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This is one area where the US seems to be behind compared to the UK. I am from the UK and that service would look quite poor if it launched over here. We have a

This is one area where the US seems to be behind compared to the UK. I am from the UK and that service would look quite poor if it launched over here. We have a system called faster payments service that offers instant (although in some cases up to 2 hours) bank transfers for payments up to £100,000 (can differ between banks). You can use this directly if you share bank account numbers and sort codes but there are also wrappers around FPS like Barclays PingIt that people can register with and use your mobile number instead. There is no fee associated with these services.

ketralnis 13y ago
The US equivalent is ACH, which has the major downside that using only the bank ID (routing number) and account number you can effectively wipe out the target's account. It's up to your bank (or whatever ACH proxy) to keep you from doing that, not to the interchange, both legally and technically. ACH also takes several days to work, and has a wide window for either bank to declare the transfer fraudulent, so many banks stretch the time out longer to account for that. Most stock brokers will credit your account long before the ACH transaction completes (with some restrictions of course). There are also wrappers around this here like Chase's Quickpay or Ally's Popmoney but most require that both people use the same bank, or that you give your ACH details to a bank that isn't your own. Paper cheques just have the routing/account numbers along the bottom, and AFAIK essentially work via ACH anyway, so they have all of the same downsides, plus taking longer to complete. Also, the window for fraud with ACH is so great that when you tell one bank about another account's ACH details so that you can transfer money, they "authenticate" this by making small, sub-$1 deposit amounts, and asking you what the amounts were, to prove that you can see the target account. So this "linking" process takes the entire ACH transaction time as well the first time you do it. Some banks have taken to using a service called Yodlee which asks you for the target accounts' username and password. That's right, Wells Fargo asks for your username and password on Scottrade to authenticate the transfer because they don't trust the way ACH's liability lies. So this won't work to send $8 to your buddy anyway. Moving money without a service like paypal/venmo/square/google wallet is really quite difficult, especially if you don't want to trust an organisation with a history of taking people's money (Paypal) or if you don't want to pay a transaction fee.
- bti 13y ago
  If anyone is interested more about the state of transferring money and ACH in the US, there was a good Planet Money episode [1] about it recently. [1] http://www.npr.org/blogs/money/2013/10/04/229224964/episode-489-the-invisible-plumbing-of-our-economy http://www.npr.org/blogs/money/2013/10/04/229224964/episode-...
- virtuz 13y ago
  > ACH also takes several days to work, and has a wide window for either bank to declare the transfer fraudulent Still some catching up to do with the UK/EU. Transfers within 15 minutes (99%) with fraud checking etc. is awesome.
- jervisfm 13y ago
  > The US equivalent is ACH, which has the major downside that using only the bank ID (routing number) and account number you can effectively wipe out the target's account Interesting. I had come to a similar conclusion myself. I noticed that in paying my school fees all I needed was those two numbers (banking routing #, bank acct #) for payment with no further verification. As you have observed all of these details are readily available on paper checks. One way to mitigate the issue of someone potentially wiping your account is to have two accounts. One public and one private. The private one would contain (most of) your actual funds whilst the public account, which you would share freely as needed would contain just enough funds to complete whatever transactions that you need to do. Sure, it is not as convenient because you have to manage two accounts but at least that way you reduce your exposure to your funds being completely depleted.
  - kevinpet 13y ago
    I use checking and savings in this way. I think it's pretty common to do so that checking is a revolving fund and doesn't hold any significant money, but it's also common to just have all your money in the one account. Anyway, good description of ACH above. Very few people understand how it works.
- bloopletech 13y ago
