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Sincere question about cheques: How do people in the UK (or other cheque-less places) deal with the transfer of large amounts of money between private or nearly

Sincere question about cheques: How do people in the UK (or other cheque-less places) deal with the transfer of large amounts of money between private or nearly private parties? I own a small business and have worked for small businesses, and it's my experience that checks make the world go around in the woodworking field. All of the shops I've worked for have paid me by check - nobody wants to screw around setting up direct deposit for one or two employees. Several of them pay suppliers by check; suppliers don't want to take the hit on credit card fees. And all of them take checks for payment from customers regularly (and I do to), for the same reason, among others. The only downsides I see to cheques is that they're insecure and that there might be insufficient funds. If you're dealing with a trusted party (or at least somebody you reasonably believe to be acting in good faith), those are basically non-issues. The upsides are pretty extensive: 1) They don't require carrying around large amounts of cash 2) They don't require third party cooperation (at least to write) 3) They don't require internet access 4) They don't require any sort of set-up, which reduces the friction for one-time or infrequent transfers. 5) There's basically no fee for the volume we use them in [0] except for buying the cheques. 6) If a payer does bounce a check (unintentionally) the payee can insist on a more guaranteed form of payment in the future. The friction is added to the party that screwed up in the first place. Edited for formatting and to add: All of this requires an informal web of trust. I've definitely used cash for one-time large transactions with people I don't have in my network. I've sold a car for cash to a random private person and bought a bicycle with cash from a different random private person, for instance. [0] My business checking allows enough free transactions a month that I should be covered for a while; if I start exceeding that, I probably won't be super-worried about the cost of the fees) [1] A buddy worked at a cabinet shop whose plywood supplier wouldn't take their checks. They switched to counter checks or money orders, or something else that guaranteed sufficient funds at the time of issuance. Hypothetically they could have gone to another supplier. In practice, finding a good supplier is a lot of effort, there aren't many in the first place, and word gets around fast if you make a habit of burning people without making it right.

