Online billpay is so cool
October 27, 2022 12:09 PM Subscribe
Where have all the checks gone? I'll tell you! There's this secret feature credit unions and banks in the US have, hidden behind the obscure nomenclature of "online bill pay." Your financial institution of choice will cut a physical check and put it in an envelope and address the envelope and put a stamp on it and drop it in the mail and typically they don't even charge you for the check, the envelope, the ink, their time, or the stamp! The postal carriers carry on carrying, and then someone else receives the check in the mail!
I like it better than knowing a company like visa/mastercard/paypal is getting paid to be in the middle. My theory is that credit unions and banks like this feature because if you do recurring online billpays, they can predict exactly when your money will be outbound.
posted by aniola at 12:11 PM on October 27, 2022 [3 favorites]
posted by aniola at 12:11 PM on October 27, 2022 [3 favorites]
And on the receiving end of those physical bill pay checks might very well be a human being trying to figure out how to match that payment up with someone who may or may not already be in the company database.
For the love of all that is holy, if you're going to use bank bill pay please make sure your contact information that's on the check, as well as any member account number you might include, matches what the recipient has in their system.
posted by wondermouse at 12:16 PM on October 27, 2022 [13 favorites]
For the love of all that is holy, if you're going to use bank bill pay please make sure your contact information that's on the check, as well as any member account number you might include, matches what the recipient has in their system.
posted by wondermouse at 12:16 PM on October 27, 2022 [13 favorites]
I use this all the time. If I have to put a stamp on anything it's not getting mailed. If I can enter that info into my bank's portal I at least know the lights are staying on.
posted by spikeleemajortomdickandharryconnickjrmints at 12:21 PM on October 27, 2022 [3 favorites]
posted by spikeleemajortomdickandharryconnickjrmints at 12:21 PM on October 27, 2022 [3 favorites]
I also did that job for a time & the bill pay checks were the best because you could actually read the writing on them.
posted by bleep at 12:21 PM on October 27, 2022 [14 favorites]
posted by bleep at 12:21 PM on October 27, 2022 [14 favorites]
Immensely less hassle, more financial safety, and no trouble should there be a credit-card snafu such as Somebody Else's Security Breach. I'm a huge fan of online bill pay.
posted by humbug at 12:22 PM on October 27, 2022
posted by humbug at 12:22 PM on October 27, 2022
For the love of all that is holy, if you're going to use bank bill pay please make sure your contact information that's on the check
...except when it's a donation to one of those non profits who will figure out how to share your address and you don't want a lifetime supply of address labels in your physical mailbox.
posted by aniola at 12:24 PM on October 27, 2022 [6 favorites]
...except when it's a donation to one of those non profits who will figure out how to share your address and you don't want a lifetime supply of address labels in your physical mailbox.
posted by aniola at 12:24 PM on October 27, 2022 [6 favorites]
Online bill pay is OK, except that the money is withdrawn from your account at the time the payment is initiated and held in escrow by the bank for a number of days, rather than just debited when the check is deposited by the recipient like a regular check. I presume the banks make money on this float somehow. On top of anything they charge for the service.
Banks used to provide direct access to ACH ("automatic clearing house") -- direct account-to-account interbank transfers ("e-checks"). Without having to use Zelle (which is under investigation for I forgot what now). That rocked, but it appears to be gone from retail accounts at all major banks.
Some vendors will let you pay by initiating an ACH from their side, usually called EFT ("electronic funds transfer") but if anything goes wrong with that arrangement it can result in multiple penalties on both sides, as it's effectively a bounced check that will likely get resubmitted a few times.
posted by snuffleupagus at 12:26 PM on October 27, 2022 [5 favorites]
Banks used to provide direct access to ACH ("automatic clearing house") -- direct account-to-account interbank transfers ("e-checks"). Without having to use Zelle (which is under investigation for I forgot what now). That rocked, but it appears to be gone from retail accounts at all major banks.
Some vendors will let you pay by initiating an ACH from their side, usually called EFT ("electronic funds transfer") but if anything goes wrong with that arrangement it can result in multiple penalties on both sides, as it's effectively a bounced check that will likely get resubmitted a few times.
posted by snuffleupagus at 12:26 PM on October 27, 2022 [5 favorites]
This post is so wholesome! Online bill-pay has quite literally saved my financial ass. As someone with ADHD, I had so many accounts be past-due, or even go to collections, just because sending checks in was so stressful. Keeping track of my checkbook, writing a check with all the right info, finding a stamp and an envelope, mailing it in, every single month?? And direct debit always seems so much more reliable than paying via credit card or even debit card. Getting most of my accounts set up for this was probably responsible for at least +70 points on my credit score.
Until just a few years ago, rent was the only bill I still had to pay with a paper check. But now I can do that through my bank too. I don't even own a checkbook anymore!
posted by lunasol at 12:28 PM on October 27, 2022 [12 favorites]
Until just a few years ago, rent was the only bill I still had to pay with a paper check. But now I can do that through my bank too. I don't even own a checkbook anymore!
posted by lunasol at 12:28 PM on October 27, 2022 [12 favorites]
Online bill pay is OK, except that the money is withdrawn from your account at the time the payment is initiated and held in escrow by the bank for a number of days, rather than just debited when the check is deposited by the recipient like a regular check. I presume the banks make money on this float somehow. On top of anything they charge for the service.
You may want to consider a different bank. None of this is true with my credit union.
posted by xedrik at 12:31 PM on October 27, 2022 [18 favorites]
You may want to consider a different bank. None of this is true with my credit union.
posted by xedrik at 12:31 PM on October 27, 2022 [18 favorites]
Online bill pay is OK, except that the money is withdrawn from your account at the time the payment is initiated and held in escrow by the bank for a number of days, rather than just debited when the check is deposited by the recipient like a regular check. I presume the banks make money on this float somehow.I was once in a pickle over this -- the recipient somehow did not receive the check, but the amount of the check had already been withdrawn from my account. Stopping payment and getting everything sorted out was surprisingly difficult through my credit union. But that's like... one problem in 10+ years of online bill pay? I can live with that.
posted by rouftop at 12:33 PM on October 27, 2022 [1 favorite]
You may want to consider a different bank. None of this is true with my credit union.
Amen. Credit Union until I die.
posted by Abehammerb Lincoln at 12:33 PM on October 27, 2022 [17 favorites]
Amen. Credit Union until I die.
posted by Abehammerb Lincoln at 12:33 PM on October 27, 2022 [17 favorites]
It's like that at every institution I've banked at. I may call a few local credit unions and inquire, I had presumed it's how the service is paid for. Which isn't the worst thing, but it does practically mean you need to be at least a paycheck ahead of your obligations.
posted by snuffleupagus at 12:33 PM on October 27, 2022
posted by snuffleupagus at 12:33 PM on October 27, 2022
I had the same reaction as xedrik, and went to check on mine as well, and simply not the case that money is held in escrow when I use online billpay. (USAA)
posted by slide at 12:33 PM on October 27, 2022 [4 favorites]
posted by slide at 12:33 PM on October 27, 2022 [4 favorites]
except that the money is withdrawn from your account at the time the payment is initiated and held in escrow by the bank for a number of days, rather than just debited when the check is deposited by the recipient like a regular check.
Thia could be a bonus for those who have sent checks to people who take forever to cash them, but also share the account with someone who doesn't check the physical checkbook to confirm how much money is actually available to spend, relying on the balance shown when you log in.
posted by ghost phoneme at 12:34 PM on October 27, 2022 [1 favorite]
Thia could be a bonus for those who have sent checks to people who take forever to cash them, but also share the account with someone who doesn't check the physical checkbook to confirm how much money is actually available to spend, relying on the balance shown when you log in.
posted by ghost phoneme at 12:34 PM on October 27, 2022 [1 favorite]
It was amazing when my bank contacted me to say that no one cashed the paper check that they sent out after a few months. The payee had moved and I didn't update the information. If I sent it out myself, I would never notice, and accumulated more late fees.