  Are you serious? Why would _anyone_ design a system like this? In Australia, the equivalent is EFT (Electronic Funds Transfer). You can deposit money to anyone's account by telling the bank their BSB (Bank/State/Branch number) and their account number; however this is not sufficient information to withdraw money. To withdraw money: 1. at a physical bank branch: a. you put your credit/debit card in a POS terminal and enter your pin/sign to authenticate. b. provide yous credit/debit card and photo ID to the teller. 2. at an ATM: credit/debit card + pin number. 3. online banking: either the credit/debit card number and a password and often a pin as well, or a separate number and password. All of these use an independent authentication source to the bank account number. Also the delays quotes here are insane: In Australia, there are essentially 2 ways to pay for something (excluding cash): 1. EFT (Electronic Funds Transfer) 2. Credit card (possibly using a debit card) transaction. On POS terminals, you can choose either; the differentiator being whether you want to use a savings account (EFT) which goes via your bank, or a credit (or savings account accessed via debit card) account, which goes via MasterCard/Visa. All forms of EFT take 1-2 business days between banks, pretty much all the time; and they're universally free for the payer. Credit/debit transactions seem to take 1 day universally. We have a fairly stagnant banking system, with 4 major banks having basically the entire consumer market (and the vast majority of the nonconsumer market as well). Why, in a small, stagnant market like ours, do we fare much better than the US system? [edit: I forgot to mention, checks are dead here, they're now almost only used for large transfers of money where: 1. you don't want to use EFT; 2. they're over the daily online maximum for EFT transfers, and you can't be bothered to go to a bank branch (although you can only get bank checks at a branch AFAIK); 3. You want an immediate guarantee that the ammount was paid and the date/time/payer/payee (as opposed to waiting 1 day for the payment to come through).]
deleted 13y ago
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takluyver 13y ago
Having recently moved from the UK to the US, I was quite shocked at the state of US banking. In the UK we can transfer money for free, use many ATMs free (not just the bank's own), we get free chequebooks, and there are plenty of accounts with no monthly fees. My US bank has a whole list of charges, and it's not made up by higher interest rates.
- djhworld 13y ago
  UK banks do the same, they just charge their fees to people who go overdrawn instead. There's no such thing as "free banking" in the UK
  - flavor8 13y ago
    As another person who has lived in both places, banking is a lot freer in the UK. Yes, UK banks charge overdraft fees - but so do US banks. Most US banks will charge you to send you replacement checkbooks; many will even charge you a monthly fee to maintain the account. There are notable exceptions, but they don't have mass market buy-in.
    - kamjam 13y ago
      I moved to Canada (from UK) and similar situation. Monthly fees, X amount of transactions per month, fee to withdraw from other banks (although we had this in UK too for a few years), fee to pay someone else money whether in the same bank or not and even via the internet. I tried to deposit a cheque into my landlords account and the bank teller would not accept it, had to be cash or bankers draft - I presume because they may have a limit on the number of transactions per month and anything over wold cost them additional money. I found it very bizarre.
- foundlogin 13y ago
  Except your UK bank will rape you if you look at it the wrong way. That's how they make money without fees.
djhworld 13y ago
Remembering people's bank account details is a nightmare though. I sometimes need to pay friends or family back for a meal or whatever, but going through the rigamarole of requesting their bank account details and then logging onto internet banking, going to the payment screen, putting their details in (making sure you don't mistype a digit in their bank account number) and then hoping you did everything OK is just a fundamentally broken UI. The Barclay's "pingIt" system is a step in the right direction, I think all banks should adopt a similar system. Paypal "gifting" is a good alternative to this but not everyone has a paypal account
- ZoFreX 13y ago
  Both banks I've used recently (Natwest and Halifax, not that I can recommend either) keep a saved list of people you've paid in the past, so I only had to go through that dance once for each person I paid. For the people I paid most frequently it was very convenient, I could send them money in seconds using the Natwest Android app.
- askew 13y ago
  Ah - I was under the impression PingIt could be used by non-Barclays customers. That said, NatWest's mobile app also allows this behaviour: I can send a contact a text with a link allowing them to deposit the amount specified: up to £250.
threedaymonk 13y ago
Faster payments are so fast in some cases that, transferring between accounts with different banks, I see an update in the recipient window before the sending bank website has finished serving the confirmation page!
- ZoFreX 13y ago
  On one occasion I asked someone to transfer me money while I was queueing for an ATM. Hung up the call and took the money out. It's FAST!
driverdan 13y ago
That's how it works in much of Europe. The US banking system sucks. I have clients in Germany. They pay me via credit card because bank transfers to US accounts are such a pain. If I had a German account they could pay me instantly without hassle. Even many of my US clients pay me by credit card because they'd otherwise have to mail me a check (yuck) or get some kind of 3rd party bank transfer service which they're not willing to do.

