10 ms·

The Long Shadow of Checks

120 points by zepton 3y ago

peter_l_downs 3y ago
> One control which we made for checks to reduce systemic risk continues to have consequences more than a century later. Most disagreements between you and a grocery store are beneath the notice of the law. If you and your grocery store have a disagreement about a check specifically, you can go to jail. The crime is sometimes called “uttering”, for charming historical reasons. patio11: you write a lot, and have taught me a lot, and I appreciate it. But I want to make a small complaint. You frequently say things like "for charming historical reasons" and then _cite no sources_. Link something! Cite something! As a reader, I regularly feel like you are teasing me or showing off to me when you include all these small asides without any further reference or any concrete details.
- r2_pilot 3y ago
  It's actually kind of boring in this case, per Wikipedia: "In law, uttering is synonymous with publication, and the distinction made between the common law offences was that forgery was the fabrication of a forged instrument (with the intent to defraud) and uttering was the publication of that instrument (with the intent to defraud)."
  - peter_l_downs 3y ago
    The distinction is a fact, but I haven't been able to find the _reason_ for the distinction, which I'm hoping is quite charming!
    - stvltvs 3y ago
      My guess is that it allows the prosecution of both the forger and the one who uses the forgery, the utterer I suppose, in cases where they are different individuals.
  - dmurray 3y ago
    My passport says something like "to alter this instrument, or to utter it so altered, is an offence". This always read strangely to me - it's an offence to have a real passport, but claim it's a fake? But this definition of "utter" makes it work - it's a crime both to falsify the passport, and to attempt to travel with one that has been falsified.
- otteromkram 3y ago
  He doesn't always leave some footwork up to the reader. Take this passage, for example, where the term "Clearing" is expanded upon: > The UCC facilitated banks clearing each others’ checks. (“Clearing” is a magic finance word. Clearing a check refers to completing the process which the check agrees to: the writer sees money leave their account and the person depositing the check sees it enter theirs. This is much more complicated than it sounds in this quick gloss.)
- spelunker 3y ago
  Also, is there a particular reason he uses obscure words like "infelicity"? I'm a native English speaker and I think that is the first time I've heard that word used. Is it really that hard to just use "misfortune"?
  - Klonoar 3y ago
    There are more than a few people who value what he writes but find the overall "winding path" of style to be very grating to read.
    - Keegs 3y ago
      I know it’s not the case but sometimes it feels like he’s trying to channel Matt Levine. Doesn’t matter, like you said his blog and now newsletter are fantastic.
      - robocat 3y ago
        Levine consistently makes the most boring subject interesting: and I don't find it obvious how he does it. Certainly some of his subject matter is truly turgid (even Matt fails to make me interested in Musk's antics).
    - Proziam 3y ago
      I am one such person. I have no issue reading obscure or difficult content (legal documents ala Companies Act 2006 to historical documents written in non-native languages). However, for me, his particular style forces me to read many things twice or thrice to determine whether or not I've understood him correctly. Despite that, I still get a lot from his writing.
    - bloaf 3y ago
      This is like criticizing someone's technical ability after they finished a Bob Ross painting course. The point was joyful self-expression. You can go make your own painting with no happy little trees if you want.
- coldtea 3y ago
  I really dislike this obsession with citations, as if every post is meant as a paper for a journal. I even dislike it in scientific papers (especially in the humanities, where most of the time it just lends false credibility "see, someone else said this too", and in some cases a paragraph ends up like a mashup of 5-6 excepts cited from others, complete with a footnote mark). If we're interested in such a trivial matter as to why the crime was called "uttering" one can always look it up.
  - peter_l_downs 3y ago
    I looked it up and could not find the answer.
e63f67dd-065b 3y ago
I'm continually surprised by the political influence held by the thousands of tiny banks in the country. I must applaud the people behind the Check 21 Act: it's the combination of a neat backwards compatibility trick (if you want paper, we'll print it and send it to you) and political maneuvering that I must admire it. > Since the standard U.S. bank account is a checking account, even if it cannot write checks, it is necessarily a credit product. Why is this the case? Checking accounts without the ability to overdraft and thus create credit risk exist; I've always wondered why they're not more widespread. Is it a problem that people who are Chex blacklisted are unprofitable anyways?