It's such a strange feature when more modern forms of payment instantly tell you when they succeed/fail, but I'm happy it exists.
posted by meowzilla at 12:37 PM on October 27, 2022
It's such a strange feature when more modern forms of payment instantly tell you when they succeed/fail, but I'm happy it exists.
posted by meowzilla at 12:37 PM on October 27, 2022
If it showed as pending and reduced the available balance once mailed, like a physical check during its clearing period, that would totally be expected and make sense. I'd have to go check (heh) to make sure but I think at the two major and one regional bank I mostly use, the funds actually exit my account and go to some numbered clearing account when the check is mailed.
I guess maybe there's another upside there, in that my account number probably isn't on the mailed check.
Again, not a huge deal. I still like using it. But it's something to be aware of, if your bank does it that way.
I do miss ACH access regularly, Zelle sucks.
posted by snuffleupagus at 12:38 PM on October 27, 2022 [2 favorites]
I guess maybe there's another upside there, in that my account number probably isn't on the mailed check.
Again, not a huge deal. I still like using it. But it's something to be aware of, if your bank does it that way.
I do miss ACH access regularly, Zelle sucks.
posted by snuffleupagus at 12:38 PM on October 27, 2022 [2 favorites]
Related, when I do mobile check deposit in my bank's mobile app - it always seems to take a random number of seconds before it comes back to say accepted. I assume somewhere there is a low paid BPO worker offshore looking at the image I uploaded with my phone's camera, on screen versus what I type in the app to make sure it matches and that the image is clear before they approve it. I mean the Bank could be using a fancy image scanning tool....but the timing (sometimes up to a minute) makes me just assume it is a human doing a comparison. Mechanical-turk style. It makes me feel a little sad. One day I should upload a smiley face thankyou, but I guess I'd break someone's workflow.
posted by inflatablekiwi at 12:40 PM on October 27, 2022 [4 favorites]
posted by inflatablekiwi at 12:40 PM on October 27, 2022 [4 favorites]
On top of anything they charge for the service.
Anyone whose bank wants to charge them for online billpay should know that I've never heard of anyone being charged for this service, and never been charged for it.
My personal experience is only with credit unions. I tried a bank once and they charged me fees and I was like, "what, I didn't do anything wrong!" and they were like "sure, but there's hidden fees for everything!" and I was like "byeeee" and never looked back.
posted by aniola at 12:41 PM on October 27, 2022 [5 favorites]
Anyone whose bank wants to charge them for online billpay should know that I've never heard of anyone being charged for this service, and never been charged for it.
My personal experience is only with credit unions. I tried a bank once and they charged me fees and I was like, "what, I didn't do anything wrong!" and they were like "sure, but there's hidden fees for everything!" and I was like "byeeee" and never looked back.
posted by aniola at 12:41 PM on October 27, 2022 [5 favorites]
I presume the banks make money on this float somehow. On top of anything they charge for the service.
Considering they're probably paying you 0.01% on your interest-bearing checking, if you even have interest-bearing checking, they've already captured the vast majority of the value there.
posted by praemunire at 12:42 PM on October 27, 2022 [6 favorites]
Considering they're probably paying you 0.01% on your interest-bearing checking, if you even have interest-bearing checking, they've already captured the vast majority of the value there.
posted by praemunire at 12:42 PM on October 27, 2022 [6 favorites]
"For the love of all that is holy, if you're going to use bank bill pay please make sure your contact information that's on the check, as well as any member account number you might include, matches what the recipient has in their system."
Well, that can be a problem. It's their system.
You would think that wouldn't be a problem until you track down why a first time payment didn't go through to a small medical provider and find out that they expected a certain chopped off version of their name on the payment. Small data field in their database? Who knows.
posted by aleph at 12:43 PM on October 27, 2022 [4 favorites]
Well, that can be a problem. It's their system.
You would think that wouldn't be a problem until you track down why a first time payment didn't go through to a small medical provider and find out that they expected a certain chopped off version of their name on the payment. Small data field in their database? Who knows.
posted by aleph at 12:43 PM on October 27, 2022 [4 favorites]
I've been using this for basically my entire adult life.
For the life of me, I can not understand people who voluntarially hand over their checking account ACH details to businesses with whom they have an account. "Here's my checking account -- go ahead and take whatever you think you need each month. If there's a problem, I'll let you know."
????
posted by neuracnu at 12:49 PM on October 27, 2022 [7 favorites]
For the life of me, I can not understand people who voluntarially hand over their checking account ACH details to businesses with whom they have an account. "Here's my checking account -- go ahead and take whatever you think you need each month. If there's a problem, I'll let you know."
????
posted by neuracnu at 12:49 PM on October 27, 2022 [7 favorites]
You would think that wouldn't be a problem until you track down why a first time payment didn't go through to a small medical provider and find out that they expected a certain chopped off version of their name on the payment. Small data field in their database? Who knows.
Or they make a typo on their account ID number, and it happens to be somebody else's account ID number, so the payment gets credited to that other person's account. Oops.
posted by wondermouse at 12:57 PM on October 27, 2022 [1 favorite]
Or they make a typo on their account ID number, and it happens to be somebody else's account ID number, so the payment gets credited to that other person's account. Oops.
posted by wondermouse at 12:57 PM on October 27, 2022 [1 favorite]
assume somewhere there is a low paid BPO worker offshore looking at the image I uploaded with my phone's camera, on screen versus what I type in the app to make sure it matches and that the image is clear before they approve it.
No, that would take too long and be too expensive. There’s (probably, still) an algorithm that is making sure it’s probably a check, optical character recognition of the routing and account numbers printed on the check, and then a spot check by humans of some percentage of check images. So it’s possible that if you didn’t write “for mobile deposit only” and endorse the check on the back, your check could actually be rejected and the funds returned.
Don’t forget to slam that subscribe button for more possibly out of date American banking facts!
posted by chesty_a_arthur at 1:02 PM on October 27, 2022 [8 favorites]
No, that would take too long and be too expensive. There’s (probably, still) an algorithm that is making sure it’s probably a check, optical character recognition of the routing and account numbers printed on the check, and then a spot check by humans of some percentage of check images. So it’s possible that if you didn’t write “for mobile deposit only” and endorse the check on the back, your check could actually be rejected and the funds returned.
Don’t forget to slam that subscribe button for more possibly out of date American banking facts!
posted by chesty_a_arthur at 1:02 PM on October 27, 2022 [8 favorites]
A company I worked for offered discounts for doing ACH withdrawals. When I would explain this to customers they would say "I already pay you electronically through my bank's online check paying service." And if I had a nickel for every time I had to explain to customers that their banks were not paying us electronically and were in fact sending us checks, well, I'd be doing very well. Thankfully many of the customers were appalled and switched to ACH to cut down on paper and petrol waste.
posted by terrapin at 1:14 PM on October 27, 2022 [2 favorites]
posted by terrapin at 1:14 PM on October 27, 2022 [2 favorites]
I wouldn't be surprised if they don't do anything at all with the check images, and rely 100% on the numbers that it reads (and you confirm) from the check. If you confirm the wrong numbers, it's your fault. It's never the banks'.
posted by meowzilla at 1:14 PM on October 27, 2022
posted by meowzilla at 1:14 PM on October 27, 2022
"Or they make a typo on their account ID number, and it happens to be somebody else's ..."