ketralnis 13y ago

The US equivalent is ACH, which has the major downside that using only the bank ID (routing number) and account number you can effectively wipe out the target's account. It's up to your bank (or whatever ACH proxy) to keep you from doing that, not to the interchange, both legally and technically. ACH also takes several days to work, and has a wide window for either bank to declare the transfer fraudulent, so many banks stretch the time out longer to account for that. Most stock brokers will credit your account long before the ACH transaction completes (with some restrictions of course). There are also wrappers around this here like Chase's Quickpay or Ally's Popmoney but most require that both people use the same bank, or that you give your ACH details to a bank that isn't your own. Paper cheques just have the routing/account numbers along the bottom, and AFAIK essentially work via ACH anyway, so they have all of the same downsides, plus taking longer to complete. Also, the window for fraud with ACH is so great that when you tell one bank about another account's ACH details so that you can transfer money, they "authenticate" this by making small, sub-$1 deposit amounts, and asking you what the amounts were, to prove that you can see the target account. So this "linking" process takes the entire ACH transaction time as well the first time you do it. Some banks have taken to using a service called Yodlee which asks you for the target accounts' username and password. That's right, Wells Fargo asks for your username and password on Scottrade to authenticate the transfer because they don't trust the way ACH's liability lies. So this won't work to send $8 to your buddy anyway. Moving money without a service like paypal/venmo/square/google wallet is really quite difficult, especially if you don't want to trust an organisation with a history of taking people's money (Paypal) or if you don't want to pay a transaction fee.

bti 13y ago
If anyone is interested more about the state of transferring money and ACH in the US, there was a good Planet Money episode [1] about it recently. [1] http://www.npr.org/blogs/money/2013/10/04/229224964/episode-489-the-invisible-plumbing-of-our-economy http://www.npr.org/blogs/money/2013/10/04/229224964/episode-...
virtuz 13y ago
> ACH also takes several days to work, and has a wide window for either bank to declare the transfer fraudulent Still some catching up to do with the UK/EU. Transfers within 15 minutes (99%) with fraud checking etc. is awesome.
jervisfm 13y ago
> The US equivalent is ACH, which has the major downside that using only the bank ID (routing number) and account number you can effectively wipe out the target's account Interesting. I had come to a similar conclusion myself. I noticed that in paying my school fees all I needed was those two numbers (banking routing #, bank acct #) for payment with no further verification. As you have observed all of these details are readily available on paper checks. One way to mitigate the issue of someone potentially wiping your account is to have two accounts. One public and one private. The private one would contain (most of) your actual funds whilst the public account, which you would share freely as needed would contain just enough funds to complete whatever transactions that you need to do. Sure, it is not as convenient because you have to manage two accounts but at least that way you reduce your exposure to your funds being completely depleted.
- kevinpet 13y ago
  I use checking and savings in this way. I think it's pretty common to do so that checking is a revolving fund and doesn't hold any significant money, but it's also common to just have all your money in the one account. Anyway, good description of ACH above. Very few people understand how it works.
bloopletech 13y ago
Are you serious? Why would _anyone_ design a system like this? In Australia, the equivalent is EFT (Electronic Funds Transfer). You can deposit money to anyone's account by telling the bank their BSB (Bank/State/Branch number) and their account number; however this is not sufficient information to withdraw money. To withdraw money: 1. at a physical bank branch: a. you put your credit/debit card in a POS terminal and enter your pin/sign to authenticate. b. provide yous credit/debit card and photo ID to the teller. 2. at an ATM: credit/debit card + pin number. 3. online banking: either the credit/debit card number and a password and often a pin as well, or a separate number and password. All of these use an independent authentication source to the bank account number. Also the delays quotes here are insane: In Australia, there are essentially 2 ways to pay for something (excluding cash): 1. EFT (Electronic Funds Transfer) 2. Credit card (possibly using a debit card) transaction. On POS terminals, you can choose either; the differentiator being whether you want to use a savings account (EFT) which goes via your bank, or a credit (or savings account accessed via debit card) account, which goes via MasterCard/Visa. All forms of EFT take 1-2 business days between banks, pretty much all the time; and they're universally free for the payer. Credit/debit transactions seem to take 1 day universally. We have a fairly stagnant banking system, with 4 major banks having basically the entire consumer market (and the vast majority of the nonconsumer market as well). Why, in a small, stagnant market like ours, do we fare much better than the US system? [edit: I forgot to mention, checks are dead here, they're now almost only used for large transfers of money where: 1. you don't want to use EFT; 2. they're over the daily online maximum for EFT transfers, and you can't be bothered to go to a bank branch (although you can only get bank checks at a branch AFAIK); 3. You want an immediate guarantee that the ammount was paid and the date/time/payer/payee (as opposed to waiting 1 day for the payment to come through).]