- davidw 3y ago
  > political influence held by the thousands of tiny banks in the country Car dealerships are pretty bad too.
- telotortium 3y ago
  Even without the bank giving the check writer the privilege of overdrafting, either the bank or the check recipient has to absorb the loss if they accept a check for which the check writer has insufficient funds (unless the bank goes after the check writer). By contrast, with a debit card, the credit risk is much less (since the bank knows before the transaction whether sufficient funds are available).
  - lxgr 3y ago
    That doesn't make a checking account (especially one without check writing) a "credit product" though, no? If anything, anybody accepting a check for payment and delivering goods/services before it clears is extending credit in a way, but that has less to do with the bank account and more with pre- vs. post-payment for goods/services.
- digging 3y ago
  > I've always wondered why they're not more widespread Historically, it's a major source of revenue for banks[1]. I used to use BOA, when I switched to a local credit union they at least offered me the choice of "overdraft protection," which obviously I declined. Fortunately, overdraft fees appear to be growing less profitable[2], so hopefully banks will phase them out. [1] https://www.consumerfinance.gov/about-us/newsroom/cfpb-research-shows-banks-deep-dependence-on-overdraft-fees/ https://www.consumerfinance.gov/about-us/newsroom/cfpb-resea... [2] https://www.consumerfinance.gov/data-research/research-reports/banks-overdraft-nsf-fee-revenue-declines-significantly-compared-to-pre-pandemic-levels/ https://www.consumerfinance.gov/data-research/research-repor...
stevenjgarner 3y ago
> “Clearing” is a magic finance word. Clearing a check refers to completing the process which the check agrees to: the writer sees money leave their account and the person depositing the check sees it enter theirs. This is much more complicated than it sounds in this quick gloss. Just because the writer of the check sees the funds of their check leave their account, this does not mean the recipient of the check has collected those funds. At any given moment, there is a considerable amount of money belonging either to check writers or recipients, not under their control yet being invested in overnight investments and repurchase agreements for the profit of the bank(s) involved. This becomes quite exaggerated when you think of the time zones involved and the fact that the resolution of the clearing houses is greater than or equal to 24 hours. So a check from an account in Puerto Rico to an account in Hawaii will take a minimum of 24 + 6 hours = 30 hours for the bank(s) to get a return on their customer funds. As the article points out, the "clearing" of funds to the recipient's account is an act of credit and not an act of money transfer.
- gosub100 3y ago
  For many years it was one of the entry-level jobs for pilots. "check runners" were essentially overnight couriers that would fly everywhere, even to rural areas, collect bags of checks and take them to major branches where they were cleared. I remember an article, probably from 20 years ago, warning people that the check infrastructure was about to change and people who were "floating" checks for 2-3 days (relying on this behavior) weren't going to be able to rely on it any more. I think that was when they went to electronic scanning at the bank itself.
- ska 3y ago
  This is also why you can end up with an extended hold on a deposited check. Consider for example personal check issued between banks in two countries. There may not be a formal complete resolution process, so funds are released to you only after your bank is reasonably certain that the other bank is going to honor it, or more likely, not going to ask for it back.
secabeen 3y ago
The compelling thing for me still with checks is that the banks take on nearly all the costs of processing them, and what costs are imposed on the customer are fixed, and do not scale with the amount of money being transferred. It's possible to do fixed-cost transfers using other systems (PayPal, Venmo, etc.) but it always feels like those transfers are only tolerated, and they really want to push you to their other offerings where they can get their vig.
- drsopp 3y ago
  > the banks take on nearly all the costs of processing them Not for me. I live in Norway. I suddenly became an absent party of a class action lawsuit in the USA. The settlement came in the form of a check. A small amount, maybe around $50. But the cost of cashing it in Norway was more than the value!