Tomte 7y ago
> nobody wants to screw around setting up direct deposit for one or two employees Then it's obviously too difficult to set up in America. Other countries do direct deposit, exclusively. A company trying to pay in any other way would look very shady over here.
- mauvehaus 7y ago
  Replying to you and https://news.ycombinator.com/item?id=21166029 https://news.ycombinator.com/item?id=21166029 It is, and most places that set it up typically require a voided check. I was working as a contractor for a large legacy big data company a couple summers ago and getting paid through their contracting agency. Said contracting agency sent me a check image (of my own check) by email TWICE [0]. I was pissed, had to close that account and re-set-up a bunch of banking stuff, and told them they were going to pay me by check because they clearly hadn't the faintest idea how to handle an account number securely. Having a system where you can do this yourself online or with an app without sending check images around is so obviously superior it's laughable that we still do it this way in the US. Lacking a superior system, it's preferable to use a system that doesn't involve trusting a bank account number in an electronic form to a (possibly incompetent) third party. [0] I'd faxed it to them originally along with my I-9 docs. They couldn't read my passport, so they emailed me the image that also included the check. Nevermind that I'd told them that I would not, under any circumstances, be emailing them that data. Sigh.
  - ghaff 7y ago
    What do you think is so secret about the info on your check? You're literally giving it to everyone to whom you write a check.
    - mauvehaus 7y ago
      The information on your check is literally the all of information needed to take money out of your bank account. Crucially, if you give one person a check, you're giving that information to one person (and their bank). If you email it, you're giving it to (potentially) all the people. And I'd hazard that the sorts of people who actually try to intercept emails are precisely the sorts of people who wouldn't have qualms about misusing said information. In the US, at least, your doctor's office won't send you anything of substance by email for this reason (probably actually because HIPAA won't allow them to by law for that reason). If email isn't considered secure enough for medical information, it certainly isn't secure enough for bank information. I'm not actually interested in investigating what security has been added to email in the several decades since it's been invented. If banks[0] and the government don't trust it, I'm not about to either. [0] Mine was aghast that anybody would be so foolish as to send a check image by email. They got the wheels moving to close the account and start rejiggering stuff with surprising alacrity, like "this is what you need to do, and Alice the manager will assist you right now."
bonoboTP 7y ago
> Sincere question about cheques: How do people in the UK (or other cheque-less places) deal with the transfer of large amounts of money between private or nearly private parties? > I own a small business [...] woodworking field. In Hungary it depends on whether the businesses are trying to evade taxes or not. If yes, cash is king. If no, then just transfer money to a bank account (I guess this is the same as "direct deposit"). All banks have online banking for this purpose. > [...] setting up direct deposit [...] There is nothing to set up for a one-off transaction. You log in to the online banking site or use the bank's app. Fill in the recipient's name, account number and amount, confirm with SMS code and it's done. But it's equally easy to set up a recurring transaction online for every week/month/whatever.
- nucleardog 7y ago
  Similar in Canada. Interac e-transfers cost a flat $1-2 (depending on your bank) and the funds are debited as soon as it's sent so when you accept one it's guaranteed available and deposited and available immediately. Just send via SMS/email from your banking app. The other person gets a link that will open in their banking app and allow deposit.
detaro 7y ago
Just plain bank transfers. You get an employees/contractors account number, or read it off an invoice, plug it & the amount into the banking site or app, done. Compared to the general overhead of doing accounting (and in the case of an employee, doing all the employment related things), it's not really effort.
deleted 7y ago
[deleted]
doliveira 7y ago
> nobody wants to screw around setting up direct deposit for one or two employees. What's there to set up? You just ask for the account number and transfer it.
izacus 7y ago
Pretty much every country has a standardized form to issue a payment request (e.g. see for example this mobile phone bill from Swiss mobile provider: https://www.salt.ch/media/filer_public/95/7c/957cfb3f-ce55-4cc3-9588-98d1650ed247/facture_en_page_1.png https://www.salt.ch/media/filer_public/95/7c/957cfb3f-ce55-4... - the orange part). The payee issues filled out form (it contains name, bank account number and reference) number to whoever needs to pay. The payer then can then go to a kiosk, post office, bank, or mobile bank to scan the form and pay the requested amount. He also gets a receipt automatically. This is effectively just a normal bank transfer just with a bit more paper trail. This is pretty much how you pay most of the things - rent, operator bills, expensive item purchases, etc.
- pintxo 7y ago
  The same for Germany. But the physical thing gets slowly replaced by all digital transactions.
rwmj 7y ago
In the UK you can get someone's account number (8 digits) and sort code (6 digits) and send them the money electronically. It's convenient but there are several disadvantages compared to a cheque: * No checksum or other checking possible. If you get a single digit wrong the money will end up in someone else's account and be impossible to recover. If it's a repeat payment then this is somewhat mitigated because your bank will remember the details from last time, and you cannot transfer money to closed or non-existent accounts. Usually for large amounts people transfer a token sum first and ask the receiver to verify it got through. The banks have been asked to set up a system where you get to see the receiver's surname before doing the transfer, but have so far failed to implement it (for years). Not coincidentally, the banks are not liable if you screw up a payment by getting the digits wrong. * There's a certain amount of fraud associated with it. A common one is the receiver's email account is compromised and you get an email saying to send the money to another account instead (which is the fraudster's account).
- dfawcus 7y ago
  If you can, make the payment using the IBAN instead. I believe all our banks have to publish this now (probably due to EU regulations), and it will often be on ones bank statement. Even though the latter part of the number is simply the sort code and account, the early part of the 'number' (text + digits) includes a checksum over the whole lot.
