It's 2020. Why does it still take DAYS for a check to clear?!

When I moved across country and had to change banks, I transferred the funds from my old bank to my new one via cashier’s check, which was even worse. Everyone involved on both ends was able to verify that the old bank had that amount in my account, and that I had closed the old account, and so on, and the banks trusted each other, but it still took a month for my money to be accessible to me on this end.

I stopped accepting checks at my business ~10 years ago. Too many were bouncing and a check guarantee service was too expensive.

Some people complained, but I persisted. My county’s DA stopped by and urged me to reconsider, as his office had instituted programs to help businesses recover bounced check money. He said businesses not accepting checks made the county look bad. I persisted.

My competitors all eventually joined me in not accepting checks!

Actually that is changed now. Even mid-size companies use Direct Deposit from the first paycheck now. It was still true just 4-5 years ago though.

I think that’s going to depend a great deal on specifics - for example, in my state, manual workers must be paid weekly and no more than 7 days after the end of the pay period. It’s going to be more difficult to start with direct deposit for the first paycheck of an hourly worker who must be paid on 10/9 for the hours he worked up to 10/2 and who started work the day after he was hired than it would be to directly deposit the first paycheck of a salaried employee who is paid once a month and started three weeks after she was hired.

Does any other developed nation use checks? I doubt it.
I think their very nature makes transactions slower and more problematic nowadays.

Cheques are almost obsolete in the UK. They do still exist though and I got a dividend cheque last week (it will be a direct payment in future).

I paid it into my account via the bank’s app by scanning it with my phone and it showed up on my statement a few hours later. I understand that the bank can grab the money back if the cheque bounces.

Those aren’t that safe or reliable. I am always hearing about Zelle or Venmo scams or Paypal accounts being frozen. (I use Paypal, but only for buying things, and only through my credit card.) Canada has a system (Interac) which is shared by all the banks and is safer but still has a few issues. If you send money to a fraudster you are extremely unlikely to get your money back (unlike a credit card transaction). Some businesses accept Interac but most don’t. An Interac complaint could result in the business’s bank account getting locked, so I presume most don’t want to take the risk.

Canada does. Cheques aren’t commonly used by younger people, but businesses still use them with each other a lot.

I wonder what the advantage of such form of payment can be nowadays.

The law requires (PDF file) banks to make the funds available to you within 1 day for checks drawn on a local bank and 4 days for checks drawn on non-local banks. The bank has little incentive to give you money any faster than required by law.

Note that this is not the length of time required for a check to actually clear, it’s the time required for your bank to make funds available to you. It is still possible for a check to bounce after they have made the funds available.

Some business cheques have a lot of information written on them; it’s like they’re an invoice and a cheque in one. You can add information to an Interac e-transfer, but IME only a business would actually put more than one sentence into the notes. I once received several thousand dollars via a single e-transfer (the payer had to call the bank to breach the limits) with no notes at all as to why I received it.

Speaking of limits, cheques have ludicrous limits. I’m pretty sure you could write a $10 million cheque with no issues, provided you had $10 million in your account! E-transfers are limited to about $3,000 per day without calling the bank, and there’s a weekly limit too (around $10,000, I think). If I’m paying a subcontractor who is renovating my office tower (as an example) e-transfers wouldn’t cut it. I am not self-employed and don’t know how large the typical business bill is, but just imagine what kind of expenses a medium or large business has.

I think the limits are for the best. While e-transfer fraud isn’t that common, I know it happens: I know someone whose bank account was taken over (he was convinced to give up his credentials) and he was defrauded for $4,000 over two bank accounts.

What about a bank transfer?

Cashier’s cheques certainly have a valid scope for their application even today. The payee accepting one can be sure that the funds are actually available, and for that reason the cheque is as good as a handover of physical cash - but it can be used for amounts too large for cash. Which is why, for instance, my jurisdiction prescribes that in court auctions of foreclosed property, down payments must be made in that form.

So they can make money from it! This is huge bug bear of mine. The finance system makes money from the fact you can do transfers and stock purchases at such a high rate the speed of light is factor.

There is exactly zero reason all transfers and checks couldn’t take minutes at most. The fact they don’t is because that money isn’t just sitting in a vault somewhere, its been invested by the bank and they are making money from it. If you add up all the money made by cash that’s sitting there waiting for a check to clear or a transfer to happen, its a sizable chunk of cash. Its not in their interests to change the system and lose that money.

I’ve never done one like that, not being self-employed. I don’t even know how to set it up beyond my own different bank accounts (which is only allowed because I proved that I own both accounts). But I would have questions.

  1. How much information do you need to give out? (Cheques give out a lot of info too, so I hardly see this as a reason not to use one.)
  2. How much space is there for notes?

When I do one of these transfers between my own bank accounts, the money still vanishes for a few days because it uses the ACH system. It’s basically using a cheque without using a physical cheque. It’s a lot like a photo-deposit, but (because it’s between Kimera757 and Kimera757) there’s no real risk of fraud.

In my case there are limits, but I believe bank transfer limits for businesses are much larger. Maybe even enough to pay $10 million bills.

You say that like check scams were never a thing.

Almost all Zelle scams I have read about (all actually but maybe I missed some) need you to help. Basically the bad guys call you pretending to be your bank and you (general “you”) enable the scam by providing the information they need to complete the scam.

I’m not an American and don’t have access to Zelle, which is why I didn’t try to explain how a Zelle scam works. Maybe most people wouldn’t fall for Zelle scams.

Hehe, I fell for a Zelle scam. Pre-pandemic, I was out drinking with my gf. We ran into a friend of hers who took my gf off to the side and asked if she could borrow $50, cash. My gf never carries cash, so she asked me to lend her $50, just for a few minutes.

She gave the cash to her friend, who left with it. Then I asked my gf (out of curiosity) what she meant by lending her the money “for a few minutes”. Turns out she’d just started using Zelle, thought everybody used it, and she’d already sent me the $50.

Well, I’d never heard of Zelle. I got an email that my $50 was waiting for me, I just had to install Zelle on my phone, which I attempted. But, Zelle doesn’t like my small, local bank and wouldn’t work without me jumping through hoops. Fuck that noise. She eventually unsent my cash, but to the best of my knowledge, she’s never paid me back. :sob:

Not just three months ago, and that company is in the NSADQ and S&P 100.

Several French posters on reddit claim checks are still in use.

Sorry, I left out the word “most”. Most mid-size and up companies now do Direct Deposit from the first check.