  - astrange 3y ago
    You could sell a picture of it to someone in the US.
    - drsopp 3y ago
      Don't you need an ID matching the payee to cash it? Anyway, it's expired now.
      - toast0 3y ago
        If you cash it, maybe. If it's deposited, probably not. Especially for a small dollar value. When did it expire? Depending on the terms of the settlement, they may have forwarded it to a state's unclaimed property office... It's probably not worth your trouble for $50, but maybe you can still get it back.
Scubabear68 3y ago
This started out as a good narrative on the history of checks, but quickly devolved into a political rant about poor people being victims of banks, and no real criminals write bad checks. The first is true, but the second is not. Check fraud was a very big deal for years for criminals. I don’t know if it is anymore given the progress in electronic payments.
- timdev2 3y ago
  I don't think that's a fair reading. At most, the piece describes a common political rant, and then says "Phrased that way, it sounds almost fantastically unjust. And… it’s complicated." Your comment, in contrast, strikes me as being much closer to a reflexive political rant than the essay.
  - Scubabear68 3y ago
    Actually my focus was less on poor people and more on the incorrect assumption in the article that true check fraud was non existent.
    - timdev2 3y ago
      The article does acknowledge the existence of real fraud. It distinguishes it from honest errors. It goes on to point out that sometimes institutions (financial and state) sometimes fail to adequately distinguish the two. Maybe it could have included more on bona fide fraud. But it doesn't contain an assumption that true check fraud is non existent. And it certainly doesn't devolve into any sort of rant.
    - 8note 3y ago
      A rhetorical technique you should use is to put your most important point first. You can go even further and not include the parts of the review you don't think are important As a change > The article downplays the historical impacts of cheque fraud, which were resolved by electronic payments, see source[0] for more details
reaperducer 3y ago
The longer you live, and the more things you do, the more you realize that checks are still alive and well. You still need checks for: Charitable donations - Many charities maximize every penny, and electronic contributions eat into that. Paying my accountant - Good accountants make every penny count, and aren't interested in tithing from their revenue to credit card companies. Tipping the paper boy Tipping the doorman (Though recently, I've switched to cash for this, as it looks better in a Christmas card) Business license renewal in certain cities Some of my recent real estate transactions have required checks to be written to various local authorities, county clerks, etc. Making IRS payments without a fee Paying the gas bill. My gas company charges $5+ to pay by credit or debit card. Paying the rent. My building's management company charges $20 + a percentage to pay by debit card, or $50 + a percentage to pay by credit card. If I pay my bill with a check, there's no surcharge. If I pay by credit card, I have to pay another $113. Paying the electric bill. The electric company charges $5+ to pay by credit or debit card. Passport renewal fee. Renewing a passport by mail in the United States *requires* a check or a money order.
- w3ll_w3ll_w3ll 3y ago
  I don't undertand why there is not a better alternative in US, like a bank transfer/wire. In the EU, these transfers are often free at most banks, or at most, they incur a fee of 1 or 2 euros.
  - reaperducer 3y ago
    I guess the opposite could also be asked: Why doesn't the EU use something proven, durable, redundant, and sensible like checks instead of relying on fragile computers that have thousands more points of failure?
    - IshKebab 3y ago
      Because cheques are unreliable, insecure, slow, inconvenient and expensive, and electronic bank transfers solve literally all of those issues. What kind of a stupid question is that? Do you think cheques are not processed by computers?
dqv 3y ago
It's interesting to see this discussion about speeding up check processing, because it seems that a lot of people use checks to slow payments down. It's a convenient way to make it inconvenient for the receiving party! It works like this: receive invoice, wait until due date, write a check dated for the due date, wait a few days, send it through regular mail, and complain about the past due notices because "I've already sent the payment!! Did you lose it or something?" Applying late fees doesn't work either, they'll just send a late payment again without the late fee included. At first, I genuinely thought it was because they preferred checks for record keeping purposes, but when I set up echeck and told them how they just need to call us and give