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Checks also let you do fairly complex multiparty commerce without needing to spend millions of dollars engineering it, like an apartment broker requiring you to
by patio11 3y ago
Checks also let you do fairly complex multiparty commerce without needing to spend millions of dollars engineering it, like an apartment broker requiring you to give them a check for deposit/first month’s rent and signed lease prior to releasing the keys to you. Note that the check is to the landlord and the broker cannot access her accounts, but visual inspection of a check plus the previous underwriting lets this work without needing to loop landlord in again (in real time) to release keys.
- lotsofpulp 3y agoThe broker and landlord have no idea if the money exists just because they get a paper check. Seems like a far worse guarantee than simply transferring the money electronically and the landlord having instant assurance they received it.
- Dalewyn 3y agoIf the recipient of a check wants assurance that there is actual money behind the check, they should demand a cashier's check for reasons I already iterated.
- lotsofpulp 3y agoWhich is more likely: Receiving a fake cashier’s check, or the opposing party hacking into your bank and showing a transaction that will disappear? Regardless of how unlikely the fake cashier’s check is, a fraudulent electrinic money transfer is still more unlikely. And the electronic transfer is cheaper (free). And less work for everyone.
- stanleydrew 3y agoI think you may be misinformed about "electronic money transfer" at least in the United States. As far as I know the only way to execute an immediately-settled electronic transfer is a wire transfer, which is inaccessible to lots of people and has an associated fee for nearly everyone else.
- culturestate 3y agoI was under the impression that immediately-settled electronic transfers were Zelle’s raison d'être. I understand that it’s not universally available, but still.
- oasisbob 3y agoYou're not using "immediately settled" in the same way as the parent. Zelle transactions are subject to reversion or cancellation ... for days? Compare to, say, settlement cycles in SWIFT: https://www.swift.com/news-events/news/preparing-t1-global-impact-north-americas-move https://www.swift.com/news-events/news/preparing-t1-global-i...
- culturestate 3y agoI'm using "settled" in the colloquial "the money has been debited from the sender's account and has been credited to the receiver's account" sense, which for the purposes of this discussion is the definition that really matters. You can't just unilaterally reverse a Zelle payment any more than you can a SEPA transfer.
- stanleydrew 3y agoMy understanding is that Zelle transfers are just settled by ACH under the hood, which is the same system that settles checks. However there is possibly some new "real-time payment" feature of the ACH network that could be equivalent to wire settlement, but I'm not sure Zelle actually uses it.
- culturestate 3y agoAs far as I know Zelle prefers RTP[1] for settlements and falls back to ACH only when necessary, but I'm sure there's a Zelle employee on here who can confirm one way or the other. There's also FedNow[2] but I don't know of any retail implementations yet. 1. https://www.theclearinghouse.org/payment-systems/rtp https://www.theclearinghouse.org/payment-systems/rtp 2. https://www.frbservices.org/financial-services/fednow https://www.frbservices.org/financial-services/fednow
- pc86 3y agoLess work for everyone if there is infrastructure for this transfer to occur, which doesn't exist in the US. So kind of a moot point.
- lotsofpulp 3y agoThere is, Zelle. And I was under the impression the conversation was not specific to the US, but rather about checks as method of payment in general.
- culturestate 3y ago> Checks also let you do fairly complex multiparty commerce without needing to spend millions of dollars engineering it, like an apartment broker requiring you to give them a check for deposit/first month’s rent and signed lease prior to releasing the keys to you. You don’t need to spend millions of dollars engineering an electronic solution to this problem, you just need a legal agreement between the broker and the landlord allowing the broker to accept the deposit on the landlord’s behalf. That’s not exactly a stretch. I don’t even know my current landlord’s name, to be honest. It’s on the lease, but my deposit and rent go to the management company that maintains the building.