  - Doxin 7y ago
    And these days they cross-reference the IBAN with the entered name as well, giving another round of are-you-entirely-sure.
Fredej 7y ago
I feel like a lot of this is rooted in some assumptions that are not being said aloud that you may not even be aware that you have. This is no in any way an attack on you - I find this entire thing absolutely fascinating. I've seen a check twice in my life: One time and old lady tried to pay with it, when I was working as a cashier - I had to call in help, as we were no longer being trained in how to accept them. The other time, I had to get hold of one when I was studying in the US, as I had to pay some fee that was only payable by check. Took me a month and cost me $30 to convince my bank to help me with it, as they told me they weren't sure they could even do it - they hadn't done it in years. For context, I'm from Denmark. First of there's absolutely nothing secret about our account numbers. All they can be used for is for transferring money _to us_. No one carries cash around. Ever. Anywhere. I have not paid anything by cash in at least... I don't know, 10 years? 15? It's mostly used as gifts. Taken out of the bank, handed over, then carried back to the bank. Basically all banking can be done online or via app. The only time I visited my bank was in regards to my mortgage, and even most of that was handled by email. If I want to do a direct deposit / bank transfer, I can just log into my app and do it. Takes maybe 1 minute. However these days, most private transactions are done using an app called Mobilepay. Nowadays every single person has it. It's completely free to transfer money for regular people. You can also set up a business account, which I believe may carry a fee but it's minimal (just checked, 10 cents pr transaction in the priciest tier - roughly 4 for the cheapest). For something like a woodworking business, the way to handle business-to-business transactions, you would probably go with something like an invoice. That's usually completely automatically handled by (free )software, and would only really require the other persons email to get started. The other person receives an invoice with (for example) a direct deposit address and an amount. The transfer is free and require no setup from the payer. Internet access is everywhere and incredibly cheap. As en example, 6 GB and 6 hours is $10 a month, unlimited data and hours is roughly $20 a month. Check bouncing is not a thing. You can verify the payment before you deliver the service. Mobilepay payments are instant - I get a notification on my phone that I have received the money as soon as the other party finishes their transaction.
- astura 7y ago
  >I had to pay some fee that was only payable by check. Took me a month and cost me $30 to convince my bank to help me with it FYI a money order is basically equal to a check and you can buy one for 88 cents at Walmart.
laurencerowe 7y ago
> Sincere question about cheques: How do people in the UK (or other cheque-less places) deal with the transfer of large amounts of money between private or nearly private parties? When I was freelance consulting in the UK I would put my bank sort code (routing number) and account number on the invoice so the customer could pay me. Same for settling up among friends, quick and easy with internet banking. Payments normally show up in your account instantaneously. The thing I miss most from UK banking is the standing order. I believe it was introduced in the 1960's or 1970's and you could set up a regular scheduled payment through your bank to pay your rent. Closest in the US is bill pay which ends up sending a paper cheque to my landlord and is delayed in the post a couple of times a year. Consumer and small business banking in the UK was completely free so long as you didn't go overdrawn. Free cash machine withdrawals at all bank cash machines too. (The small machines you see in convenience stores have a surcharge.)
- dragonwriter 7y ago
  > Closest in the US is bill pay which ends up sending a paper cheque to my landlord and is delayed in the post a couple of times a year. As I understand, most US bill pay systems will do electronic transfers if the recipient is willing to provide the relevant information, and use checks as a fallback.
Doxin 7y ago
Speaking for the Netherlands here, though I'm assuming it's the same in most EU countries. > How do people in the UK (or other cheque-less places) deal with the transfer of large amounts of money between private or nearly private parties? Bank transfers. If someone wants to give you money you give them your account number and they can then either transfer money directly to your account from the banks website or if that's too modern you can fill in a slip of paper and mail that to the bank though I don't know how common that even is these days. Do note that an account number is enough for transfering money in, it's not enough for transfering money out. That generally requires at the very least a username/password/one-time-code combination. > All of the shops I've worked for have paid me by check - nobody wants to screw around setting up direct deposit for one or two employees. There's nothing to set up. You ask for an account to deposit the money and that's it. Presumably banks don't feel like receiving money is a security risk. > Several of them pay suppliers by check; suppliers don't want to take the hit on credit card fees. Normal transactions cost €0.20 at most, if a supplier feels that that's too much they probably have other things to worry about. Some companies charge the customer this fee, but still it's not a large amount. I'm not entirely sure on what the costs are of taking money using chip&pin but I'm assuming the costs are roughly in the same ballpark. I've got some nits to pick on the upsides you mention for checks as well: 1) Banking with chip&pin or transfers doesn't require carrying any cash either. I can't recall the last time I had actual money on me and not just a debit card. 2) Fair enough. 3) If a company wants your money they can instruct your bank to send an "acceptgiro" by mail. You fill it in and return it by mail to your bank. The bank from there on out processes the transfer the same way as online transfers. To be fair this does cost €0.50 since it involves all this kerfuffle with scanning in handwritten digits and whatnot. 4) Unless you count getting a business account or collecting account numbers as set-up, neither do bank transfers here. 5) Unless you deal exclusively in transactions that are less than one euro it's generally free to a rounding error here as well. 6) Transfers, once confirmed -- which takes seconds, are definitive. No take backsies. If money needs to go back then that's a separate transaction. It's not the banks job to check if transactions are fair, or if breach of contract has happened. I hope that answers some questions, If not feel free to follow up.