us the check number to pay. Or they can just enter their information at our payment processor's portal. Nope! It's "insecure" (Sir/Madam, you're sending me a piece of paper with your bank account and routing number and it's going through the mailing system where mail gets lost...). For that same reason, they don't want to pay with a card either. That's why the cost of paying the transaction fees for card processing is so worth it to me. I got the check scanner years before the COVID lockdowns to speed things up, but nothing beats the sometimes instant card settlement deposits. I still accept checks from responsible, timely payors, but stop doing business with anyone who has a pattern of paying late with checks. It's not worth the additional work to get them to pay (there's truly no way to know what their intent is - are their lateness predictable or is this the month they're going to wait 45 days to pay?). I'm fine with letting someone else wait for them to pay late. One thing that still seems to be missing from bank cards is the lack of ability to add your own identifier (namely the check number) to the transaction at time of payment. I understand that, for responsible payors, this is why they might prefer paying with checks - you not only get a reference number, a memo line, and a date that makes sense for your own internal system. Even with bank cards, the date of the transaction is sometimes not the date that it actually happened, which can be confusing for record association. Zelle has a memo entry, but the reference identifiers are letters and numbers, ew. An internal auto incrementing number to identify transactions would be really useful. Anyway, hopefully paper checks will be phased out. Although I do still find them useful for interbank account transfers - the Zelle multi-account trick still makes me kind of queasy.
- Arrath 3y ago
  > It works like this: receive invoice, wait until due date, write a check dated for the due date, wait a few days, send it through regular mail, and complain about the past due notices because "I've already sent the payment!! Did you lose it or something?" Applying late fees doesn't work either, they'll just send a late payment again without the late fee included. This certainly seems to be the standard accounting practice at most contractor's I've worked for. Including choice tidbits like "We know the due date was Thursday, but the only person our JV agreement allows to sign checks is out until next Tuesday, so your check will be on that run."
sneed_chucker 3y ago
Honestly, I just hate how insecure and legacy everything involving banking in this country is. For example, payroll - there's literally no reason your employer needs to store your account and routing number as another piece of your personal info that they can lose when some hacker finds out their MySQL admin password is "admin" Like, the system should be that you give your employer your banks name, plus a UUID associated with your account that allows entitys to deposit but not withdraw funds for you account. It would be trivial to implement and make things much more secure, but instead we're stuck with the account+routing number system that's basically paper checks but put on a computer.
- paulddraper 3y ago
  And most utility/etc bills will require ACH (or a payment fee). So now Bob's Valley Energy Inc has the information to empty your account. --- (Though FWIW, probably neither your employer nor your utility company is storing the information themselves in a MySQL db.)
  - lxgr 3y ago
    But if they do, can't you just call your bank and ask for the ACH debit to be reversed? I've never had to actually do this myself, but as far as I understand, there's a process for that just like for credit card chargebacks, and a legal requirement to do so within 10 days of reporting the problem to your bank. Of course being out the money for 10 days is not pleasant; I also do wish there were ways to limit ACH payments a bit more proactively.
- clintonb 3y ago
  > It would be trivial to implement and make things much more secure… If it were truly trivial, this would have been implemented long ago. This isn’t a pure engineering problem as much as it’s a “convincing people to do it” problem.
  - tjader 3y ago
    It is implemented in most of the world outside of the US. It is scary that the info you need to deposit funds into an account in the US also allows you to withdraw funds from it.
ChrisMarshallNY 3y ago
I remember watching a show, which said that the Knights Templar actually ran one of the oldest banks, and "checks," were scripts that they wrote in France (or wherever the Crusader started from), to be delivered in Jerusalem, so the Crusader could get his money, there.
somewhereoutth 3y ago
[flagged]
pseingatl 3y ago
Amazing to me that he could write this history and not once refer to the golden status of "holder in due course."