Naah. I ended up calling and talking to someone about their second bill saying the first didn't make it. I got a nice lady that took my credit card for the two payments and when I expressed surprise about it asked me if I was sure I only did ****** (or something like that) of their name on the payment. Apparently the problem there was well known.
posted by aleph at 1:26 PM on October 27, 2022 [1 favorite]
Naah. I ended up calling and talking to someone about their second bill saying the first didn't make it. I got a nice lady that took my credit card for the two payments and when I expressed surprise about it asked me if I was sure I only did ****** (or something like that) of their name on the payment. Apparently the problem there was well known.
posted by aleph at 1:26 PM on October 27, 2022 [1 favorite]
I'm confused as to where the info in the FPP is coming from. I don't see anything on either of the linked pages stating that banks cut a physical cheque to the payee when you make an online bill payment, except a passing reference to the fact that if the payee isn't online (which seems extremely rare, but I guess not impossible) the bank will mail a paper cheque.
Unless I'm missing something, it seems that the vast majority of online bill payments are purely electronic transfers of money and little or no paper is mailed out as a result.
Having said that, it *is* pretty cool and handy that banks will cut a cheque so you can use online billing to pay the rare company that isn't able to access any form on electronic funds transfer (who are these companies? Here in Canada you literally just need an email address or phone number to refence EFT; is US banking really that different?).
posted by asnider at 1:31 PM on October 27, 2022 [2 favorites]
Unless I'm missing something, it seems that the vast majority of online bill payments are purely electronic transfers of money and little or no paper is mailed out as a result.
Having said that, it *is* pretty cool and handy that banks will cut a cheque so you can use online billing to pay the rare company that isn't able to access any form on electronic funds transfer (who are these companies? Here in Canada you literally just need an email address or phone number to refence EFT; is US banking really that different?).
posted by asnider at 1:31 PM on October 27, 2022 [2 favorites]
In the US it's backwards, most things are still paper based.
posted by bleep at 1:45 PM on October 27, 2022 [3 favorites]
posted by bleep at 1:45 PM on October 27, 2022 [3 favorites]
Not having read TFA, I know there are some payees that my bank sends checks to--if I schedule a payment for the electric bill on a Tuesday, it tells me it will be received on Wednesday. The water bill with the city? Have to schedule it a week before due date to make sure it gets there on time because they're sending a physical check.
IIRC, my Centerpoint (gas) bill also takes extra time. Or maybe it's actually electric. Whatever. I love getting an email with a billing statement, making a few taps on the bank app and then removing the scripted "TODO" label from the email and replacing it with the "PAID" label. 20 years ago I frequently missed payments because I misplaced the bill or forgot to write a check. Today, everything's scheduled to be paid within minutes of receiving the bill.
(It took me three attempts to writepaied payed paid.)
posted by Ickster at 1:49 PM on October 27, 2022
IIRC, my Centerpoint (gas) bill also takes extra time. Or maybe it's actually electric. Whatever. I love getting an email with a billing statement, making a few taps on the bank app and then removing the scripted "TODO" label from the email and replacing it with the "PAID" label. 20 years ago I frequently missed payments because I misplaced the bill or forgot to write a check. Today, everything's scheduled to be paid within minutes of receiving the bill.
(It took me three attempts to write
posted by Ickster at 1:49 PM on October 27, 2022
I use online bill pay for my child support, and since it is going to an individual rather than a company my ex wife does indeed get a paper check each month. There are a few other small payees that get paper checks but that list slowly dwindles as even smaller companies get more of an online presence. Works well unless the mail is delayed but that has been rare in my experience; and she appreciates knowing she will get a check on a certain day without having to remind me.
posted by TedW at 1:49 PM on October 27, 2022 [2 favorites]
posted by TedW at 1:49 PM on October 27, 2022 [2 favorites]
I'm old, so factor that in as you will. About 10-20% of my payments are by check through my Credit Union. It's done when the payee is set up. If they can find it in their (probably 3rd party) database it's done electronically. If not, they cut them a check and give me a field to print some arbitrary message on it.
posted by aleph at 1:49 PM on October 27, 2022
posted by aleph at 1:49 PM on October 27, 2022
For the life of me, I can not understand people who voluntarially hand over their checking account ACH details to businesses with whom they have an account. "Here's my checking account -- go ahead and take whatever you think you need each month. If there's a problem, I'll let you know."
I don't know, in this day and age my fear of my electric utility somehow debiting the wrong amount from my checking account is much less than my fear of a piece of mail getting stolen/stuck in limbo/lost in the postal system.
And of course, ACH details are freely displayed on physical checks anyway.
posted by AndrewInDC at 2:00 PM on October 27, 2022 [17 favorites]
I don't know, in this day and age my fear of my electric utility somehow debiting the wrong amount from my checking account is much less than my fear of a piece of mail getting stolen/stuck in limbo/lost in the postal system.
And of course, ACH details are freely displayed on physical checks anyway.
posted by AndrewInDC at 2:00 PM on October 27, 2022 [17 favorites]
Asnider, it's true. Many to most small businesses don't have any kind of electronic bill pay set up with the back-end providers who provide the infrastructure for online bill pay. So when I pay the plow company, for example, I set them up as a "new payee" but they're not already there the way the gas company is. The bank has no way to send them money electronically! So they cut the plow company a paper check and send it in the mail. I always have to warn the plow company people, because it's in a totally anonymous envelope. I guess most people write them a check from the checkbook, but my checkbook is already used to keep a dresser level so I can't really do that.
posted by chesty_a_arthur at 2:01 PM on October 27, 2022 [3 favorites]
posted by chesty_a_arthur at 2:01 PM on October 27, 2022 [3 favorites]
One of my banks cuts paper checks for everything (it's farmed out to a vendor iirc); the others have a directory of vendors that have ACH destination/payee info on file with the bank and so there's no additional paper check shuffle with those payees.
(What no one lets me do anymore is input arbitrary ACH destination/payee info).
posted by snuffleupagus at 2:01 PM on October 27, 2022
(What no one lets me do anymore is input arbitrary ACH destination/payee info).
posted by snuffleupagus at 2:01 PM on October 27, 2022
For the love of all that is holy, if you're going to use bank bill pay please make sure your contact information that's on the check, as well as any member account number you might include, matches what the recipient has in their system.Especially when the bank starts hiding part of the "Account Number" field on the checks they send out so the recipient only has the last four digits to work with. I ended up putting it in the memo line. It was really frustrating to coordinate my bank and my management company (who happily cashed the checks even though they didn't know who to credit the funds to).
posted by Xoder at 2:02 PM on October 27, 2022
Online bill-pay appears to be a failure of capitalism. It's genuinely more convenient for me and my bank doesn't charge me for doing it.
This is not how I expect things to work.
posted by It's Never Lurgi at 2:11 PM on October 27, 2022 [5 favorites]
This is not how I expect things to work.
posted by It's Never Lurgi at 2:11 PM on October 27, 2022 [5 favorites]
slide: "I had the same reaction as xedrik, and went to check on mine as well, and simply not the case that money is held in escrow when I use online billpay. (USAA)"
I bank with USAA too, and I was told explicitly by an operator that all online bill-payment checks are sent using "guaranteed funds." I have noticed that my available balance is reduced when I issue an online check.
As far as I can tell, only one of my payees receives payments electronically. When I set up a payee, USAA tries to find whether they accept electronic payments, and in most cases, the answer appears to be No.
posted by adamrice at 2:27 PM on October 27, 2022
I bank with USAA too, and I was told explicitly by an operator that all online bill-payment checks are sent using "guaranteed funds." I have noticed that my available balance is reduced when I issue an online check.