Tomte 7y ago

> nobody wants to screw around setting up direct deposit for one or two employees Then it's obviously too difficult to set up in America. Other countries do direct deposit, exclusively. A company trying to pay in any other way would look very shady over here.

mauvehaus 7y ago
Replying to you and https://news.ycombinator.com/item?id=21166029 https://news.ycombinator.com/item?id=21166029 It is, and most places that set it up typically require a voided check. I was working as a contractor for a large legacy big data company a couple summers ago and getting paid through their contracting agency. Said contracting agency sent me a check image (of my own check) by email TWICE [0]. I was pissed, had to close that account and re-set-up a bunch of banking stuff, and told them they were going to pay me by check because they clearly hadn't the faintest idea how to handle an account number securely. Having a system where you can do this yourself online or with an app without sending check images around is so obviously superior it's laughable that we still do it this way in the US. Lacking a superior system, it's preferable to use a system that doesn't involve trusting a bank account number in an electronic form to a (possibly incompetent) third party. [0] I'd faxed it to them originally along with my I-9 docs. They couldn't read my passport, so they emailed me the image that also included the check. Nevermind that I'd told them that I would not, under any circumstances, be emailing them that data. Sigh.
- ghaff 7y ago
  What do you think is so secret about the info on your check? You're literally giving it to everyone to whom you write a check.
  - mauvehaus 7y ago
    The information on your check is literally the all of information needed to take money out of your bank account. Crucially, if you give one person a check, you're giving that information to one person (and their bank). If you email it, you're giving it to (potentially) all the people. And I'd hazard that the sorts of people who actually try to intercept emails are precisely the sorts of people who wouldn't have qualms about misusing said information. In the US, at least, your doctor's office won't send you anything of substance by email for this reason (probably actually because HIPAA won't allow them to by law for that reason). If email isn't considered secure enough for medical information, it certainly isn't secure enough for bank information. I'm not actually interested in investigating what security has been added to email in the several decades since it's been invented. If banks[0] and the government don't trust it, I'm not about to either. [0] Mine was aghast that anybody would be so foolish as to send a check image by email. They got the wheels moving to close the account and start rejiggering stuff with surprising alacrity, like "this is what you need to do, and Alice the manager will assist you right now."

bonoboTP 7y ago

> Sincere question about cheques: How do people in the UK (or other cheque-less places) deal with the transfer of large amounts of money between private or nearly private parties? > I own a small business [...] woodworking field. In Hungary it depends on whether the businesses are trying to evade taxes or not. If yes, cash is king. If no, then just transfer money to a bank account (I guess this is the same as "direct deposit"). All banks have online banking for this purpose. > [...] setting up direct deposit [...] There is nothing to set up for a one-off transaction. You log in to the online banking site or use the bank's app. Fill in the recipient's name, account number and amount, confirm with SMS code and it's done. But it's equally easy to set up a recurring transaction online for every week/month/whatever.

