True, but I can’t really see why that is any great advantage.
It’s just a couple of numbers and if you are involved in a financial transaction with someone it doesn’t seem to be that much of a hardship to get them to give you those.
If I want to pay someone money here in the UK it’s a two minute job sitting at the computer.
If I was to use a physical cheque I’d have to:
Find the cheque book
Write the cheque
Find and address an envelope and put the cheque in it
Find a stamp and stick it on the envelope
Go and post it
I’ve never had anyone I was paying object to giving me the account number and sort code.
But more importantly, most people don’t know their own account number and sort code. They’d have to look it up. And that’s just as much bother as it would be for me to write the check in the first place.
Remember, we’re just talking about transfers between individuals here. Electronic transfer is the rule for salaries, government payments, and, to a greater and greater degree, bill payments. But electronic transfers between individuals are not generally available in the U.S. banking system yet. If and when it does become available, I suppose people will be more likely to have the necessary information readily at hand.
They only don’t know it because they currently don’t use it. If your regular way of transferring money is to give out your sort code and account number, you learn them pretty quickly. I left the UK over 13 years ago and still remember my UK sort code and account number. I don’t know my US ones because I have no need to know them.
I didn’t think “more likely to have the information readily at hand” was all that close to the same. Anyway, if you did mean that, then my post is one data point from real life supporting it.
Underline mine: does that really happen in the US, bank accounts having different formats in different banks? A Spanish 20-number code includes all the info needed to post the money, different parts contain different information but I hadn’t even thought of breaking it up into “routing” and “account” until I was in the UK two years ago; we’ve had the 20 numbers since before I was born (I’m a 1968 vintage) and most people don’t even know that the first 4 indentify the bank, the next 4 the branch, the next 2 are a safety feature and the last 10 are the individual account. The IBAN for a Spanish account is a code identifying the country, followed by several more letters identifying the bank, followed by the 20 numbers; you can order a transfer to Spain giving either the IBAN for the account or the SWIFT for the bank plus the 20 digits.
Why would the bank involved in the transfer need to “keep track of routing info”? That should be provided by the person ordering it.
If ordinary people in the USA can’t make electronic transfer, over here (France) we can’t cash cheques. We have to deposit them on a bank account.
More exactly, in theory, you can write a check that can be cashed, but you have to ask your bank for a specific bookcheck, I believe for a fee, because normal cheques are pre-printed as non cashable. I’m not aware of anybody I have known writing cashable cheques, even though I assume it exists (but for what use? I wouldn’t know).
Cheques are also non-transferable to another person or entity (again, except if you ask for specific checkbooks), so you can’t cash your check for a fee at some specialized business as it seems to be done in the USA
This (plus electronic transfers) makes having a bank account essentially necessary in France. Note that if no bank wants your business for some reason, the national bank will pick one that will have to open an account for you with minimal service (basically withdrawals in cash at the bank).
Don’t know if it’s the same in other european countries.
Well, in Spain you can take a check to your bank, “deposit” it and “withdraw” the same amount (no fees involved), so you end up having cashed it. It has to be done at the bank of the recipient, not the payer’s. But checks are very, very rare; in 1993 I had a job where we got paid in checks because otherwise processing could take a ridiculous amount of time (tiny branch in a tiny village), in 2004 I paid for my car with a cashier’s check because the store’s finance guy was on vacation and nobody could give me their account number, in 2006 when I bought my house the person from my bank who had to register the mortgage with the notary public as part of the transfer of ownership didn’t bring a check but a non-payable letter of agreement between the bank holding the old mortgage and mine.
There aren’t places where individuals can take checks and cash them for a fee, as so many people do in the US. Companies often give “IOUs” to each other, representing the will to pay a given amount on a given date: banks will buy those from the recipient, paying less than the IOU’s amount; this is available only for companies (including the self-employed), though.
Well, you can do the same in France, obviously (although it if it were a large amount, I’m not sure you could withdraw it until the check has cleared), but if you don’t have an account, there’s no way to cash the check.
And checks are much more common here than they seem to be in Spain (used for bills, groceries, etc…) while electronic transfer are rarer. For instance, my mother and I will typically send checks for the birthday of my nieces and nephews. Only one get an electronic transfert because otherwise she never deposits the check or does it months later. So, electronic transfers between individuals are more the exception than the norm in France (not for regular payments like salaries, utility bills, rents and the like where transfers are more common since you do it once and then can forget about it).
Not true. The line of figures at the bottom of each U.S. bank cheque is the “routing number” (bank identifier) and account number in standardized format.
That really wouldn’t be a problem if they wanted to implement a country wide transfer system. They would simply need to allocate each account hosting centre (branch?) a code number. The account number would just be a tag until it reached the bank where the account was held - there would be no need for the accepting bank or any intermediaries to understand it’s format (although it would be a simple matter to link each branch to a format descriptor so that the system that sender uses could at least validate the format of the account number.
It’s really surprising to learn that the US banking system is so stuck in the last century.
Cheques are a countrywide transfer system. The numbering code at the bottom of a cheque is standardized.
There’s another thing that people are missing here. A cheque is a negotiable instrument. That means that the bearer is allowed to transfer it to another person just by endorsing it. That allows a the holder to obtain cash or anything else in exchange for transfer.
Direct electronic transfers aren’t negotiable and you can’t get them in cash unless you go to the bank.
Anyway, it seems to me that as the receiver of money, I’d prefer that the person paying me give me a cheque with his or her account number on it instead of my handing out my account number.
As has been stated, a check may be negotiable in the US, but it is not in many (all?) European countries. A UK cheque made payable to me can be paid only into my bank account.
It seems to me that you are making a decision based on implementing only part of a European-style system. I, too, would not want to give out my account numbers if it left me potentially exposed, as it does in the US (although those numbers are on every check). However, in Europe you are not exposed to the danger of having your account emptied. So the proper choices are:
Insecure account and get paid by check.
Secure account and get paid by direct transfer.
I prefer 2) as then I get the money immediately and I don’t have to go to the bank/ATM to pay it in.
With a transfer you get the money in your account instantly and can transfer it to someone else instantly, so negotiability really isn’t an issue.
If you actually need cash for some reason you can get it from your bank or any ATM.
On the other hand, they are the ones with the money.
But, seriously, not wanting to give someone the information they need to pay you is nothing more than paranoia.
It’s hard to believe that the US is going to stick with such outmoded practices when the rest of the developed world has moved so far on.
There were people in Europe who thought they didn’t like the idea of losing cheques but now the majority have realised that they are just an anachronistic nuisance.
There’s no telling what the US system will change to in the future. It may very well come to be something more like the European system at some point in time. As I said, we already have electronic funds transfer for many other kinds of transactions.
I’m just describing the system as it exists today.
For the purposes of inter-bank transactions, they are standardized. There is a set number of digits and no hyphens. 9 digits for the routing number, 13 for the account number, and 4 for the cheque number.
Banks can do whatever they want internally , but when they are dealing with other banks, they use the standardized form. My bank uses a 7-digit account number internally, but pads it out to 13 for all external purposes.
The number of banks here has reduced drastically in recent decades (and more so in recent years). Many building societies [trans: S&L association] converted into banks in the '80s and '90s; none of those banks remain independent today, they all got swallowed up by bigger (mostly foreign) ones.
I seldom write a cheque any more - mostly it’s to pay a club or society by mail.
It’s pretty much impossible to function now without a bank a/c. Even recent immigrants will have to get one.
‘Giro’ and ‘girocheque’ were two different things but were often confused in the public mind as being the same. The word ‘giro’ is little used here now - it is associated with poverty and welfare dependence