As far as I can tell, only one of my payees receives payments electronically. When I set up a payee, USAA tries to find whether they accept electronic payments, and in most cases, the answer appears to be No.
posted by adamrice at 2:27 PM on October 27, 2022
I read the OP and the first reply and I still can't figure out if this is a joke post or who the joke is being played on. We're talking about paying your bills online, right? They don't actually literally fill out a cheque and mail it on your behalf to a company, right? What is going on in here and why is everyone in the thread acting like it was invented yesterday?
posted by chrominance at 2:32 PM on October 27, 2022 [6 favorites]
posted by chrominance at 2:32 PM on October 27, 2022 [6 favorites]
They print it out, but yeah. If you're the recipient they often arrive in the tearoff multifold payroll puzzle-check style.
posted by snuffleupagus at 2:35 PM on October 27, 2022 [2 favorites]
posted by snuffleupagus at 2:35 PM on October 27, 2022 [2 favorites]
They don't actually literally fill out a cheque and mail it on your behalf to a company, right?
Several apartments ago the management company that owned the building was really well-organized but only accepted cash or paper checks. They were not set up to receive electronic payments at all, so yes, when I initiated a rent payment, my bank would mail them an actual check. They only started accepting electronic payments in the last few years (after I moved out).
All my personal bills can now be paid electronically, and I prefer to initiate payment from the bank rather than let companies just take some amount out every month. BUT my workplace still has bills that can only be paid by paper check. If a vendor doesn't appear in our bank's bill payee database (and we're not talking small-fry here; some of them are national companies who probably don't bother with electronic payment because they can scoop up late fees on missing mail), our bank's bill payment service mails them a check. Only one of these checks has been lost in the mail compared with the percentage of ours (that is, issued and mailed by us), so maybe the bank has some kind of hookup with the USPS that makes delivery more reliable. But yes, because the US is a dystopian capitalist hellscape in which it's more lucrative to make it harder to let people give you money, sometimes the bank still mails checks.
posted by Fish, fish, are you doing your duty? at 2:52 PM on October 27, 2022 [1 favorite]
Several apartments ago the management company that owned the building was really well-organized but only accepted cash or paper checks. They were not set up to receive electronic payments at all, so yes, when I initiated a rent payment, my bank would mail them an actual check. They only started accepting electronic payments in the last few years (after I moved out).
All my personal bills can now be paid electronically, and I prefer to initiate payment from the bank rather than let companies just take some amount out every month. BUT my workplace still has bills that can only be paid by paper check. If a vendor doesn't appear in our bank's bill payee database (and we're not talking small-fry here; some of them are national companies who probably don't bother with electronic payment because they can scoop up late fees on missing mail), our bank's bill payment service mails them a check. Only one of these checks has been lost in the mail compared with the percentage of ours (that is, issued and mailed by us), so maybe the bank has some kind of hookup with the USPS that makes delivery more reliable. But yes, because the US is a dystopian capitalist hellscape in which it's more lucrative to make it harder to let people give you money, sometimes the bank still mails checks.
posted by Fish, fish, are you doing your duty? at 2:52 PM on October 27, 2022 [1 favorite]
I'm confused as to where the info in the FPP is coming from. I don't see anything on either of the linked pages stating that banks cut a physical cheque to the payee when you make an online bill payment, except a passing reference to the fact that if the payee isn't online (which seems extremely rare, but I guess not impossible) the bank will mail a paper cheque.
That's why I made the post. I could have linked to some major banks and credit unions, but that would have been tedious and they would have basically just said the same thing anyway. The information isn't shouted from the rooftops, but passed along from one incredulous satisfied customer to the next.
posted by aniola at 2:53 PM on October 27, 2022 [4 favorites]
That's why I made the post. I could have linked to some major banks and credit unions, but that would have been tedious and they would have basically just said the same thing anyway. The information isn't shouted from the rooftops, but passed along from one incredulous satisfied customer to the next.
posted by aniola at 2:53 PM on October 27, 2022 [4 favorites]
Joel Spolsky, in May 2000, on "chicken and egg problems":
...a lot of companies have tried to get into this field, which is technically known as Bill Presentment. One example is (guess who) Microsoft.posted by brainwane at 2:59 PM on October 27, 2022 [10 favorites]
... there are only a small handful of merchants that will bill you over this system. So for all your other bills, you’ll have to go elsewhere.
End result? It’s not worth it. .... Now, Microsoft has to go to merchants and say, “bill your customers over our system!” And the merchants will say, “OK! How much will it cost?” And Microsoft will say, “50 cents! But it’s a lot cheaper than $1!” And the merchants will say, “OK. Anything else?” And Microsoft will say, “Oh yes, it will cost you about $250,000 to set up the software, connect our systems to your systems, and get everything working.”
And since Microsoft has so few dang users on this system, it’s hard to imagine why anyone would pay $250,000 to save 50 cents on 37 users. ...
The chicken-egg problem is that you can only get your Con Ed bills, so you won’t use the service. How can you solve it? Microsoft couldn’t figure it out. PayMyBills.com (and a half dozen other Silicon Valley startups) all figured it out at the same time. You provide a backwards compatibility mode: if the merchant won’t support the system, just get the merchant to mail their damn paper bills to University Avenue, in Palo Alto, where a bunch of actual human beings will open them and scan them in. Now you can get all your bills on their web site. Since every merchant on earth is available on the system, customers are happy to use it, even if it is running in this weird backwards compatibility mode where stupid Visa member banks send the bill electronically to a printer, print it out on paper, stuff it in an envelope, ship it 1500 miles to California, where it is cut open, the stupid flyers harping worthless “free” AM clock radios that actually cost $9.95 are thrown into a landfill somewhere, and the paper bill is scanned back into a computer and stuck up on the web where it should have been sent in the first place. But the stupid backwards compatibility mode will eventually go away, because PayMyBills.com, unlike Microsoft, can actually get customers to use their system, so pretty soon they’ll be able to go to the stupid Visa member banks and say, “hey, I’ve got 93,400 of your customers. Why don’t you save yourselves $93,400 each month with a direct wire connection to me?” And suddenly PayMyBills.com is very profitable while Microsoft is still struggling to sign up their second electric utility, maybe one serving Georgia would be a nice change of pace.
I don't know, in this day and age my fear of my electric utility somehow debiting the wrong amount from my checking account is much less than my fear of a piece of mail getting stolen/stuck in limbo/lost in the postal system.
As someone who has had my electric utility misread my meter and charge me literally 10x what I owed, my risk calculus is a bit different. If that had been on an auto-pay, my rent check and many other bill payments would have bounced, I would have had overdraft fees, and I’d need to be working with all of the payees who didn’t get their money. On the flip side, if a bill pay check is delayed, I have only one payee to deal with, and probably it’s just a conversation to get them to waive the late fee for a single late (rather than rejected) payment that I’m sure is routine to them.
I personally do not allow anyone to withdraw arbitrary amounts from my bank account. Things that are fixed amounts like the mortgage are ok but certainly not utility bills. YMMV.
posted by primethyme at 3:03 PM on October 27, 2022 [6 favorites]
As someone who has had my electric utility misread my meter and charge me literally 10x what I owed, my risk calculus is a bit different. If that had been on an auto-pay, my rent check and many other bill payments would have bounced, I would have had overdraft fees, and I’d need to be working with all of the payees who didn’t get their money. On the flip side, if a bill pay check is delayed, I have only one payee to deal with, and probably it’s just a conversation to get them to waive the late fee for a single late (rather than rejected) payment that I’m sure is routine to them.
I personally do not allow anyone to withdraw arbitrary amounts from my bank account. Things that are fixed amounts like the mortgage are ok but certainly not utility bills. YMMV.
posted by primethyme at 3:03 PM on October 27, 2022 [6 favorites]
Yeah, this used to be my "make my landlord think my rent was being paid by a mysterious trust fund" maneuver (it was not).
posted by praemunire at 3:17 PM on October 27, 2022 [5 favorites]
posted by praemunire at 3:17 PM on October 27, 2022 [5 favorites]
Oh look, it is part of my job!
