Is the US banking system "backward"?

[SanVito]

@hogarth

We use them occasionally to transfer money from my wife’s bank account to my bank account (or vice versa). We could do the same thing with an email transfer, but I think we have a limited number of free email transfers per month (compared with a book of cheques that is just otherwise gathering dust).

This is weird. Here in the UK, if I want to send my wife money, I simply open the app on my phone and send it to her account. And there’s no limits on how often I can do this. No charges.

@doreen

Because I can pay any entity electronically if they are willing to do that- the issue is plenty don’t want to be paid that way.

Then that sounds like a cultural thing. All banking transactions here are done electronically, I don’t think a business could survive if it didn’t want that. And I’m not sure why they wouldn’t - it means the money is in their account instantly instead of waiting for a cheque to clear.

@OttoDaFe

They seem to take various forms worldwide, but in the US they’re something along the lines of a co-op: a member-owned institution that provides most of the function of a commercial bank, but is by definition a non-profit.

In the UK, we have something similar - Building Societies. Originally set up to help people save for buying a home.

[bob_2]

@SanVito

In the UK, we have something similar - Building Societies.

Originally, yes. These days, they operate in a very similar way to banks " The five Fitch-rated UK building societies generated combined pre-tax profit of GBP739 million in 1H22"

There is concern here that cash is being squeezed out, although it has made a bit of a comeback lately. I rarely use it and neither do any of my family and friends, but it seems that there are a substantial number of people (not only drug dealers) that want to retain cash in the system.

On the subject of allowing utilities, etc, to “pull” money from my accounts - most of them offer a discount to customers who sign up for direct debits. I assume that it makes accounting simpler and cheaper.

[SanVito]

@bob_2

Originally, yes. These days, they operate in a very similar way to banks " The five Fitch-rated UK building societies generated combined pre-tax profit of GBP739 million in 1H22"

They’re still mutuals, owned by their members, ie customers. Profits don’t go to shareholders, they’re reinvested into the business. They also often tend to focus on mortgages and savings, maybe insurance, rather then a full range of banking products. Nationwide are an exception here.

[Dewey_Finn]

In the United States, there are a few mutual banks, in addition to the credit unions.

[OttoDaFe]

@OttoDaFe

… lack of a common method of processing transactions …

It occurs to me that maybe I should clarify this a bit. I wasn’t referring to transactions between institutions: credit unions are as thoroughly enmeshed in that system as their commercial cousins. I meant the myriad technologies employed in the US for customer transactions: tap-to-pay, Apple Pay / Google Wallet, various kinds of POS* terminal … and it wouldn’t surprise me if someone still used the old (as in 1970s) style embosser — though fewer cards seem to have raised numbers these days — in which case the bank/cu would still have to handle the physical slip.

* Point-Of-Sale, though the other acronym sometimes applies as well.