Wiring money: question about European vs. U.S. Banks

This may seem to be a mundane question, but apparently people in Europe (like Germany) wire money to each other’s bank accounts frequently - and the fees must be minimal because it’s such a commonplace thing.

Here in the U.S., wiring money somewhere incurs huge fees ($20 per wire at my own bank) - I don’t understand why we are so different in this respect.

So I have to wire a small amount ($10) to someone in Germany, and I’m looking for an online service that will let me do it for a reasonable rate. I can’t find one, because Western Union (and other services like it) only wires to its own locations.

I can’t do anything but wire this money because it’s for an ebay auction, and I missed the part in the description that says they only accept wire transfers to their bank account (unheard of in the U.S.). I nicely asked to use Paypal or a traveler’s check, and they only accept wire transfers so I’m stuck. They gave me a BIC number, in response to my question about other methods but that doesn’t help me because I haven’t clue what that is either.

The Ebay seller is legit, from the number of items they’ve sold in the past. It’s for such a small amount (8.99 EU) I cannot think it’s a scam.

I’m trying to find the cheapest way to do this. Anyone have any ideas and maybe a description of what a BIC number is?

Within European countries, inter-bank transfers are mostly free. And things are very very slowly improving between Euro countries.

Germany is a rather separate problem. I started a thread a few months ago on a not-dissimilar topic, about eBay in Germany. Basically, the German credit/debit card system is very different from most other countries. On the one occassion I bid without realising they were asking for wire-only, I ended up sending Euro cash registered post (which was cheaper than wiring, and probably still would be from the US). Cash through the post, although obviously 100%-sender-risk, is actually rarely a problem.

That sounds like my exact situation. I’m not sure they’re going to accept cash through the mail though. They didn’t want American Express traveler’s checks, which are as good as cash.

Questions:

  1. Am I going to be able to buy Euros here in the U.S. to send?
  2. Does U.S. registered post work for overseas letters?

That is, if they accept cash in the mail. There must be some weird reason they only want wires, although I can’t think of what it could be.

Actually the EU has taken steps to force banks to charge payments between different EU countries the same as in a single country. I’m not sure whether legislation is already in force, but my bank has already corrected it’s rates.

Travellers cheques can only be cashed by the person who buys them (you sign them once when you get them, and again when you cash them in another country), so they’d be useless for this situation.

It shouldn’t be a problem buying Euros in the US, unless you’re in reall redneck territory :wink: …no idea about registered mail from the US, but I doubt it’s a problem…as for sending cash, it’s probably not permitted, in that the companies involved don’t want to be involved handling cash and you can’t complain to them if it vanishes. But if you don’t tell them what’s in the envelope, they don’t know.

They want wires for the simple reason that US and UK ebayer sellers use Paypal. It’s convenient.

I think there is no real reason. Have you explained your problem, or just asked for alternative methods?

The problem is, within Germany this is virtually the only way it is done, not just for eBay but all kinds of bills. This service is free or costs a few cents. Paypal and similar services never caught on. Probably they just take it for granted and can’t imagine a life without almost free “Überweisung”.

Yes I told them it would cost me $20 to send $10 and could I please send Euros via Paypal. This was their response:

"tut uns Leid, aber wir akzeptieren kein PayPal, Sie können unsere BIC / IBAN - Nummer für die Überweisung haben "

In other words “sorry, but no”.

What the heck is a BIC/IBAN number?
The only thing I can think of is they don’t want to take the few minutes it takes to accept Paypal payments (costs them nothing) and send it on to their bank.

The ironic thing is that Paypal.de now has the capability to wire money into a bank account, but I can’t access that function because when I hit the “Send money” button in german, I get bumped into my american Paypal site which doesn’t have that option.

BIC is an internationally standardized bank identification code (also referred to as the SWIFT address of the bank), and IBAN is an internationally standardized bank sorting code plus bank account number plus checksum. These are routinely used for bank transfers between accounts in different European countries (for transfers between bank accounts within the same country usually shorter codes are used.)