You have no idea how hard it is to make vendors and contractors move from paying via check to paying electronically. Naturally, they all want to be paid via EFT but it is funny how many checks I get in a week from multinational companies who take advantage of the fact that Treasury requires us to accept checks.
I am currently dealing with a bank check written off of Lloyd's of London for high six figures in pounds. [Redacted] would honestly rather send us physical check from the UK, then have us send it to our vendor (because we are required to do business in USD) and have them deposit the check on our behalf, get paid for that privilege, and then wait for us apply the funds to their contract than... use fucking SWIFT.
posted by gwydapllew at 3:44 PM on October 27, 2022 [3 favorites]
You have no idea how hard it is to make vendors and contractors move from paying via check to paying electronically. Naturally, they all want to be paid via EFT but it is funny how many checks I get in a week from multinational companies who take advantage of the fact that Treasury requires us to accept checks.
I am currently dealing with a bank check written off of Lloyd's of London for high six figures in pounds. [Redacted] would honestly rather send us physical check from the UK, then have us send it to our vendor (because we are required to do business in USD) and have them deposit the check on our behalf, get paid for that privilege, and then wait for us apply the funds to their contract than... use fucking SWIFT.
posted by gwydapllew at 3:44 PM on October 27, 2022 [3 favorites]
They print it out, but yeah. If you're the recipient they often arrive in the tearoff multifold payroll puzzle-check style.
What puzzles me is that they aren’t using one of these panels to get the recipient to provide their ACH information so that future payments can be sent electronically. Instead, it’s up to me to track down ACH info for my vendors so I can schedule payments to go out closer to the due date rather than having to leave a week of slack for checks to be mailed.
I pay most of the bills for our business using Melio, which is who Intuit partnered with to provide this for QuickBooks Online users. And as of a couple of weeks ago, payments going out by check cost $1.50 except for two freebies per month.
posted by jimw at 4:11 PM on October 27, 2022
What puzzles me is that they aren’t using one of these panels to get the recipient to provide their ACH information so that future payments can be sent electronically. Instead, it’s up to me to track down ACH info for my vendors so I can schedule payments to go out closer to the due date rather than having to leave a week of slack for checks to be mailed.
I pay most of the bills for our business using Melio, which is who Intuit partnered with to provide this for QuickBooks Online users. And as of a couple of weeks ago, payments going out by check cost $1.50 except for two freebies per month.
posted by jimw at 4:11 PM on October 27, 2022
When I was working in telecommunications I coined the term “milking machine” where a multiplexer was paired immediately to a demultiplexer. For several reasons it never caught on. But FWIW, introducing and subsequently eliminating milking machines has been a slow but inexorable ratchet of progress.
posted by sjswitzer at 4:14 PM on October 27, 2022 [3 favorites]
posted by sjswitzer at 4:14 PM on October 27, 2022 [3 favorites]
I pay all my bills by writing checks and mailing them myself (except my mortgage, which s at the same credit union as my money.) I kind of enjoy how much Best Buy resents having to open my envelopes, from all the emails they send pleading with me to pay online.
posted by Horace Rumpole at 4:18 PM on October 27, 2022 [3 favorites]
posted by Horace Rumpole at 4:18 PM on October 27, 2022 [3 favorites]
The dumbest example of a milking machine would be a printer connected to an OCR machine with a loop of mylar paper. I can assure you I’ve seen things like that but stupider. Less stupidly, every screen-scraping app. It’s always spy-vs-spy.
posted by sjswitzer at 4:20 PM on October 27, 2022 [3 favorites]
posted by sjswitzer at 4:20 PM on October 27, 2022 [3 favorites]
Online bill-pay appears to be a failure of capitalism.
It's an example of how competition is supposed to work. Once one bank started offering it as a perk, its peer banks did as well, and so on and so forth.
But it's not entirely benevolent. The advantage to the bank is that once you get all your automatic payments set up, you're a whole lot less likely to leave.
As someone who has had my electric utility misread my meter and charge me literally 10x what I owed, my risk calculus is a bit different.
All of my utilities have always sent the bill weeks ahead of the debit, allowing anyone who wants to check their bill by hand manually can do so and get it corrected some time before the transaction happens. For my risk calculus, the cumulative late fees I had before getting everything set up to just be automatically paid were way higher than the total cost of a single incident like what you're talking about would be.
posted by Candleman at 4:41 PM on October 27, 2022 [1 favorite]
It's an example of how competition is supposed to work. Once one bank started offering it as a perk, its peer banks did as well, and so on and so forth.
But it's not entirely benevolent. The advantage to the bank is that once you get all your automatic payments set up, you're a whole lot less likely to leave.
As someone who has had my electric utility misread my meter and charge me literally 10x what I owed, my risk calculus is a bit different.
All of my utilities have always sent the bill weeks ahead of the debit, allowing anyone who wants to check their bill by hand manually can do so and get it corrected some time before the transaction happens. For my risk calculus, the cumulative late fees I had before getting everything set up to just be automatically paid were way higher than the total cost of a single incident like what you're talking about would be.
posted by Candleman at 4:41 PM on October 27, 2022 [1 favorite]
Very timely. I've been depositing checks for my parent's business this past month, and I wondered why they all looked so similar.
posted by rebent at 4:42 PM on October 27, 2022
posted by rebent at 4:42 PM on October 27, 2022
And by "deposit" I mean "scan into the online deposit app".
The banks could save a stamp by emailing me pictures of the checks.
posted by rebent at 4:43 PM on October 27, 2022 [5 favorites]
The banks could save a stamp by emailing me pictures of the checks.
posted by rebent at 4:43 PM on October 27, 2022 [5 favorites]
I do a little bit of consulting in my field on the side and a few months ago a client went from sending me checks they cut directly to some kind of 3rd party payment service. The service offers to pay me 'immediately' via EFT to one of my bank accounts but...I first need to create an account with the service and give them all of the poop about me and my account. Ah, sorry no. I don't need yet another random collection of 'stuff about me' being maintained on-line by an entity I know nothing about, including how they manage their security. This means I have to wait an additional business week or so at which point the service (finally) cuts a physical check and mails it to me. (And yes, perhaps they get to hang onto my dough during that time.)
I am certain there's some clever CFO-type at my client's company who came up with this as a money/time saving mechanism but, sorry, no. It just strikes me as another 'attack surface' for my on-line identity.
posted by Insert Clever Name Here at 4:57 PM on October 27, 2022
I am certain there's some clever CFO-type at my client's company who came up with this as a money/time saving mechanism but, sorry, no. It just strikes me as another 'attack surface' for my on-line identity.
posted by Insert Clever Name Here at 4:57 PM on October 27, 2022
We're talking about paying your bills online, right? They don't actually literally fill out a cheque and mail it on your behalf to a company, right?
Oh, but they do. They will literally print out, fold, shove in an envelope, and mail a physical check to whomever you indicate in the web form is the intended recipient of the funds. That is, if they aren't set up in the bank's database as someone who receives EFTs automatically (usually only utilities, big RE management companies, mortgage servicers, etc.). Because in the bizarro world that is the US financial system, that is often the cheapest and most efficient way to transmit money to someone.
Up until Venmo and Zelle became widely available, dropping a written check in the mail was almost always the lowest-fee method of transmitting money from one person in the US to another, short of literally handing them a wad of cash.
And someday in the not-too-distant, when Venmo and Zelle think they have enough of a corner on the payments market to start skimming a fee off of every transfer, it'll be paper checks to the rescue again.
I'm not against electronic payments, but in all the "hurf durf I don't do checks" stuff, we should keep in mind that paper checks are really important, as is the infrastructure that processes them and handles settlement.