120 points by zepton 3y ago

> One control which we made for checks to reduce systemic risk continues to have consequences more than a century later. Most disagreements between you and a grocery store are beneath the notice of the law. If you and your grocery store have a disagreement about a check specifically, you can go to jail. The crime is sometimes called “uttering”, for charming historical reasons. patio11: you write a lot, and have taught me a lot, and I appreciate it. But I want to make a small complaint. You frequently say things like "for charming historical reasons" and then _cite no sources_. Link something! Cite something! As a reader, I regularly feel like you are teasing me or showing off to me when you include all these small asides without any further reference or any concrete details.

r2_pilot 3y ago
It's actually kind of boring in this case, per Wikipedia: "In law, uttering is synonymous with publication, and the distinction made between the common law offences was that forgery was the fabrication of a forged instrument (with the intent to defraud) and uttering was the publication of that instrument (with the intent to defraud)."
- peter_l_downs 3y ago
  The distinction is a fact, but I haven't been able to find the _reason_ for the distinction, which I'm hoping is quite charming!
  - stvltvs 3y ago
    My guess is that it allows the prosecution of both the forger and the one who uses the forgery, the utterer I suppose, in cases where they are different individuals.
- dmurray 3y ago
  My passport says something like "to alter this instrument, or to utter it so altered, is an offence". This always read strangely to me - it's an offence to have a real passport, but claim it's a fake? But this definition of "utter" makes it work - it's a crime both to falsify the passport, and to attempt to travel with one that has been falsified.
otteromkram 3y ago
He doesn't always leave some footwork up to the reader. Take this passage, for example, where the term "Clearing" is expanded upon: > The UCC facilitated banks clearing each others’ checks. (“Clearing” is a magic finance word. Clearing a check refers to completing the process which the check agrees to: the writer sees money leave their account and the person depositing the check sees it enter theirs. This is much more complicated than it sounds in this quick gloss.)
spelunker 3y ago
Also, is there a particular reason he uses obscure words like "infelicity"? I'm a native English speaker and I think that is the first time I've heard that word used. Is it really that hard to just use "misfortune"?
- Klonoar 3y ago
  There are more than a few people who value what he writes but find the overall "winding path" of style to be very grating to read.
  - Keegs 3y ago
    I know it’s not the case but sometimes it feels like he’s trying to channel Matt Levine. Doesn’t matter, like you said his blog and now newsletter are fantastic.
    - robocat 3y ago
      Levine consistently makes the most boring subject interesting: and I don't find it obvious how he does it. Certainly some of his subject matter is truly turgid (even Matt fails to make me interested in Musk's antics).
  - Proziam 3y ago
    I am one such person. I have no issue reading obscure or difficult content (legal documents ala Companies Act 2006 to historical documents written in non-native languages). However, for me, his particular style forces me to read many things twice or thrice to determine whether or not I've understood him correctly. Despite that, I still get a lot from his writing.
  - bloaf 3y ago
    This is like criticizing someone's technical ability after they finished a Bob Ross painting course. The point was joyful self-expression. You can go make your own painting with no happy little trees if you want.
coldtea 3y ago
I really dislike this obsession with citations, as if every post is meant as a paper for a journal. I even dislike it in scientific papers (especially in the humanities, where most of the time it just lends false credibility "see, someone else said this too", and in some cases a paragraph ends up like a mashup of 5-6 excepts cited from others, complete with a footnote mark). If we're interested in such a trivial matter as to why the crime was called "uttering" one can always look it up.
- peter_l_downs 3y ago
  I looked it up and could not find the answer.