Here’s my previous thread about Paypal in Germany. Yes, some of their attitude simply seems to be an aversion to using something very different to anything they’ve used before. If it’s a major seller, then maybe (very tactfully) explaining that it’ll make them much more attractive to teh US market may help. (Or it may not…)

IBAN = International Bank Account Number, and BIC - Bank Identifier Code. Both ways of identifying individual banks internationally. BICs are also known as ‘swift codes’. AFAIK, they’re both restricted to Europe.

you could try finding a german that a) has paypal and b) is willing to wire your money for you inside of germany.

:confused:

Unless European travelers checks are markedly different from American ones, they are able to be accepted for payment by anyone.

The purchaser signs the check when it is purchased. The purchaser then makes it payable to the vendor (“Kein PayPal Bitte, GmbH”) on the “Pay to the order of” line and countersigns it. Surely you aren’t implying that European travelers checks are only payable to the person who purchased them. What would be the use?

They aren’t a lot of use, which is why they aren’t very common.

As I understand it, traveller’s cheques are useful in the US because, historically, at any rate, merchants were unwilling to accept a cheque drawn on an out-of-state bank. If you were travelling within the US, your personal cheque was not accepted, and travellers cheques were a safer alternative than cash.

The same situation didn’t really apply in Europe. Each European country has a national banking clearing system, so a cheque drawn on any (say) German bank is acceptable anywhere in Germany. If you were travelling outside Germany you might take travellers cheques, but you would cash in a bank at your destination for local currency and then spend the currency. In theory you could offer them to a merchant in lieu of cash but there was no tradition of doing so, and most merchants would be reluctant to accept them, if only for the reason that the onus would be on them to verify your identity and signature, and they wouldn’t have this complication with a cash transaction. In addition, if you were travelling to several European countries you would, until recently, have needed to bring cheques in several different currencies if you wanted to spend them in shops. And with travellers cheques you have to pay in advance, you lose interest on your money and you pay a commission. The charges are lower with credit cards, and you settle the bill in arrears. All in all, travellers cheques are not that popular either with travellers or with merchants.

Now that we have the euro, but no eurozone-wide cheque clearing system, the same conditions prevail as in the United States, and you might expect to see travellers carrying euro-denominated travellers cheques and spending them in shops. In practice this won’t happen, I guess, because credit cards are already an established and effective method of spending while travelling to other countries.

I see. Fascinating. I had assumed that the switch to a single currency would be accompanied with a switch to a more unified check-acceptance system. Although I suppose that the lack thereof may be in the interest of the banks – checks are a hassle to process as opposed to card transactions, so they have motive to discourage their use.

The reluctance to accept out-of-state checks does not currently arise from the lack of a central clearing house (AFAIK) but from the difficulty in verifying the existence of funds in small out-of-state banks and in obtaining payment for worthless drafts drawn on distant banks by customers with out-of-state addresses. Our check-clearing process does not involve any single processor, but most merchants use one of several large intermediaries, who speed the process up compared to 20 - 30 years ago.

IME as a retail monkey, travelers checks are becoming less rare, following the trend of checkwriting in general. As more people move to using their debit cards (Visa or MasterCard branded cards that are tied to a checking account – as opposed to our older-style ATM cards, which were not universally accepted), banks are increasing the fees tied to checkwriting by their customers, thereby encouraging the use of debit cards. My work life would be greatly simplified if customers were to stop using checks altogether, because of the processing tied to check acceptance as opposed to debit card use. Some retailers here run checks accepted at point-of-sale through a terminal that converts them into electronic debits – the check is then cleared through the bank immediately, marked “VOID” and handed back to the customer; or denied due to lack of funds. Either way, the retailer never gets a returned check with this system. I’m more than a little envious.