It's worth noting that the electronic side of the US check-clearing network, ACH, is run by a non-profit 501(c)(6) corporation—Nacha—and governed by a board drawn from various banks and (significantly) credit unions. This strikes me as a much more preferable structure than having a for-profit entity like Visa / Mastercard / PayPal operating the transaction network, and it's borne out in practice: ACH transfers are cheaper to perform than moving the same amount through a for-profit credit card network. It's an impressively efficient system.
Is having to write out a little slip of paper and hand it to the cashier a bit of an odd UI for an electronics-payment system? Sure. (Although I don't think it's necessarily the worst, either. I'd take "slip of paper" over a shitty resistive touchscreen any day.)
The credit card companies, and transfer companies like PayPal (and Western Union before them, and CashApp and whoever else comes next after them), would love to see paper checks and ACH go away. That would be a really bad thing for average consumers. I don't think it's super-likely to happen, but everyone might do well to reconsider using paper checks and ACH where possible and appropriate. Every check you write instead of using a credit-card product is a win for the lesser evil.
posted by Kadin2048 at 5:07 PM on October 27, 2022 [19 favorites]
Oh, but they do. They will literally print out, fold, shove in an envelope, and mail a physical check to whomever you indicate in the web form is the intended recipient of the funds. That is, if they aren't set up in the bank's database as someone who receives EFTs automatically (usually only utilities, big RE management companies, mortgage servicers, etc.). Because in the bizarro world that is the US financial system, that is often the cheapest and most efficient way to transmit money to someone.
Up until Venmo and Zelle became widely available, dropping a written check in the mail was almost always the lowest-fee method of transmitting money from one person in the US to another, short of literally handing them a wad of cash.
And someday in the not-too-distant, when Venmo and Zelle think they have enough of a corner on the payments market to start skimming a fee off of every transfer, it'll be paper checks to the rescue again.
I'm not against electronic payments, but in all the "hurf durf I don't do checks" stuff, we should keep in mind that paper checks are really important, as is the infrastructure that processes them and handles settlement.
It's worth noting that the electronic side of the US check-clearing network, ACH, is run by a non-profit 501(c)(6) corporation—Nacha—and governed by a board drawn from various banks and (significantly) credit unions. This strikes me as a much more preferable structure than having a for-profit entity like Visa / Mastercard / PayPal operating the transaction network, and it's borne out in practice: ACH transfers are cheaper to perform than moving the same amount through a for-profit credit card network. It's an impressively efficient system.
Is having to write out a little slip of paper and hand it to the cashier a bit of an odd UI for an electronics-payment system? Sure. (Although I don't think it's necessarily the worst, either. I'd take "slip of paper" over a shitty resistive touchscreen any day.)
The credit card companies, and transfer companies like PayPal (and Western Union before them, and CashApp and whoever else comes next after them), would love to see paper checks and ACH go away. That would be a really bad thing for average consumers. I don't think it's super-likely to happen, but everyone might do well to reconsider using paper checks and ACH where possible and appropriate. Every check you write instead of using a credit-card product is a win for the lesser evil.
posted by Kadin2048 at 5:07 PM on October 27, 2022 [19 favorites]
(yes in the usa and possibly a handful of other places we do banking wrong-all-wrong. there, glad we got that out of the way.)
Not going to say that, but this whole system looks like one that's pretending to offer payment by EFT but it's more like a vending machine with a person sitting inside it and shoving whatever you order through the slot. It has all the security flaws (more probably, plus more scope for error, what with all that human intervention) of EFT with none of the benefits such as immediate payment for merchants and easy, instant payment to anyone with no need to set up special accounts or jump through hoops.
I don't and would never authorise anyone to deduct variable amounts (eg utility bills) from my account, but being able to sit with my phone and pay all my bills with a few taps and have them credited instantly is pretty cool. Many companies here won't accept payment by cheque or cash these days and even the smallest of businesses have cheap and easy access to merchant facilities. The government likes it too, because it's impossible to operate without leaving a trail for the tax office, unlike cash transactions.
posted by dg at 5:11 PM on October 27, 2022 [1 favorite]
Not going to say that, but this whole system looks like one that's pretending to offer payment by EFT but it's more like a vending machine with a person sitting inside it and shoving whatever you order through the slot. It has all the security flaws (more probably, plus more scope for error, what with all that human intervention) of EFT with none of the benefits such as immediate payment for merchants and easy, instant payment to anyone with no need to set up special accounts or jump through hoops.
I don't and would never authorise anyone to deduct variable amounts (eg utility bills) from my account, but being able to sit with my phone and pay all my bills with a few taps and have them credited instantly is pretty cool. Many companies here won't accept payment by cheque or cash these days and even the smallest of businesses have cheap and easy access to merchant facilities. The government likes it too, because it's impossible to operate without leaving a trail for the tax office, unlike cash transactions.
posted by dg at 5:11 PM on October 27, 2022 [1 favorite]
Many companies here won't accept payment by cheque or cash these days
They're starting to go that way here, too. To me, not accepting cash looks like a privacy issue.
posted by aniola at 5:35 PM on October 27, 2022
They're starting to go that way here, too. To me, not accepting cash looks like a privacy issue.
posted by aniola at 5:35 PM on October 27, 2022
It's definitely obscuring what's going on, and I will absolutely pay electronically when necessary, but it's way faster for me to have my bank print a check and mail it in big, efficient batches than for me to find my checkbook, write a check (this is like, twice a year), find a stamp (where do you people get stamps? I would have to make a special trip to the post office), and mail it (nearest post box is well out of my way, and we don't have a place to secure mail for the letter carrier.) It's such a production to mail someone a check. I realize that I am a shill for Medium-Sized Bank, but writing paper checks is so inconvenient that I am delighted for my bank to do it instead.
posted by chesty_a_arthur at 5:35 PM on October 27, 2022
posted by chesty_a_arthur at 5:35 PM on October 27, 2022
I pay every bill online, mostly through the vendors portal Ie Austin electric/water/waste/etc has a site that I have an account into, as do all of my other bills. I use PayPal to support MetaFilter, Wikipedia, EFF, Dan Carlin -- I think that's it.
~~~~
So maybe 5 or 6 years ago I lost my debit card and for whatever reason couldn't get a new one made -- weekend maybe?
I took a check to local grocer, it didn't go through -- here I'm standing with all groceries, they're telling me to buzz off.
For whatever reason, my bank had changed ... something on the check. Or maybe updated something or other that the merchant caught me out on.
I went to my bank, got maybe ten checks printed, didn't use even one because I had new debit card. I think I've still got the nice black leather checkbook I purchased maybe 25 years ago, real high quality, soft leather. Wonder what it'd be good for; it really is nice leather, hate to just trash it...
~~~~~
Early 90s I worked as mainframe programmer in a bank, team I was on supported all check jive, including MICR (Magnetic Ink Character Recognition) which is your account number, the check number, the institutions number printed in special ink at the bottom of the check. Programming for the MICR system itself was handled by a few programmers who had worked it for YEARS, incredibly archaic, primitive software.
It's really something to see (or was, likely all the checks are dumped in and scanned now, as noted upthread) it was really something to see, big honkin' stacks of checks flying, one at a time, through this 20 or 30 foot long machine upwards of 35 miles per hour. Not certain but I'm guessing it had areas to dump checks it couldn't read either for illegible writing or torn check.
posted by dancestoblue at 6:23 PM on October 27, 2022 [1 favorite]
~~~~
So maybe 5 or 6 years ago I lost my debit card and for whatever reason couldn't get a new one made -- weekend maybe?
I took a check to local grocer, it didn't go through -- here I'm standing with all groceries, they're telling me to buzz off.
For whatever reason, my bank had changed ... something on the check. Or maybe updated something or other that the merchant caught me out on.
I went to my bank, got maybe ten checks printed, didn't use even one because I had new debit card. I think I've still got the nice black leather checkbook I purchased maybe 25 years ago, real high quality, soft leather. Wonder what it'd be good for; it really is nice leather, hate to just trash it...
