4 ms·

There's no middle man taking a "cut" with a check. For large $ transactions, it's worth the hassle.

by niij 7y ago

nabla9 7y ago
So why are middle men taking a cut in the US that other countries don't have? Why electronic payment costs money in the US? That's the cheapest way to pay and process payments. In Finland that cost's nothing and it's the default for paying large bills and payments.
- dickeytk 7y ago
  the fees for credit cards are like a tenth in the EU vs US. It's not free though. EDIT: "for credit cards"
  - 9nGQluzmnq3M 7y ago
    Nope, since 2017 the law has been that bank transfers anywhere within the EU are free. https://brussels-express.eu/bank-transfers-will-immediate-free-within-europe/ https://brussels-express.eu/bank-transfers-will-immediate-fr...
    - nulbyte 7y ago
      This doesn't sound like it covers credit card interchange. Does it?
  - deleted 7y ago
    [deleted]
- rsynnott 7y ago
  Because the EU told the banks not to charge for transfers, essentially. It will be interesting to see what happens in the UK once they truly leave.
kasperni 7y ago
This might be a stupid question, but do you have to pay a fee for transferring money from one bank to another bank when both banks are located in the US?
- dickeytk 7y ago
  it doesn't cost anything but there is risk involved. So nobody takes a cut, but it also isn't "free". This is a fantastic series that explained it really well to me: https://engineering.gusto.com/how-ach-works-a-developer-perspective-part-1/ https://engineering.gusto.com/how-ach-works-a-developer-pers...
- mcherm 7y ago
  Because the banks charge a fee (well, some of them do). I know that sounds stupid but it's the truth. There is no law against banks charging fees like this, banks like to make money (don't we all!), and (significantly) banks don't seem to lose customers by charging these fees.
- niij 7y ago
  In general: no. External transfers (ACH) and checks are generally free for within the US.
  - PaulDavisThe1st 7y ago
    Also, compared to within the EU, ACH is incredibly slow. EU bank-to-bank transfer is instantaneous. ACH takes at least 1 day, often 2-3.
rsynnott 7y ago
In most European countries SEPA and its predecessors have taken this role for most people. I’m 34 and have never had a personal cheque book; there’s just no need. It is a cultural thing to an extent though; there are EU countries where they’re still used to some extent despite the presence of a modern banking system.
- niij 7y ago
  I'm not european, so am unfamiliar: would you use a SEPA transfer for, say, a $1000 tv from a small business retailer? What about buying a $3000 used car from an individual?
  - rsynnott 7y ago
    Most people would use a card for the TV, at least in person (online it’s very country dependent; probably card in the UK or Ireland, but could be SEPA, something like SOFORT or various other things in Germany, say). Not necessarily visa/mc; many countries have national networks, which are typically cobrandec with visa/mc. Car could be SEPA (or equiv in non-Eurozone countries), bank draft, or even cash, though cheque is possibly less likely due to fraud concerns. Some people do it by actually physically going to a bank with the seller, I think (I don’t drive, so have never done his myself). For in person stuff, where you live plays a role too; only a minority of countries currently have SEPA Instant, though that should change soon. For everyone else, it’s a day or so delay from when you send the payment in the bank app.
  - Slartie 7y ago
    I bought my last two cars via SEPA, the first from an individual, the second from a dealership. Both were used, but still significant sums. In both cases I of course had a signed contract in hand before sending the money, and have done a bit of due diligence on my business partner (I met the private individual at their home address, and checked out how long the car dealership has already operated there and whether there were any signs of imminent bankruptcy). And of course I got hold of the vehicle immediately after the transfer went through (which is guaranteed in a single business day nowadays; when I bought the first car it was still in the area of 2-3 days). As for the $1000 TV, I would probably pay that at an electronic payment terminal with a debit card. If buying from a retailer, that's usually the way to go, no matter how small.
nulbyte 7y ago
For larger transactions, ACH is becoming much more desireable. A bank I do business with currently offers originating next day ACH for $1 a transaction. When you add up the dollar cost of a stamp, check, and envelope, and the time expense of printing, mailing, and waiting for it to clear, ACH is highly affordable. I'm surprised taxing authorities still charge fees for getting paid faster when ACH is so cheap.