nucleardog 7y ago
Similar in Canada. Interac e-transfers cost a flat $1-2 (depending on your bank) and the funds are debited as soon as it's sent so when you accept one it's guaranteed available and deposited and available immediately. Just send via SMS/email from your banking app. The other person gets a link that will open in their banking app and allow deposit.

detaro 7y ago

Just plain bank transfers. You get an employees/contractors account number, or read it off an invoice, plug it & the amount into the banking site or app, done. Compared to the general overhead of doing accounting (and in the case of an employee, doing all the employment related things), it's not really effort.

deleted 7y ago

[deleted]

doliveira 7y ago

> nobody wants to screw around setting up direct deposit for one or two employees. What's there to set up? You just ask for the account number and transfer it.

izacus 7y ago

Pretty much every country has a standardized form to issue a payment request (e.g. see for example this mobile phone bill from Swiss mobile provider: https://www.salt.ch/media/filer_public/95/7c/957cfb3f-ce55-4cc3-9588-98d1650ed247/facture_en_page_1.png https://www.salt.ch/media/filer_public/95/7c/957cfb3f-ce55-4... - the orange part). The payee issues filled out form (it contains name, bank account number and reference) number to whoever needs to pay. The payer then can then go to a kiosk, post office, bank, or mobile bank to scan the form and pay the requested amount. He also gets a receipt automatically. This is effectively just a normal bank transfer just with a bit more paper trail. This is pretty much how you pay most of the things - rent, operator bills, expensive item purchases, etc.

pintxo 7y ago
The same for Germany. But the physical thing gets slowly replaced by all digital transactions.

rwmj 7y ago

In the UK you can get someone's account number (8 digits) and sort code (6 digits) and send them the money electronically. It's convenient but there are several disadvantages compared to a cheque: * No checksum or other checking possible. If you get a single digit wrong the money will end up in someone else's account and be impossible to recover. If it's a repeat payment then this is somewhat mitigated because your bank will remember the details from last time, and you cannot transfer money to closed or non-existent accounts. Usually for large amounts people transfer a token sum first and ask the receiver to verify it got through. The banks have been asked to set up a system where you get to see the receiver's surname before doing the transfer, but have so far failed to implement it (for years). Not coincidentally, the banks are not liable if you screw up a payment by getting the digits wrong. * There's a certain amount of fraud associated with it. A common one is the receiver's email account is compromised and you get an email saying to send the money to another account instead (which is the fraudster's account).

dfawcus 7y ago
If you can, make the payment using the IBAN instead. I believe all our banks have to publish this now (probably due to EU regulations), and it will often be on ones bank statement. Even though the latter part of the number is simply the sort code and account, the early part of the 'number' (text + digits) includes a checksum over the whole lot.
- Doxin 7y ago
  And these days they cross-reference the IBAN with the entered name as well, giving another round of are-you-entirely-sure.

Fredej 7y ago

I feel like a lot of this is rooted in some assumptions that are not being said aloud that you may not even be aware that you have. This is no in any way an attack on you - I find this entire thing absolutely fascinating. I've seen a check twice in my life: One time and old lady tried to pay with it, when I was working as a cashier - I had to call in help, as we were no longer being trained in how to accept them. The other time, I had to get hold of one when I was studying in the US, as I had to pay some fee that was only payable by check. Took me a month and cost me $30 to convince my bank to help me with it, as they told me they weren't sure they could even do it - they hadn't done it in years. For context, I'm from Denmark. First of there's absolutely nothing secret about our account numbers. All they can be used for is for transferring money _to us_. No one carries cash around. Ever. Anywhere. I have not paid anything by cash in at least... I don't know, 10 years? 15? It's mostly used as gifts. Taken out of the bank, handed over, then carried back to the bank. Basically all banking can be done online or via app. The only time I visited my bank was in regards to my mortgage, and even most of that was handled by email. If I want to do a direct deposit / bank transfer, I can just log into my app and do it. Takes maybe 1 minute. However these days, most private transactions are done using an app called Mobilepay. Nowadays every single person has it. It's completely free to transfer money for regular people. You can also set up a business account, which I believe may carry a fee but it's minimal (just checked, 10 cents pr transaction in the priciest tier - roughly 4 for the cheapest). For something like a woodworking business, the way to handle business-to-business transactions, you would probably go with something like an invoice. That's usually completely automatically handled by (free )software, and would only really require the other persons email to get started. The other person receives an invoice with (for example) a direct deposit address and an amount. The transfer is free and require no setup from the payer. Internet access is everywhere and incredibly cheap. As en example, 6 GB and 6 hours is $10 a month, unlimited data and hours is roughly $20 a month. Check bouncing is not a thing. You can verify the payment before you deliver the service. Mobilepay payments are instant - I get a notification on my phone that I have received the money as soon as the other party finishes their transaction.