~~~~~
Early 90s I worked as mainframe programmer in a bank, team I was on supported all check jive, including MICR (Magnetic Ink Character Recognition) which is your account number, the check number, the institutions number printed in special ink at the bottom of the check. Programming for the MICR system itself was handled by a few programmers who had worked it for YEARS, incredibly archaic, primitive software.
It's really something to see (or was, likely all the checks are dumped in and scanned now, as noted upthread) it was really something to see, big honkin' stacks of checks flying, one at a time, through this 20 or 30 foot long machine upwards of 35 miles per hour. Not certain but I'm guessing it had areas to dump checks it couldn't read either for illegible writing or torn check.
posted by dancestoblue at 6:23 PM on October 27, 2022 [1 favorite]
I meant to include an "easy DIY make your own check" link in this article but all I found were "download this check-making software." Since people use checks so rarely now, it really seems like taking ink to some paper must be an option. There's nothing special about checks being typed instead of handwritten as far as I can tell. Maybe it's a required watermark thing?
posted by aniola at 6:38 PM on October 27, 2022
posted by aniola at 6:38 PM on October 27, 2022
where do you people get stamps? I would have to make a special trip to the post office
I'm not trying to blow anyone's mind anymore than anyone's mind has already been blown by this thread, but you can order stamps from the US Postal Service via the Internet. I'm serious.
posted by wondermouse at 6:48 PM on October 27, 2022 [11 favorites]
I'm not trying to blow anyone's mind anymore than anyone's mind has already been blown by this thread, but you can order stamps from the US Postal Service via the Internet. I'm serious.
posted by wondermouse at 6:48 PM on October 27, 2022 [11 favorites]
Wondermouse, I did just this when my kid needed stamps for camp. (They were hip hop commemorative stamps, and they were awesome.)
posted by chesty_a_arthur at 6:49 PM on October 27, 2022
posted by chesty_a_arthur at 6:49 PM on October 27, 2022
Yes, when I worked the job that introduced me to the receiving end of bank bill pay checks, I got to see a lot of the interesting Forever Stamps that are available (we got a lot of other mail too). I was like, "How do people even know about these stamps? Where do people buy these weird stamps?" Then I found them on the internet.
posted by wondermouse at 6:56 PM on October 27, 2022 [1 favorite]
posted by wondermouse at 6:56 PM on October 27, 2022 [1 favorite]
Reading the comments here in abstract of the FPP, I’m glad that monetary transactions, with the full weight, faith, and credit of US currency, I execute haven’t been quite reduced to a miniscule, speed-of-light computation
posted by JoeXIII007 at 7:00 PM on October 27, 2022 [1 favorite]
posted by JoeXIII007 at 7:00 PM on October 27, 2022 [1 favorite]
where do you people get stamps? I would have to make a special trip to the post office
I can just walk around the corner to the post office, it's only two blocks.
posted by octothorpe at 7:01 PM on October 27, 2022 [2 favorites]
I can just walk around the corner to the post office, it's only two blocks.
posted by octothorpe at 7:01 PM on October 27, 2022 [2 favorites]
My folks have been getting forever stamps for literal decades now
posted by JoeXIII007 at 7:03 PM on October 27, 2022 [2 favorites]
posted by JoeXIII007 at 7:03 PM on October 27, 2022 [2 favorites]
I do most of my payments online, but will not ever sign up for "Automatic Bill Pay". I can afford not to get the $5 discount for that. Streaming services though, don't you have to give them a credit card to get going? So I guess those are sort of auto-pay, though I think you could raise a fuss with the CC issuer if there was some problem.
Since all these companies want me to auto-pay, I'm pretty sure that is to their benefit, and so, fuck that shit.
posted by Windopaene at 7:15 PM on October 27, 2022
Since all these companies want me to auto-pay, I'm pretty sure that is to their benefit, and so, fuck that shit.
posted by Windopaene at 7:15 PM on October 27, 2022
where do you people get stamps?
All the major grocery stores as well as Costso near me carry them.
posted by Candleman at 7:21 PM on October 27, 2022 [2 favorites]
All the major grocery stores as well as Costso near me carry them.
posted by Candleman at 7:21 PM on October 27, 2022 [2 favorites]
where do you people get stamps?I order them online from the post office once a year or so.
posted by mbrubeck at 7:23 PM on October 27, 2022 [1 favorite]
Post offices, grocery stores, some ATMs and/or bank branches have them too.
posted by snuffleupagus at 7:29 PM on October 27, 2022
posted by snuffleupagus at 7:29 PM on October 27, 2022
I meant to include an "easy DIY make your own check" link in this article but all I found were "download this check-making software."
I've got an idea that NACHA charges for the specs on the "correct" way to format a check, which is probably some drug deal with the check-printing companies to protect their business in return for using the NACHA standard.
But yeah, as a result it's annoyingly hard to find resources on exactly what you need to put on a check, and where it needs to be, in order for the check to be valid and processed without complaint by the banks.
Regarding MICR: I'm pretty sure there's no actual magnetic MICR equipment in the check-clearing processes anymore. The check-printing companies like to hold out the idea that there might be some magnetic check-reading systems around, and thus to print a valid check you must to use special MICR toner… but in practice I bet you could use non-MICR toner and never, ever notice. If somebody does have a no-shit magnetic MICR reader in 2022 and you hand them a check, my guess is that they'll assume the reader is broken and hand-key the account/routing values in rather than reject the check.
None of that is to detract from MICR being a pretty neat trick when it was developed, though. (For those who aren't aware and aren't feeling like going down a Wikipedia rabbithole: MICR uses a strange typeface and iron-impregnated toner or ink, to produce a set of human-readable digits 0-9 plus a few symbols, which each produce a unique signal when pulled at a constant speed over a simple magnetic coil, like that used for reading magnetic tape. Basically, the bottom of every US check, with those funny numbers, is a very coarse-grained bit of paper-backed magnetic tape. And until OCR and other optical technologies got good, that's how cash registers and other machines read checks.)
I've never been bold enough to print my own checks on regular-old copier paper, just because I don't really want to figure out where in the fine print of my deposit agreement with my bank it says they can fine me $30 or whatever for doing that sort of thing. But I'm pretty sure I could (well, not on copier paper, but on the right kind of stock).
I have printed up my own deposit slips, which typically follow a similar format but are only read by the depository bank, and they are generally much less picky about. I never had any of them kicked back, as long as they were roughly the right size and had the MICR line in the right place relative to the bottom margin.
posted by Kadin2048 at 7:33 PM on October 27, 2022 [3 favorites]
I've got an idea that NACHA charges for the specs on the "correct" way to format a check, which is probably some drug deal with the check-printing companies to protect their business in return for using the NACHA standard.
But yeah, as a result it's annoyingly hard to find resources on exactly what you need to put on a check, and where it needs to be, in order for the check to be valid and processed without complaint by the banks.
Regarding MICR: I'm pretty sure there's no actual magnetic MICR equipment in the check-clearing processes anymore. The check-printing companies like to hold out the idea that there might be some magnetic check-reading systems around, and thus to print a valid check you must to use special MICR toner… but in practice I bet you could use non-MICR toner and never, ever notice. If somebody does have a no-shit magnetic MICR reader in 2022 and you hand them a check, my guess is that they'll assume the reader is broken and hand-key the account/routing values in rather than reject the check.
None of that is to detract from MICR being a pretty neat trick when it was developed, though. (For those who aren't aware and aren't feeling like going down a Wikipedia rabbithole: MICR uses a strange typeface and iron-impregnated toner or ink, to produce a set of human-readable digits 0-9 plus a few symbols, which each produce a unique signal when pulled at a constant speed over a simple magnetic coil, like that used for reading magnetic tape. Basically, the bottom of every US check, with those funny numbers, is a very coarse-grained bit of paper-backed magnetic tape. And until OCR and other optical technologies got good, that's how cash registers and other machines read checks.)
