after checking, that is the only information required to transfer money. And as I think about it, that is all that can be. That is all the information on the check-and the check works. It works because of the honor system-and the practice of most banks to do some form of verification. Usually the bank has to know the party receiving the money. One reason why Americans don’t usually use bank transfers to pay the dog walker.
In New Zealand it is very easy to pay into someone else’s bank account from online banking. My bank calls it a virtual cheque. No prior setup with the other party is required. You just enter the account number and amount. The full account number in NZ also identifies the bank. If the amount is over some threshold, I have to call them by phone to approve or do something involving an SMS message.
I’m always a little nervous using it to pay a large amount. You really have to make sure the account number is correct. I imagine if I sent it to the wrong account it could be a tricky situation trying to get it back.
As for cheque and check. In NZ we have “cheque accounts”. In the US we have “checking accounts”. When in Canada I noticed that they have a foot in both worlds and have “chequing accounts”.
There’s no setup required to receive: if you have an account with a major bank you can receive transfers, end of story. To send you need to have online banking, but once that’s set up it is vastly easier than the whole cheque process.
“Virtual cheque”, eh? I think this thread has finally educated me as to what a “giro” is. From the Canadian viewpoint, it would be like an Interac Email Transfer, except that I’d provide the bank account and transit number to send to, and the money would just show up in the recipient’s account.
With our current Interac Email Transfer system, you log in to your online banking, select “transfers and bill payments”, select the recipient, then fill in the amount. (You set up the recipient before, or you can just fill in the information then and there for a one-time send.) You get a chance to select a new security question and answer, or reuse the last one. Then you press send. The money is immediately withdrawn from your account (plus a service fee), and it is held by an intermediate corporation. After about half an hour, the recipient gets an email with a link.
Clicking on the link gives you a screen provided by the intermediate corporation, where you can select your bank. Then it goes to your selected bank’s online banking login; you log in, then answer the security question (which the sender gives you separately, as by a phone call), and select what account you want to deposait your money into. The intermediate corporation then transfers the money into the recipient’s account. This happens immediately.
To use this easily, both sender and recipient have to use one of the Canadian financial institutions that have online banking. Both sender and recipient need email addresses as well; the money goes across the banking network, but the notification to the recipient travels by email.
Interac says that you can send to any Canadian bank account, even those without online banking or email, but it takes longer. I suspect they print and mail a cheque, but I’m not sure of this; I’ve never done it.
I think I’d like to see giros retrofitted onto this system. I’d like to send my rent that way, for example, and right now they prefer paper cheques. I once lived in a place where I went to the landlord’s bank and directly deposited the rent, but that was unusual.
For the sender, sending a giro (is that how you refer to it?) might not look all that different. You’d just provide the bank account and transit number instead of an email address and a security question. For the recipient, nothing would need to be done. I’m sure that implementing the internals of the process would be knotty in the extreme.
Now, a question for the US Americans: what exactly is a “check card”? Is it the same as an ATM or banking card? Is it the same as a debit card? I get the impression that a check card has no PIN, and is presented in lieu of filling out a real check when paying. Is this true?
I had no idea that writing checks had gone so much by the wayside in the US. Tells you how long it’s been since I last had an account over there.
But I worry where this will lead. Looks like a slippery slope. First you do away with checking, then the next thing you know there go the scales in the butcher shops, and suddenly there are no checks and balances.
Use whatever you like; it’s all one to me. I wasn’t niggling; I was responding to Nunavut’s query in the immediatly preceding post (“Also, is ‘check’ an accepted spelling of ‘cheque’? Is this one of those British/US English things?”).
Yes.
That’s just a Visa or Master card backed up by the real money in your checking account instead of credit. One thing you have to be careful about is that the money is immediately taken out of your account when the transaction is authorized, not when it is posted a few days later. OTOH, with a real credit card, you are only responsible for balance that has been posted. This can make a difference when you use the card for hotel reservation and such, because they often authorize an amount greater than the real charges, to make sure that they are covered in case you trash the room or what not, and then post a different amount later once the charges have been finalized.