Actually, there was a somewhat unified acceptance system at least for some countries, the eurocheque, independent from the EU or the Euro, but for practical purposes the system ended in 2001.
At least in Germany checks are pretty much dead now. You can still get checks at your bank on request, but you will hardly find any one who accepts them. I am so young that I missed checks entirely. I remember my parents using them, but I never used a single one.

You’d think so, wouldn’t you? It hasn’t happened yet. Banks still levy hefty charges for collecting foreign cheques, even if they are denominated in euros. But I think the European Commission is putting pressure on the banks to improve eurozone clearing.

But of course the growth of credit, debit and ATM cards means that there isn’t the need for cheque clearing that there used to be. Very few people would actually send a cheque from (say) Poland to Portugal when they could make payment by other means, so the number of cheques cleared would be small and the unit cost of clearing a cheque would be high. At the moment the drawer of a cheque pays a few cents, which cover the cost of clearing domestically – the payee pays nothing for clearing. If there were to be a unified eurozone clearing system, I guess the average cost of cheque clearing would rise. The EU would not tolerate different changes for clearing domestic cheques and other eurozone cheques.

This problem is solved with the use of a cheque guarantee card, which your bank issues. It carries your signature and if you present it to a merchant with your cheque, he is guaranteed that your cheque will be honoured up to a limit of about €500, if I recall. If you have insufficient funds, that’s between you and the bank; the cheque will be honoured. The same card usually functions as an ATM card and a debit card. Banks routinely issue them to all their customers who are not known to be problem customers.

BTW if the recipient of the money is willing to expend a bit of extra effort paying by a check drawn on an US bank may be less expensive than wiring. I paid a check for about 120 USD, drawn on a US bank, into my current account a few months ago and the processing fee was about 12 EUR. Of course the processing fee was paid by me and the risk of the check bouncing was mine, so the recipient would have to be cooperative.

Other alternatives would be:

  • sending cash by registered letter (German Einschreiben/international Recommandé). For a bit more security you can specify that the letter only be handled to the named person (rather than e.g. a family member). The designation for that is Eigenhändig/international A remettre en main propre. You can also require a receipt to be mailed back to you (Rückschein/international avis de réception). I don’t know the USPS terms for these last two services but they should be familiar with the internationally standardized (French-language) terms.

  • the seller shipping to you by international COD (German: Nachnahme).

Yes, the standard use of travellers cheques is somewhat different, the principle being that the first signature was when you bought the cheques, and the second in front of the cashier accepting them - all they needed to do was confirm the signatures match, and they know you’re the true owner of the cheques. In addition to UDS’s points above, they had an extra security advantage in that stolen cheques could be identified by number (a record was made when you bought them), and stolen numbers were circulated efficiently and quickly throughout Europe. They pretty much died out with the growth and increased compatibility of ATM cards.

Ok, I’m going to offer him cash. Can you think of a reason he wouldn’t accept?

Also, will I be able to buy Euros here in the U.S.?

Thanks,

I think it’s peculiar to Germany. At least, I’ve been told for a long time that essentially nobody would accept a personnal check in Germany. I wonder if it could be related to the custom of using cash, even for rather large payments.
In France, though less and less so, personnal checks are, and have always been commonly used. I guess, from reading various threads (for instance pit threads about people paying their groceries with checks), more than in the US. On the other hand, concerning traveller’s, it’s the same than in Germany. Essentially nobody would accept them as payment, and you’d have to cash them at a bank (paying a fee in the process). I used once traveller’s in my life, in Portugal, because my cash and card had been stolen. For me, traveller’s are only a back up in case I would run into trouble in some foreign country, like in this case.
Each country has its peculiarities. For instance, few people use or even have credit cards, over here. Most people use a debit card instead. Seems to be very different in the US, for instance.

As long as you tell him you’ll send it registered mail, and preferably with a tracking number of some sort, and assure him you take the responsibility for the mail going astray, then it’s unreasonable of him to say no. IMO. But then again, he’s German ;)…