e63f67dd-065b 3y ago

I'm continually surprised by the political influence held by the thousands of tiny banks in the country. I must applaud the people behind the Check 21 Act: it's the combination of a neat backwards compatibility trick (if you want paper, we'll print it and send it to you) and political maneuvering that I must admire it. > Since the standard U.S. bank account is a checking account, even if it cannot write checks, it is necessarily a credit product. Why is this the case? Checking accounts without the ability to overdraft and thus create credit risk exist; I've always wondered why they're not more widespread. Is it a problem that people who are Chex blacklisted are unprofitable anyways?

davidw 3y ago
> political influence held by the thousands of tiny banks in the country Car dealerships are pretty bad too.
telotortium 3y ago
Even without the bank giving the check writer the privilege of overdrafting, either the bank or the check recipient has to absorb the loss if they accept a check for which the check writer has insufficient funds (unless the bank goes after the check writer). By contrast, with a debit card, the credit risk is much less (since the bank knows before the transaction whether sufficient funds are available).
- lxgr 3y ago
  That doesn't make a checking account (especially one without check writing) a "credit product" though, no? If anything, anybody accepting a check for payment and delivering goods/services before it clears is extending credit in a way, but that has less to do with the bank account and more with pre- vs. post-payment for goods/services.
digging 3y ago
> I've always wondered why they're not more widespread Historically, it's a major source of revenue for banks[1]. I used to use BOA, when I switched to a local credit union they at least offered me the choice of "overdraft protection," which obviously I declined. Fortunately, overdraft fees appear to be growing less profitable[2], so hopefully banks will phase them out. [1] https://www.consumerfinance.gov/about-us/newsroom/cfpb-research-shows-banks-deep-dependence-on-overdraft-fees/ https://www.consumerfinance.gov/about-us/newsroom/cfpb-resea... [2] https://www.consumerfinance.gov/data-research/research-reports/banks-overdraft-nsf-fee-revenue-declines-significantly-compared-to-pre-pandemic-levels/ https://www.consumerfinance.gov/data-research/research-repor...

stevenjgarner 3y ago

> “Clearing” is a magic finance word. Clearing a check refers to completing the process which the check agrees to: the writer sees money leave their account and the person depositing the check sees it enter theirs. This is much more complicated than it sounds in this quick gloss. Just because the writer of the check sees the funds of their check leave their account, this does not mean the recipient of the check has collected those funds. At any given moment, there is a considerable amount of money belonging either to check writers or recipients, not under their control yet being invested in overnight investments and repurchase agreements for the profit of the bank(s) involved. This becomes quite exaggerated when you think of the time zones involved and the fact that the resolution of the clearing houses is greater than or equal to 24 hours. So a check from an account in Puerto Rico to an account in Hawaii will take a minimum of 24 + 6 hours = 30 hours for the bank(s) to get a return on their customer funds. As the article points out, the "clearing" of funds to the recipient's account is an act of credit and not an act of money transfer.

gosub100 3y ago
For many years it was one of the entry-level jobs for pilots. "check runners" were essentially overnight couriers that would fly everywhere, even to rural areas, collect bags of checks and take them to major branches where they were cleared. I remember an article, probably from 20 years ago, warning people that the check infrastructure was about to change and people who were "floating" checks for 2-3 days (relying on this behavior) weren't going to be able to rely on it any more. I think that was when they went to electronic scanning at the bank itself.
ska 3y ago
This is also why you can end up with an extended hold on a deposited check. Consider for example personal check issued between banks in two countries. There may not be a formal complete resolution process, so funds are released to you only after your bank is reasonably certain that the other bank is going to honor it, or more likely, not going to ask for it back.

secabeen 3y ago

The compelling thing for me still with checks is that the banks take on nearly all the costs of processing them, and what costs are imposed on the customer are fixed, and do not scale with the amount of money being transferred. It's possible to do fixed-cost transfers using other systems (PayPal, Venmo, etc.) but it always feels like those transfers are only tolerated, and they really want to push you to their other offerings where they can get their vig.

drsopp 3y ago
> the banks take on nearly all the costs of processing them Not for me. I live in Norway. I suddenly became an absent party of a class action lawsuit in the USA. The settlement came in the form of a check. A small amount, maybe around $50. But the cost of cashing it in Norway was more than the value!
- astrange 3y ago
  You could sell a picture of it to someone in the US.
  - drsopp 3y ago
    Don't you need an ID matching the payee to cash it? Anyway, it's expired now.
    - toast0 3y ago
      If you cash it, maybe. If it's deposited, probably not. Especially for a small dollar value. When did it expire? Depending on the terms of the settlement, they may have forwarded it to a state's unclaimed property office... It's probably not worth your trouble for $50, but maybe you can still get it back.