Yeah, it’s a little frightening when you think seriously about it. Most of my bills are paid by automatic withdrawal, that is to say, I went to each company’s site and gave them my account number and the bank’s routing number and basically told them to have at it. I could have entered anybody’s numbers. I guess the flip side of it is that I couldn’t get away with it for long, and there’d be little doubt about what I’d done.
Not quite as frightening as you think. The electricity company (say) knows not only your account number and your bank’s routing code but also your name – you are their customer, after all. When they contact the bank to process a payment, they report your name, too, and if that doesn’t match the name on the account, the whole thing falls over.
So, even if you had my bank details, you would need to open an electricity account in my name in order to run this scam, and the electricity company might well want evidence that the property to which they are supplying electricity is registered to someone with my name, or is otherwise connected with someone with my name. It can be done, but it’s not quite as straightforward as putting in someone else’s bank account number and bank routing code on the form.
Okay. So it’s just a Visa/MC-branded debit card then. I was sure that I’d read here on the boards that check cards required neither a signature nor a PIN, and was aghast at the lack of security.
From other discussions here, I’m aware that you can ‘run it as credit’, in which case you sign a receipt and the transaction is not immediate and gets posted after a few days like credit-card transactions.
You can also ‘run it as debit’, in which case you use a PIN? Is the transaction immediate and online then? You get approved or declined depending on your bank balance at the moment?
That’s how it always is using Interac debit cards in Canada; there is no such thing as offline debit here. Small places, you wait while you hear the modem dialling and connecting to the payment provider’s server. Big places are always connected by net connections and the transaction is so fast, it’s over befopre I get my card back in my wallet.
If there is no immediate communications with the server, the Interac terminal doesn’t work at all. And a few times I’ve run into that. Once I was in the food court at Dundas Square in Toronto; I’d ordered my food and it was ready and I went to pay and the cashier apologetically said that debit card service wasn’t available; we’ll wait while you go to the ATM across the court. I hoofed it over to a CIBC ATM that was trumpeting the fact that it now took China UnionPay cards, used my card (from a different bank) to get cash (this paying an extra fee), yanked out some cash, and returned to pay and get my food.
Such events are rare though. Most of the time, if the Interac terminals are down, there are larger problems, like a blackout.
True enough, all. But I guess my point was that after being provided with only two numbers and my name, my bank will happily send money to any business that asks, as far as I can tell. Not that I actually worry about it in any case, but it does seem ridiculously easy.
And when balance goes, it’s all going to fall over… sigh it’s so very sad, we should do something to prevent it.
I think that a business wishing to take advantage of this arrangement has to enter into an agreement with the bank, agreeing to return any money if you dispute the charge. And possibly they have to provide some kind of security, or be regarded by the bank as good for that commitment.
Which means, of course, it’s up to you to check the amounts being debited to your account, and to object if they don’t look right.
Not more, differently. My accounts only have maintenance fees if they’re inactive, and that’s only the CCs; Saving Accounts don’t have those fees. Would you like to hear the % I’m paying on my mortgage, the % I’d pay on my credit cards if they weren’t set up for full monthly payment, or the cancellation penalties on that same mortgage? That’s, respectively, 1.75%, 0% so long as I’m still paying in 3 months or less, and 0.1% of the final balance (partial cancellations, 0%).
Can anybody explain why US banks do transfers this way? This looks incredibly backward. Why would they print out a cheque and mail it instead of just transferring money? I can transfer money from my bank account to any British bank account (actually, I think it’s any European bank account if they send me the right numbers) and it will be deposited most times within the hour.
I can only understand wanting checks instead of direct transfers if the other person has no bank account at all - is this the case for both your gardener and your plumber**? While I can imagine a poor immigrant not yet having a bank account, I expect a business, even if it’s a small one, to have a bank account! Once you have a bank account, you can receive money by transfer just as easily as cashing a check.
