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It's a no-brainer. Card processing fees are just too high (2.9% + $0.3). Account transfers bring more flexibility and convenience and costs almost nothing.
by otar 5y ago
It's a no-brainer. Card processing fees are just too high (2.9% + $0.3).
Account transfers bring more flexibility and convenience and costs almost nothing.
- charlieyu1 5y agoIf it could work, it would have worked three decades ago. Bank transfers are just a pain in the ass. I still remember all the fees I paid just to transfer money to another bank/another country. Cryptocurrency was considered a way to simplify the problem, but probably didn’t work in this aspect
- rasz 5y agoUS? Bank transfers are couple clicks with zero fees in most of Europe.
- KennyBlanken 5y agoZelle payment transfers are painless, instantaneous, and free. I can do it from my bank's app or online banking page. Punch in the person's phone number or email, enter the amount, done. They don't even have to accept the payment. And nobody has to describe what the transaction was for; it's highly private, beyond who the money came from / went to and the amount. The caveat is that the money transfer cannot be undone for almost any reason. There's zero customer/purchase protection. The Consumer Financial Protection Bureau, however, has instructed banks that part of the Electronic Transfer Act requires banks to refund people if the transfer was a result of them being tricked into giving up their account details (it's not clear if this means the money would be yoinked from the recipient.) I kind of would like the option to enable some sort of confirmation and/or 2FA for a Zelle payment (mainly this means disabling it via the website; my phone provides bio 2FA), and confirmations for receiving a payment. Those are my only complaints with the system. But that means it can be trusted by people who want to know, for certain, that they've been paid "for real." It's instantly settled, unlike damn near every other form of money transfer system where even if the money seems to be in your account, there's still a days or WEEKS long delay until the transaction can't be yoinked back. This makes it great for if you're selling a car and about to sign & hand over the title to the other person, for example.
- baby 5y agoI’ve used Zelle for years to pay my rent and it’s a real pain because you’re limited to 2k a day. So I have to spread payments on multiple days (I live in SF). I miss Monzo.
- krinchan 5y agoIt’s crazy how much Zelle has taken off in my area. Home contractors. My barber. My family. Also the etiquette that’s emerged around using Zelle is funny too. If I’m paying someone new, they’ll normally have me send $1 as a test to make sure we all have the right contact info before sending the rest.
- lotsofpulp 5y agoThey should be able to request a payment instead of sending $1. If I go into Bank of America's app, I see "Send" "Request" and "Split" options. I do not see these options on BoA's website though, which is a dumb inconsistency.
- krinchan 5y agoYeah it’s pretty inconsistent. I can request money through USAA but my barber’s bank doesn’t let him request, so he does the whole “Send $1” dance.
- mrb 5y agoThe biggest problem with Zelle is the low limits. I cannot send more than $2500/month. One time I paid a contractor about this amount, and then, well, I couldn't use it for a WHOLE month until the limit reset itself... Very, very annoying. One of the many reasons I prefer crypto currencies. No one restricts me about what I can do with my money
- Symbiote 5y agoFor what it's worth, the limit on MobilePay in Denmark is 15,000DKK/day, $2300. Through the website, transfers with similar speed are limited to 1,000,000DKK a day ($150k). In person (showing identification at the bank) I don't think there's a limit. You will note the restrictions apply also to anyone who has successfully stolen your credentials, or is holding you at gunpoint, etc.
- jacquesm 5y agoI'm in the lucky situation that locally I can transfer instantaneously or nearly so across all of Europe and internationally I use bitcoin for recipients in places where banking fees are too high or the transfers too slow. It's a good combination.
- baby 5y agoWhy not a stablecoin with lower fees?
- jacquesm 5y agoBecause I'm more than a bit skeptical about all of the groups jumping on the 'lets mint our own coin' bandwagon. The number of stories of scam coins is large enough that I'll take my chances with Bitcoin for the moment and see which ones of the others survive over the longer term. I'm also a bit allergic to being marketed to in the name of the class of product, 'stable' has certain associations that I don't think apply to any of the crypto coins.
- baby 5y agoUsdt sure, although it’s working so far, but there’s plenty of legit stablecoin projects like usdc, or even paxos (which is what novi is using). Why isn’t stable applying to these coins?
