is nothing inherent in a "pull" model that prevents fraud; you need additional controls around the relationship to prevent that.
    • legulere 11y ago
      It actually is way older than the eurozone, those systems were just generalized to apply to all of the EU + EFTA with the SEPA payment system. I guess this stems more from a stronger hands off approach in the US. > There is nothing inherent in a "pull" model that prevents fraud; you need additional controls around the relationship to prevent that. I read a bit up on direct debit and it seems like they have fraud problems in the UK, while there's next to no fraud in Germany. I guess the reasons are that you can revert it for several weeks, it's perfectly traceable who did it
• wkoszek 11y ago
  I don't think this analysis is good. Poland has many, many banks. Maybe not 1000s, but not 10. Essentially every bigger neighborhood may have a local bank, which are like Credit Unions in the US--less popular, but also used by quite a bit of people. The key is that all these banks use simple unified system which has to be agreed on. And sending money to people is very simple, mostly based on the fact of knowing other person's bank account number, which is IBAN, but without country code. In the US sending money from BoA online to a person you're not affiliated with: good luck.