As I just checked my account to see whether a corporate check had posted yet that I deposited on FRIDAY (it hasn’t), I have to ask - why?
Why is it that checks aren’t instantly credited and deducated through electronic means? We have the ability to do insta-checks on a written cheque to see if there are funds available - why must we wait absurd amounts of time for checks to “clear?” This seems like the type of garbage that should have gone out in the seventies.
Why is it that if I deposit a check after five - an arbitrary time - it changes EVERYTHING about when that check is credited to my account? There is no logical difference between me depositing that check at 4:55 and 5:05, other than that it makes the difference between that check being credited at midnight (4:55) vs. several DAYS later (5:05). That’s absurd! What the hell is going on?
Why is it that checks won’t credit to my account on HOLIDAYS? What does the holiday have ANYTHING to do with electronic funds that are being shifted around with absolutely no human involvement?
Why, why, why? Are there any steps being taken to bring up the modern banking system to at least a 1960’s level!?
Basically a very big decentralised banking industry that finds it difficult to implement industry wide systems on the one hand and can get away with treating its customers like serfs on the other.
Smaller, more centralised systems in Scandinavia and elsewhere in Europe have reached a level of sophistication the US can only dream of (think instant money transfers, full integration between banks and all the major billing companies, etc.), because there are only a handful of banks who need to agree on something, and because customers there are a bit more demanding.
While the US banks are undoubtedly coining it curtesy of being able to punt your money on the short-term markets for a few days before giving you access to it, I suspect the key driver is that every little podunk town and state in the US seems to have it’s on little bank - bit of a nightmare when trying to agree standards and implement systems.
I suspect it’s more a cultural thing than an efficiency thing. For instance, Germans seem to never use cheques, either (and don’t accept them in payment, either). On the other hand they pay in cash for ungodly large amounts (that due to their insistence that we have this 500 € bill that I never even saw), while in other countries, you’d suspected to belong to the mafia or somesuch if you tried to do the same. Here, for some reason, few people use CC. Instead, we all use debit cards. And you’d be laughed out of the shop if you tried to use plastic to pay for a too small amount, like some euros. I never heard of someone getting his “paycheck” with a cheque or cash. It’s always money transfer/wiring. On the other hand, plenty of people pay their groceries with cheques. And so on…
I won’t say this is always the case (or even usually the case) but the deadline is sometimes to make sure that there is enough time to get all of the day’s checks and deposit slips together to meet a courier deadline. The tickets have to be transported to a Proof department and (depending on the bank) manually encoded with the appropriate dollar amounts (or an amount they think is close enough :rolleyes: ) before the bank’s mainframe system clocks over to the next business day (or the night shift goes home, whichever comes first). If they start allowing 5:05 as being close enough then the next person in line will say “If 5:05 is close enough then my 5:06 is too.” And 5:07 and 5:08… Eventually it gets to the point that they risk missing their courier schedule and NOBODY will get credit.
With Check 21 there is the potential that deadlines will be moved to a much later time because when you present a check to the teller s/he will put the check in a little scanner on the desk and by the time your ID has been checked the deposit will already be sitting on your account. But as we know banks are very (very, very, very, very) slow at embracing new technology, especially if they can’t prove that it will save them big money in a very short period of time.
That’s because checks are not a money transfer. It is in a way a message from Person A, instructing the financial institution to let Person B do anything he wants with a specified amount of money from Person A’s account. Let’s keep checks what they are, and use wire transfers and such for what they are intended for.
Essentially what I am saying is: To honor a check a bank has to verify that it is Person’s A check, that they have the funds, that Person B is person B and can accept the funds (not even talking about Person C whom the check can be written out to by Person B). It’s just not that easy.
There is also the fact that the check writer’s bank has a certain period of time to say “bullsquit!” after the bank that the depositor stuck the money in presents the money for payment.
Sometimes banks take the maximum amount of time to dishonor a check.
Maximum holds minimize fraud losses.
I’m sure the security director at most banks would readily admit he could cut fraud losses to a bare minimum with a 45 day hold on everything.
Of course, 45 day holds are illegal unless the bank looks at the check and sees something tragically wrong when it’s first presented.
Thus, banks have to settle on a middle ground between safe (which is impossible for a bank) and legal/convenient (legal is possible, but convenient is incompatible with safe).
Makes the security director’s job that much easier! If you can get rid of customers, tellers and branch managers you’ve dramatically lowered your chances of sustaining a loss!
Think of all the money you could save on payroll!
Let’s email this thread to Bank of America. Some PHB might actually consider it.
I reallize you say that somewhat tongue-in-cheek, but there are “banks” that serve very minimal functions. See ING Direct. Granted this is part of a larger banking company, but this division only does wire transfers to, from, and between its savings and CD accounts. This allows them to have higher interest rates than many local banks.
In the USA, many people cannot even get checking accounts. The banks don’t want to give you one unless they can be reasonably sure you aren’t going to screw up with it. This is why you can see check-cashing businesses here, esp. in poor areas. Where my father works in Mexico (Cd. Juarez), nearly everyone is payed in cash.
Everyplace I go to in Mexico says “no personal checks accepted” (except written in Spanish). I didn’t even know there were such things as checks here. FWIW, all of the hourly employees I’ve ever seen in Mexico are paid direct deposit and have debit cards to the in-plant bank ATM machines. Keep in mind these are big megacorporations.
This leaves cash, credit cards, or bank transfers to pay for everything else.
We pay our maid in cash; I think the gate guard is probably paid in cash; the fumigator in cash; gardener in cash; taxis in cash. What really sucks is no one ever has change and the ATM’s give out $500 peso bills anytime you want more than $500 pesos.
Not nearly enough people take credit cards – you’d think gas stations would be an obvious choice, but no.
Many business are too fscking cheap to accept credit – or they add on a surcharge. If I were in the States, I’d complain to Mastercard, but I don’t know if that works down here. Maybe I should just complain anyway any time there’s a surcharge. And some businesses are too cheap to even accept credit cards - period. You have to make a wire transfer to their bank!
I don’t usually have this problem, but I have a related one. My spending usually is reflected in my “Available Balance”–I can see the dollars missing–but it doesn’t tell what it was actually for, in some cases, for two weeks or more. And this is usually with a merchant who has electronic cc processing.
Fortunately, though, for the most common situations like grocery stores, I’ve never had this problem.
What kind of tax system does Mexico have? In the USA, paying everyone in cash would result in holy hell over un-withheld income taxes, social security taxes, etc.
Not necessarily. You can draw the taxes/premiums from the payroll account itself and actually hand out to the employee in cash just the “take home pay” part.
A system replete with income tax evaders. The current president has done an excellent job of trying to stop this, by way of increasing consumption taxes on lots and lots and lots of things. Get an official receipt with your income tax card, and that tax is 100% deductible from your income taxes. So, no net increase in taxes, but you catch all the losers that don’t pay taxes at all. Given the awful history of the government previous to the current administration, though, I can’t say I blame too many people for not wanting to pay their taxes.
I think I’m probably an income tax evader right now. I know that my company is supposed to be paying my income tax now while I’m here, and we had this huge program with a tax company, and we’re supposed to have theoretical taxes withheld, and receive a tax equalization program, and some big long complicated spiel. In short, my paystubs are just like they were in the USA, and I’m paying taxes to Uncle Sam and that Canadian whench, so I just hope my company’s taking care of Mr. Fox.