deleted 13y ago

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takluyver 13y ago

Having recently moved from the UK to the US, I was quite shocked at the state of US banking. In the UK we can transfer money for free, use many ATMs free (not just the bank's own), we get free chequebooks, and there are plenty of accounts with no monthly fees. My US bank has a whole list of charges, and it's not made up by higher interest rates.

djhworld 13y ago
UK banks do the same, they just charge their fees to people who go overdrawn instead. There's no such thing as "free banking" in the UK
- flavor8 13y ago
  As another person who has lived in both places, banking is a lot freer in the UK. Yes, UK banks charge overdraft fees - but so do US banks. Most US banks will charge you to send you replacement checkbooks; many will even charge you a monthly fee to maintain the account. There are notable exceptions, but they don't have mass market buy-in.
  - kamjam 13y ago
    I moved to Canada (from UK) and similar situation. Monthly fees, X amount of transactions per month, fee to withdraw from other banks (although we had this in UK too for a few years), fee to pay someone else money whether in the same bank or not and even via the internet. I tried to deposit a cheque into my landlords account and the bank teller would not accept it, had to be cash or bankers draft - I presume because they may have a limit on the number of transactions per month and anything over wold cost them additional money. I found it very bizarre.
foundlogin 13y ago
Except your UK bank will rape you if you look at it the wrong way. That's how they make money without fees.

djhworld 13y ago

Remembering people's bank account details is a nightmare though. I sometimes need to pay friends or family back for a meal or whatever, but going through the rigamarole of requesting their bank account details and then logging onto internet banking, going to the payment screen, putting their details in (making sure you don't mistype a digit in their bank account number) and then hoping you did everything OK is just a fundamentally broken UI. The Barclay's "pingIt" system is a step in the right direction, I think all banks should adopt a similar system. Paypal "gifting" is a good alternative to this but not everyone has a paypal account

ZoFreX 13y ago
Both banks I've used recently (Natwest and Halifax, not that I can recommend either) keep a saved list of people you've paid in the past, so I only had to go through that dance once for each person I paid. For the people I paid most frequently it was very convenient, I could send them money in seconds using the Natwest Android app.
askew 13y ago
Ah - I was under the impression PingIt could be used by non-Barclays customers. That said, NatWest's mobile app also allows this behaviour: I can send a contact a text with a link allowing them to deposit the amount specified: up to £250.

threedaymonk 13y ago

Faster payments are so fast in some cases that, transferring between accounts with different banks, I see an update in the recipient window before the sending bank website has finished serving the confirmation page!

ZoFreX 13y ago
On one occasion I asked someone to transfer me money while I was queueing for an ATM. Hung up the call and took the money out. It's FAST!

driverdan 13y ago

That's how it works in much of Europe. The US banking system sucks. I have clients in Germany. They pay me via credit card because bank transfers to US accounts are such a pain. If I had a German account they could pay me instantly without hassle. Even many of my US clients pay me by credit card because they'd otherwise have to mail me a check (yuck) or get some kind of 3rd party bank transfer service which they're not willing to do.