Scubabear68 3y ago

This started out as a good narrative on the history of checks, but quickly devolved into a political rant about poor people being victims of banks, and no real criminals write bad checks. The first is true, but the second is not. Check fraud was a very big deal for years for criminals. I don’t know if it is anymore given the progress in electronic payments.

timdev2 3y ago
I don't think that's a fair reading. At most, the piece describes a common political rant, and then says "Phrased that way, it sounds almost fantastically unjust. And… it’s complicated." Your comment, in contrast, strikes me as being much closer to a reflexive political rant than the essay.
- Scubabear68 3y ago
  Actually my focus was less on poor people and more on the incorrect assumption in the article that true check fraud was non existent.
  - timdev2 3y ago
    The article does acknowledge the existence of real fraud. It distinguishes it from honest errors. It goes on to point out that sometimes institutions (financial and state) sometimes fail to adequately distinguish the two. Maybe it could have included more on bona fide fraud. But it doesn't contain an assumption that true check fraud is non existent. And it certainly doesn't devolve into any sort of rant.
  - 8note 3y ago
    A rhetorical technique you should use is to put your most important point first. You can go even further and not include the parts of the review you don't think are important As a change > The article downplays the historical impacts of cheque fraud, which were resolved by electronic payments, see source[0] for more details

reaperducer 3y ago

The longer you live, and the more things you do, the more you realize that checks are still alive and well. You still need checks for: Charitable donations - Many charities maximize every penny, and electronic contributions eat into that. Paying my accountant - Good accountants make every penny count, and aren't interested in tithing from their revenue to credit card companies. Tipping the paper boy Tipping the doorman (Though recently, I've switched to cash for this, as it looks better in a Christmas card) Business license renewal in certain cities Some of my recent real estate transactions have required checks to be written to various local authorities, county clerks, etc. Making IRS payments without a fee Paying the gas bill. My gas company charges $5+ to pay by credit or debit card. Paying the rent. My building's management company charges $20 + a percentage to pay by debit card, or $50 + a percentage to pay by credit card. If I pay my bill with a check, there's no surcharge. If I pay by credit card, I have to pay another $113. Paying the electric bill. The electric company charges $5+ to pay by credit or debit card. Passport renewal fee. Renewing a passport by mail in the United States *requires* a check or a money order.

w3ll_w3ll_w3ll 3y ago
I don't undertand why there is not a better alternative in US, like a bank transfer/wire. In the EU, these transfers are often free at most banks, or at most, they incur a fee of 1 or 2 euros.
- reaperducer 3y ago
  I guess the opposite could also be asked: Why doesn't the EU use something proven, durable, redundant, and sensible like checks instead of relying on fragile computers that have thousands more points of failure?
  - IshKebab 3y ago
    Because cheques are unreliable, insecure, slow, inconvenient and expensive, and electronic bank transfers solve literally all of those issues. What kind of a stupid question is that? Do you think cheques are not processed by computers?