- astrange 5y agoI sent $50 in USDC yesterday and was charged $9 in fees, not counting the coinbase USD<>USDC fee which I think existed since I used a debit card. Legit crypto users[1] should let you pay with TransferWise. [1] ie online research chemical stores
- baby 5y agoAh interesting, I guess USDC relies on Ethereum and so you're eating ETH's fees? I've never used USDC myself. I'm hearing Celo fees are around 1 cents. Wise is also a great solution, but its speed is going to be dependent on a lot of factors: does it have a partnership with your bank, how long is the route it'll take, and how long each node will take to process a transfer on the route. It is streamlined though so the user experience is top notch, security wise it's a centralized system so the more people use it the more it becomes a single point of failure.
- Silhouette 5y agoI don't know about three decades ago but this type of payment has been ubiquitous in the UK for at least two in the form of Direct Debit and widespread across Europe for years now via SEPA. It is not just much cheaper than card payments, it is also dramatically more reliable. If you lived in a parallel universe where all of these payment methods had emerged at once and you described a payment method so unreliable that people would actually give a name to the hack of retrying each failed charge automatically, they would think you were joking. Ironically, despite in theory having a more generous reversal policy to protect consumers from fraud, these direct payment methods are also much less likely to result in inappropriate reversals that harm legitimate merchants, at least in our experience. Perhaps this is because banks will typically only reverse in cases of real fraud whereas card chargebacks are widely abused to commit fraud themselves or applied inappropriately as a blanket measure after an event like a stolen or lost card, and the incentives favour granting the refunds even if the customer just says for the flimsiest of reasons that they want their money back.
- thelittleone 5y agoThis seems out of touch with modern offerings e.g. wise.com. Easier than PayPal with none of the crazy bank transfer fees.
- TedDoesntTalk 5y agoWise fees are still too high for international transfers. They are doing currency arbitrage to sweeten the deal they get.
- blntechie 5y agoWise is too slow (especially for transactions involving the US) and still expensive.
- yashg 5y agoIndia, a third world country has worked it out. Apart from UPI, we have other bank transfer mechanism that doesn't involve writing a check. There's RTGS (Real Time Gross Settlement) for large payments. It's what we use when we buy property or do large business transactions. There's NEFT (National Electronic Fund Transfer) for instant transfers upto INR 500K. There's IMPS (The underlying mechanism of UPI) for instant transfers upto INR 100K. Intra-bank transfers are always free and instant because bank is just changing numbers on two accounts in the same database. It has been so easy to move money between banks in India that we don't even think about it. A decentralized system like crypto which uses pointless proof-of-work to remove trust providing intermediaries are just too slow, expensive and overall inefficient by design. They won't work in real world.
- baby 5y ago1. India is a single country, cryptocurrencies are global 2. Nobody uses proof of work anymore (besides bitcoin)
- purple_turtle 5y ago> 2. Nobody uses proof of work anymore (besides bitcoin) And Ethereum and...
- baby 5y agoTrue, but Ethereum is moving away from it. If we're talking about modern cryptocurrencies, what's the point of including Bitcoin and Ethereum in discussions?
- cbg0 5y agoYou can probably get a volume discount on that 2.9% in the US. In Europe, Stripe starts at 1.4% + $0.3 for charging European cards.
- justincormack 5y agoThats because the EU regulates fees.
- ericcholis 5y agoYou can DEFIANTLY get a volume discount from any credit card processor based on volume. Typical large merchants are paying Interchange Plus at a much lower rate than what's listed on Stripe or Square. Interchange is the rate paid directly to the card issuer and Visa/MC. Plus is paid to the merchant account (Stripe). The actual itemized fees inside of that Interchange fee are mind boggling.
- emodendroket 5y agoWell, are they really though? Sales taxes are more than twice that where I live, and anyway I don't have to pay it directly.
- m_km 5y agoIndian here. One thing you should remember is that UPI is free (so far) because it is not a 'Credit' product yet. With a credit card, someone is giving you a loan for x days and there are costs associated with it - interest rates, default rates, etc. Of the 2.9% that Stripe (or any other processor) charges, a majority of the fee goes to the credit card issuer, i.e. bank. You probably chose to use a particular credit card because of the rewards offered by that particular bank. So, practically, a majority of the 2.9% fees goes to the issuing bank and a major portion is returned as rewards to the credit card user, i.e. the payer. Since the merchant, i.e. the seller, probably raised the prices by ~3% in order to afford the processing fees and credit card users get back most of it in rewards, people that use any other mode of payment end-up paying extra for the same product practically. 'Credit' cards are going to cost money for the foreseeable future. Issuing banks charge anywhere from 1.8% to 3% or higher for processing credit their cards. Processors add a markup on top of this fees to their merchants. 'Debit' cards issued by the major banks on the other hand, cost less than 0.5% for the processors. Stripe charges 2.9% for both debit as well as credit cards, YES but their costs to them are not the same.