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The nice thing about a check is that you can give it to anyone. You don't need to know where they have a bank account or even if they have a bank account. (Chec
by bbanyc 7y ago
The nice thing about a check is that you can give it to anyone. You don't need to know where they have a bank account or even if they have a bank account. (Check cashers may charge usurious fees but I'm glad they exist, as a backstop if nothing else.) On the other hand I can't send money via PayPal to someone who only has a Venmo account, or vice versa, and PayPal and Venmo are the same company!
The inter-bank services like Zelle and Popmoney might be a little better, though I've never used them and don't know if they're really catching on. Can you send money via Zelle to an account at a non-Zelle bank? I know it's all ACH under the hood (even most checks get turned into ACH these days) but I don't really know how the permissions around that work.
As for the unbanked, there's always cash.
- josteink 7y ago> The nice thing about a check is that you can give it to anyone. I live in Europe. I haven’t seen a single place accept checks for at least 3 decades. But hey, we have working banking systems. Maybe that helps explain it?
- rtkwe 7y agoIt can work with anyone which was OPs point, a lot of places just don't accept them because they're essentially extending credit to every person they accept checks from because they can't be instantly cleared.
- bbanyc 7y agoAIUI, the paper giro was a direct interbank transfer decades before ACH was even a thing. They were widely used in Europe but never introduced in America. That might be part of it. Also, America has a lot more banks per capita than the rest of the world. Until the 1990s banks weren't allowed to operate in more than one state, and although there's been a big wave of consolidation since then there are still a bunch of tiny banks in out-of-the-way small towns that are very set in their ways and don't want to spend money on newfangled technology. In the rest of the world, you get the major commercial banks on board, and maybe the dominant network of savings funds/cooperative banks/credit unions, and that covers just about everybody.
- golemiprague 7y agoHaven't used check for 20 years now, I just transfer money, what's the problem transferring money from one bank account to the other? especially today when you got the bank app on your phone. Who doesn't have a bank account anyways?