There's no middle man taking a "cut" with a check. For large $ transactions, it's worth the hassle.

by niij 7y ago

There's no middle man taking a "cut" with a check. For large $ transactions, it's worth the hassle.

So why are middle men taking a cut in the US that other countries don't have? Why electronic payment costs money in the US? That's the cheapest way to pay and process payments. In Finland that cost's nothing and it's the default for paying large bills and payments.

dickeytk 7y ago
the fees for credit cards are like a tenth in the EU vs US. It's not free though. EDIT: "for credit cards"
- 9nGQluzmnq3M 7y ago
  Nope, since 2017 the law has been that bank transfers anywhere within the EU are free. https://brussels-express.eu/bank-transfers-will-immediate-free-within-europe/ https://brussels-express.eu/bank-transfers-will-immediate-fr...
  - nulbyte 7y ago
    This doesn't sound like it covers credit card interchange. Does it?
- deleted 7y ago
  [deleted]
rsynnott 7y ago
Because the EU told the banks not to charge for transfers, essentially. It will be interesting to see what happens in the UK once they truly leave.

kasperni 7y ago

This might be a stupid question, but do you have to pay a fee for transferring money from one bank to another bank when both banks are located in the US?

dickeytk 7y ago
it doesn't cost anything but there is risk involved. So nobody takes a cut, but it also isn't "free". This is a fantastic series that explained it really well to me: https://engineering.gusto.com/how-ach-works-a-developer-perspective-part-1/ https://engineering.gusto.com/how-ach-works-a-developer-pers...
mcherm 7y ago
Because the banks charge a fee (well, some of them do). I know that sounds stupid but it's the truth. There is no law against banks charging fees like this, banks like to make money (don't we all!), and (significantly) banks don't seem to lose customers by charging these fees.
niij 7y ago
In general: no. External transfers (ACH) and checks are generally free for within the US.
- PaulDavisThe1st 7y ago
  Also, compared to within the EU, ACH is incredibly slow. EU bank-to-bank transfer is instantaneous. ACH takes at least 1 day, often 2-3.

rsynnott 7y ago

In most European countries SEPA and its predecessors have taken this role for most people. I’m 34 and have never had a personal cheque book; there’s just no need. It is a cultural thing to an extent though; there are EU countries where they’re still used to some extent despite the presence of a modern banking system.

niij 7y ago
I'm not european, so am unfamiliar: would you use a SEPA transfer for, say, a $1000 tv from a small business retailer? What about buying a $3000 used car from an individual?
- rsynnott 7y ago
  Most people would use a card for the TV, at least in person (online it’s very country dependent; probably card in the UK or Ireland, but could be SEPA, something like SOFORT or various other things in Germany, say). Not necessarily visa/mc; many countries have national networks, which are typically cobrandec with visa/mc. Car could be SEPA (or equiv in non-Eurozone countries), bank draft, or even cash, though cheque is possibly less likely due to fraud concerns. Some people do it by actually physically going to a bank with the seller, I think (I don’t drive, so have never done his myself). For in person stuff, where you live plays a role too; only a minority of countries currently have SEPA Instant, though that should change soon. For everyone else, it’s a day or so delay from when you send the payment in the bank app.
- Slartie 7y ago
  I bought my last two cars via SEPA, the first from an individual, the second from a dealership. Both were used, but still significant sums. In both cases I of course had a signed contract in hand before sending the money, and have done a bit of due diligence on my business partner (I met the private individual at their home address, and checked out how long the car dealership has already operated there and whether there were any signs of imminent bankruptcy). And of course I got hold of the vehicle immediately after the transfer went through (which is guaranteed in a single business day nowadays; when I bought the first car it was still in the area of 2-3 days). As for the $1000 TV, I would probably pay that at an electronic payment terminal with a debit card. If buying from a retailer, that's usually the way to go, no matter how small.

nulbyte 7y ago

For larger transactions, ACH is becoming much more desireable. A bank I do business with currently offers originating next day ACH for $1 a transaction. When you add up the dollar cost of a stamp, check, and envelope, and the time expense of printing, mailing, and waiting for it to clear, ACH is highly affordable. I'm surprised taxing authorities still charge fees for getting paid faster when ACH is so cheap.