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I didn't really understand why there were so many banking startups in the US until I found out that simple bank transfers cost money over there.
by Nition 7y ago
I didn't really understand why there were so many banking startups in the US until I found out that simple bank transfers cost money over there.
- tylerhou 7y agoBank transfers of money generally don't cost money. They are just slow.
- Nition 7y agoOh, really? Last time this came up people were saying you couldn't send $50 to your friend's bank account without something crazy like a $15 fee, and hence everyone apparently used a third-party app like Venmo.
- patio11 7y agoThere are three relatively common ways to send money electronically between two US bank accounts: Zelle: effectively instant, requires both banks to be on the network, free. Relatively new and many people who could use it don’t. ACH: a few days, effectively ubiquitous, very small underlying charge infrequently marked up to ~$3 by the bank. Wire transfers: not quite instant but close during banking hours, effectively ubiquitous by institution but often a pain for retail users to access due to risk profile, underlying cost is about $5 and often marked up to $15~$20. The UX of the P2P payment apps is much, much better than any of the above, and would be what I’d reach for for a transfer in the $X0 range contingent on my counterparty being likely to use apps.
- raverbashing 7y agoRest of the world: looks like Zelle most of the time (some occasions it's +1 day) Banks in Europe: There might be a fee in some cases but I don't remember paying one (or it's <$5). Rent or similars are just recurring SEPA payments (it's a push - not a direct debt) But can people (not business) initiate ACH transactions?
- inferiorhuman 7y agoBut can people (not business) initiate ACH transactions? Yes. I used to do it to move money between checking accounts at different institutions. I don't think I've ever had an account that charged for ACH transfers. Meanwhile Zelle isn't supported by exactly one financial institution I use (but not one I use for banking).
- Nition 7y agoInteresting, thanks for the clarification.
- tylerhou 7y agoI've never been charged for ACH between bank accounts at different banks. https://www.mybanktracker.com/checking/faq/ach-transfer-fees-290332 https://www.mybanktracker.com/checking/faq/ach-transfer-fees...
- redis_mlc 7y agoNot even close. The banking startups are collecting account holder information so they can turn around and upsell you on credit cards and other products. But it gets better ... There is no such thing as a startup bank in the US because the government doesn't grant bank charters anymore. All those new companies aren't banks at all. They piggyback on top of an existing bank or the ACH network. That's why none of them say FDIC-approved, since they can't be part of FDIC.
- Nition 7y agoSure, but you need a reason for people to sign up in the first place, right? And if their current bank is already great they'd be less likely.
- smnrchrds 7y ago> government doesn't grant bank charters anymore Is this true? Why is this the case? How long has it been like this?
- steventhedev 7y agoNew banks are getting FDIC approval[0]. Latest one was approved last Friday. Perhaps you meant something else? [0]: https://www.fdic.gov/regulations/laws/bankdecisions/depins/index.html https://www.fdic.gov/regulations/laws/bankdecisions/depins/i...