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Transfers between banks are free in the US too (if you mean ACH transfers, Wires cost $30, but the only time I used a wire is paying the downpayment for my hous
by smsm42 5y ago
Transfers between banks are free in the US too (if you mean ACH transfers, Wires cost $30, but the only time I used a wire is paying the downpayment for my house). But setting up ACH link is both relatively complex and dangerous, since once it's set up, it can be used to move money in both directions indefinitely. Thus, not very useful for between-persons payments. Banks have other systems for such payments, but there are so many different ones that the chance random person has a bank with the system you know how to operate that is also supported by your bank is pretty low. Thus, Venmo. Paypal is easier to explain - they were born at the time banks and payment processors weren't really sure this whole internet thing is not a passing fad, so they didn't do anything. And now they have a huge incumbent advantage.
- salamandersauce 5y agoYes, but that's the point. For instance here in Canada we have Interac eTransfer which is supported by every bank. You go on your bank's app or website and you enter the email of the person you want to send money to and how much and a little password type thing and that's it. I don't need to know my friends bank info just their email. On the receiver side you just get an email and then you can pick what bank you want to deposit it in and log in as normal. And every bank has it for free these days (some used to have a $1 fee).