So how does an immigrant Vietnamese convert a check to cash if he has no own bank account? Does he give the check made from you to him to a supermarkt cashier to pay his grocery bills, and the supermarkt knows that you authorized the money from your account, although it’s a different party than you made the check out to originally?
In Germany, up to the 50s, ordinary workers would be paid weekly with a “wage bag”, containing cash (and the bill with the wage and social security etc deductibles) in a paper bag, while proper white collar employees were paid bi-weekly by transfer. State officials were paid monthly by transfer.
But in the 50/60s, the businesses successfully lobbyied the banks to offer checking accounts to everybody - it was far easier to generate transfers to everybody than having the secretary go down to the bank to get cash every friday, count it out and hand it over. It also was a big security risk to have that much cash lying around. Once every normal employee, even workers, had accounts, it was easy for landlords and utilities and everything else that was done regularly to set up withdrawal allowances.
Originally, the business paid the employees an additional 5 DM to cover the account fee, but over the decades, that has fallen away. Although OTOH, there is a larger variety in account types, including free ones, today.
Today, most ordinary employees have a checking account (or giro, as we call it), for normal business, so to receive payment, you just give your account nr. and bank code to the other person. On standard business letters, this is listed on the bottom line.
The only people who have problems are the poorest ones - the ones on Hartz IV (social welfare) or homeless. Many of the fee-free account types require either a regular wage income, or a minimum balance, so they have to pay account fees. And if a (homeless) person can’t get an account at all*, they have to go to the post bank or savings bank (Sparkasse) and pay in the amount in cash + fee to make a transfer, because many places don’t accept cash payments anymore. The fee is to cover the bank for having an extra employee counting the cash and doing manual work instead of the computer. And the places that don’t accept cash (I don’t mean supermarkets, but quasi-public things like city service companies; offical places like the city or tax office have to accept cash, but others are free to deny) can save themselves the cost and hassle of an extra employee to count, record the cash and carry it to the bank.
- Private banks can deny an account without reason. Officially, Sparkassen = savings banks, partly controlled by the city and working for the community, not for profit, are supposed to provide services to those denied elsewhere. In practice, however, they charge a lot. So having no bank account because you are poor is more expensive than having an average wage income and finding a fee-free account.
** Hijack: Do you mean you hire people who drive around in vans to clean your pipes?? Wow. I would never do that, even if I were not a renter! I want a proper business that has certified people know what they are doing. Otherwise, I wouldn’t need experts in the first place!
I don’t know where you get that from? Yes, a check may cost more than the US, but we hardly use checks. Are you saying that you don’t have any account fee at all? Because in previous threads, USians complained loudly about how much they pay their banks in fees!
Did you miss the part where I said that several banks in Germany offer fee-free accounts?
To me, that sounds simply insane. I don’t understand why your states are allowed to do so much seperatly, if it ends up with so much wasted time, either because the regulations vary from state to state, so you have to learn them anew again when dealing with Grandmas account, or because you are not allowed to have branches of the same bank in different states.
Whereas here, not only do German banks have branches in all states, the bigger private banks partner with banks in other countries, so I can draw money from an ATM in Italy when on holiday.
No… I don’t think I’ve ever… no wait, I have paid in cash once for chimney sweeping, I just happened to have the cash ready. Everything else, they either hand you a bill, or mail one.
Using cash for maintenance isn’t unheard of though… it’s just that anyone asking for cash is almost certainly not going to declare it as income. The codeword for showing your willingness to take part in a tax fraud and relinquishing the right to complain about the work done is “Is there a cash discount?”. You know… electric work that sets your house on fire… tough shit, you have no way to show they worked on your house.
To be fair, if we’re comparing like with like, that is using a bank account across a continent-sized area, then Europeans would pay fees probably higher than Americans. It’s just that we tend to conduct most of our business within our own country, which as you say is free for routine operations for many of us.