dqv 3y ago

It's interesting to see this discussion about speeding up check processing, because it seems that a lot of people use checks to slow payments down. It's a convenient way to make it inconvenient for the receiving party! It works like this: receive invoice, wait until due date, write a check dated for the due date, wait a few days, send it through regular mail, and complain about the past due notices because "I've already sent the payment!! Did you lose it or something?" Applying late fees doesn't work either, they'll just send a late payment again without the late fee included. At first, I genuinely thought it was because they preferred checks for record keeping purposes, but when I set up echeck and told them how they just need to call us and give us the check number to pay. Or they can just enter their information at our payment processor's portal. Nope! It's "insecure" (Sir/Madam, you're sending me a piece of paper with your bank account and routing number and it's going through the mailing system where mail gets lost...). For that same reason, they don't want to pay with a card either. That's why the cost of paying the transaction fees for card processing is so worth it to me. I got the check scanner years before the COVID lockdowns to speed things up, but nothing beats the sometimes instant card settlement deposits. I still accept checks from responsible, timely payors, but stop doing business with anyone who has a pattern of paying late with checks. It's not worth the additional work to get them to pay (there's truly no way to know what their intent is - are their lateness predictable or is this the month they're going to wait 45 days to pay?). I'm fine with letting someone else wait for them to pay late. One thing that still seems to be missing from bank cards is the lack of ability to add your own identifier (namely the check number) to the transaction at time of payment. I understand that, for responsible payors, this is why they might prefer paying with checks - you not only get a reference number, a memo line, and a date that makes sense for your own internal system. Even with bank cards, the date of the transaction is sometimes not the date that it actually happened, which can be confusing for record association. Zelle has a memo entry, but the reference identifiers are letters and numbers, ew. An internal auto incrementing number to identify transactions would be really useful. Anyway, hopefully paper checks will be phased out. Although I do still find them useful for interbank account transfers - the Zelle multi-account trick still makes me kind of queasy.

Arrath 3y ago
> It works like this: receive invoice, wait until due date, write a check dated for the due date, wait a few days, send it through regular mail, and complain about the past due notices because "I've already sent the payment!! Did you lose it or something?" Applying late fees doesn't work either, they'll just send a late payment again without the late fee included. This certainly seems to be the standard accounting practice at most contractor's I've worked for. Including choice tidbits like "We know the due date was Thursday, but the only person our JV agreement allows to sign checks is out until next Tuesday, so your check will be on that run."

sneed_chucker 3y ago

Honestly, I just hate how insecure and legacy everything involving banking in this country is. For example, payroll - there's literally no reason your employer needs to store your account and routing number as another piece of your personal info that they can lose when some hacker finds out their MySQL admin password is "admin" Like, the system should be that you give your employer your banks name, plus a UUID associated with your account that allows entitys to deposit but not withdraw funds for you account. It would be trivial to implement and make things much more secure, but instead we're stuck with the account+routing number system that's basically paper checks but put on a computer.

paulddraper 3y ago
And most utility/etc bills will require ACH (or a payment fee). So now Bob's Valley Energy Inc has the information to empty your account. --- (Though FWIW, probably neither your employer nor your utility company is storing the information themselves in a MySQL db.)
- lxgr 3y ago
  But if they do, can't you just call your bank and ask for the ACH debit to be reversed? I've never had to actually do this myself, but as far as I understand, there's a process for that just like for credit card chargebacks, and a legal requirement to do so within 10 days of reporting the problem to your bank. Of course being out the money for 10 days is not pleasant; I also do wish there were ways to limit ACH payments a bit more proactively.
clintonb 3y ago
> It would be trivial to implement and make things much more secure… If it were truly trivial, this would have been implemented long ago. This isn’t a pure engineering problem as much as it’s a “convincing people to do it” problem.
- tjader 3y ago
  It is implemented in most of the world outside of the US. It is scary that the info you need to deposit funds into an account in the US also allows you to withdraw funds from it.

ChrisMarshallNY 3y ago

I remember watching a show, which said that the Knights Templar actually ran one of the oldest banks, and "checks," were scripts that they wrote in France (or wherever the Crusader started from), to be delivered in Jerusalem, so the Crusader could get his money, there.

somewhereoutth 3y ago

[flagged]

pseingatl 3y ago

Amazing to me that he could write this history and not once refer to the golden status of "holder in due course."