astura 7y ago
>I had to pay some fee that was only payable by check. Took me a month and cost me $30 to convince my bank to help me with it FYI a money order is basically equal to a check and you can buy one for 88 cents at Walmart.

laurencerowe 7y ago

> Sincere question about cheques: How do people in the UK (or other cheque-less places) deal with the transfer of large amounts of money between private or nearly private parties? When I was freelance consulting in the UK I would put my bank sort code (routing number) and account number on the invoice so the customer could pay me. Same for settling up among friends, quick and easy with internet banking. Payments normally show up in your account instantaneously. The thing I miss most from UK banking is the standing order. I believe it was introduced in the 1960's or 1970's and you could set up a regular scheduled payment through your bank to pay your rent. Closest in the US is bill pay which ends up sending a paper cheque to my landlord and is delayed in the post a couple of times a year. Consumer and small business banking in the UK was completely free so long as you didn't go overdrawn. Free cash machine withdrawals at all bank cash machines too. (The small machines you see in convenience stores have a surcharge.)

dragonwriter 7y ago
> Closest in the US is bill pay which ends up sending a paper cheque to my landlord and is delayed in the post a couple of times a year. As I understand, most US bill pay systems will do electronic transfers if the recipient is willing to provide the relevant information, and use checks as a fallback.

Doxin 7y ago

Speaking for the Netherlands here, though I'm assuming it's the same in most EU countries. > How do people in the UK (or other cheque-less places) deal with the transfer of large amounts of money between private or nearly private parties? Bank transfers. If someone wants to give you money you give them your account number and they can then either transfer money directly to your account from the banks website or if that's too modern you can fill in a slip of paper and mail that to the bank though I don't know how common that even is these days. Do note that an account number is enough for transfering money in, it's not enough for transfering money out. That generally requires at the very least a username/password/one-time-code combination. > All of the shops I've worked for have paid me by check - nobody wants to screw around setting up direct deposit for one or two employees. There's nothing to set up. You ask for an account to deposit the money and that's it. Presumably banks don't feel like receiving money is a security risk. > Several of them pay suppliers by check; suppliers don't want to take the hit on credit card fees. Normal transactions cost €0.20 at most, if a supplier feels that that's too much they probably have other things to worry about. Some companies charge the customer this fee, but still it's not a large amount. I'm not entirely sure on what the costs are of taking money using chip&pin but I'm assuming the costs are roughly in the same ballpark. I've got some nits to pick on the upsides you mention for checks as well: 1) Banking with chip&pin or transfers doesn't require carrying any cash either. I can't recall the last time I had actual money on me and not just a debit card. 2) Fair enough. 3) If a company wants your money they can instruct your bank to send an "acceptgiro" by mail. You fill it in and return it by mail to your bank. The bank from there on out processes the transfer the same way as online transfers. To be fair this does cost €0.50 since it involves all this kerfuffle with scanning in handwritten digits and whatnot. 4) Unless you count getting a business account or collecting account numbers as set-up, neither do bank transfers here. 5) Unless you deal exclusively in transactions that are less than one euro it's generally free to a rounding error here as well. 6) Transfers, once confirmed -- which takes seconds, are definitive. No take backsies. If money needs to go back then that's a separate transaction. It's not the banks job to check if transactions are fair, or if breach of contract has happened. I hope that answers some questions, If not feel free to follow up.