I've never been bold enough to print my own checks on regular-old copier paper, just because I don't really want to figure out where in the fine print of my deposit agreement with my bank it says they can fine me $30 or whatever for doing that sort of thing. But I'm pretty sure I could (well, not on copier paper, but on the right kind of stock).
I have printed up my own deposit slips, which typically follow a similar format but are only read by the depository bank, and they are generally much less picky about. I never had any of them kicked back, as long as they were roughly the right size and had the MICR line in the right place relative to the bottom margin.
posted by Kadin2048 at 7:33 PM on October 27, 2022 [3 favorites]
IF you are budgeting and time is not so important for a payment... those numbers on your check are printed with magnetic ink (MICR). Run a magnet over them and the check has to be manually processed as they cannot be machine read. Check is received and entered as 'paid' so clears the 'has the customer paid?' hurdle but then has to be manually processed into the receiving company accounts. Unless of course they use OCR ... which most still do not. Banks are old school and take time to alter how they operate. e.g. most ATMs still operate using COBOL and the infrastructure is too complex to swap out. It's how I get paid. Simply maintaining the code... boring AF but it pays the bills big time...
posted by IndelibleUnderpants at 8:09 PM on October 27, 2022 [1 favorite]
posted by IndelibleUnderpants at 8:09 PM on October 27, 2022 [1 favorite]
I have printed up my own deposit slips
Whoops, I thought any ole scrap of paper with the correct information was adequate!
I used to be a part of a volunteer-run organization in a small city. We got a call from the credit union: "Did you deposit this fat wad of cash without any identifying information in the safe deposit box? You did? Yeah, we thought that was you. Please include a deposit slip. Thanks! Bye!"
posted by aniola at 8:40 PM on October 27, 2022 [1 favorite]
Whoops, I thought any ole scrap of paper with the correct information was adequate!
I used to be a part of a volunteer-run organization in a small city. We got a call from the credit union: "Did you deposit this fat wad of cash without any identifying information in the safe deposit box? You did? Yeah, we thought that was you. Please include a deposit slip. Thanks! Bye!"
posted by aniola at 8:40 PM on October 27, 2022 [1 favorite]
I read the OP and the first reply and I still can't figure out if this is a joke post or who the joke is being played on. We're talking about paying your bills online, right? They don't actually literally fill out a cheque and mail it on your behalf to a company, right? What is going on in here and why is everyone in the thread acting like it was invented yesterday?
YES! What is happening here people??!?! This is a basic service offered by most (all?) banks!!! Am I taking crazy pills??? Is the next post going to be about the $20 bill, which you can...use in person...to buy...things...?
posted by Toddles at 8:45 PM on October 27, 2022
YES! What is happening here people??!?! This is a basic service offered by most (all?) banks!!! Am I taking crazy pills??? Is the next post going to be about the $20 bill, which you can...use in person...to buy...things...?
posted by Toddles at 8:45 PM on October 27, 2022
Unless they already have an arrangement with the recipient, the bank will literally send a check on your behalf. Paper check, in an envelope, with a stamp, and everything. Truly. We're not making this up.
posted by praemunire at 8:50 PM on October 27, 2022 [3 favorites]
posted by praemunire at 8:50 PM on October 27, 2022 [3 favorites]
To me, not accepting cash looks like a privacy issue.
Yes, that used to be the argument in favour of keeping cash around - everyone has the right to make untraceable transactions, not just organised criminal organisations looking to launder drug money. It was COVID that nailed the lid down on that, with retailers deciding it wasn't safe to handle people's plague-infested notes. Cash is not dead by a long shot, but it's definitely been deprecated here and very few people use it.
posted by dg at 8:54 PM on October 27, 2022 [1 favorite]
Yes, that used to be the argument in favour of keeping cash around - everyone has the right to make untraceable transactions, not just organised criminal organisations looking to launder drug money. It was COVID that nailed the lid down on that, with retailers deciding it wasn't safe to handle people's plague-infested notes. Cash is not dead by a long shot, but it's definitely been deprecated here and very few people use it.
posted by dg at 8:54 PM on October 27, 2022 [1 favorite]
Back in the day, I was so incredulous, my first online bill pay was to myself. Just to make sure the system worked as described. I got a check in the mail from me to me. A check, in an envelope. Stamped. For 1¢.
posted by aniola at 9:27 PM on October 27, 2022 [6 favorites]
posted by aniola at 9:27 PM on October 27, 2022 [6 favorites]
"Cut a check" sounded odder and odder to me. Poking about:
* for a while a business/bookkeeper would physically cut a check out of the account book page that had their record of the transaction nearer the spine; if cut irregularly, this was an anti-forging measure
* Because for a while all checks were just shortish little signed letters; here’s a history with a picture of a 17th one
* also for a while cancelling or clearing a check involved little lines cut into it to make it in-alterable but not illegible, and was also called cutting a check
I remember getting all my checks back with each bank statement, but I don’t remember them having cuts in them.
posted by clew at 9:51 PM on October 27, 2022
* for a while a business/bookkeeper would physically cut a check out of the account book page that had their record of the transaction nearer the spine; if cut irregularly, this was an anti-forging measure
* Because for a while all checks were just shortish little signed letters; here’s a history with a picture of a 17th one
* also for a while cancelling or clearing a check involved little lines cut into it to make it in-alterable but not illegible, and was also called cutting a check
I remember getting all my checks back with each bank statement, but I don’t remember them having cuts in them.
posted by clew at 9:51 PM on October 27, 2022
Did you cash it?
And implode the universe?!
posted by aniola at 9:53 PM on October 27, 2022 [3 favorites]
And implode the universe?!
posted by aniola at 9:53 PM on October 27, 2022 [3 favorites]
For any Canadians reading, we don't have this because of Interac.
America doesn't have particularly functional inter-bank networks, hence printing and mailing cheques.
Other countries have more than one and they work together, as far as I understand, at least smoothly.
Canada has one. Only one. All hail Interac.
Therefore, one of three cell service providers going down for a day downed our whole banking system in a largely cashless world (link to my comment explaining this at the time, and though I may be brainwashed, why Interac is probably good? At least good enough that the idea of banks printing and mailing cheques this much is hard to imagine)
Unfortunately for the USA, your banks have this thing 'competition' which prevents accidentally ending up with one almighty payment system, for better and/or worse.
posted by lookoutbelow at 10:09 PM on October 27, 2022 [2 favorites]
America doesn't have particularly functional inter-bank networks, hence printing and mailing cheques.
Other countries have more than one and they work together, as far as I understand, at least smoothly.
Canada has one. Only one. All hail Interac.
Therefore, one of three cell service providers going down for a day downed our whole banking system in a largely cashless world (link to my comment explaining this at the time, and though I may be brainwashed, why Interac is probably good? At least good enough that the idea of banks printing and mailing cheques this much is hard to imagine)
Unfortunately for the USA, your banks have this thing 'competition' which prevents accidentally ending up with one almighty payment system, for better and/or worse.
posted by lookoutbelow at 10:09 PM on October 27, 2022 [2 favorites]
Canada has one. Only one. All hail Interac.
Australia, too, has only one: Interbank. It is owned and operated by the Reserve Bank, which is owned by the Commonwealth of Australia not shareholders.
posted by Thella at 10:43 PM on October 27, 2022 [1 favorite]
Australia, too, has only one: Interbank. It is owned and operated by the Reserve Bank, which is owned by the Commonwealth of Australia not shareholders.
posted by Thella at 10:43 PM on October 27, 2022 [1 favorite]
It would be possible to run TCP/IP over this. Some small tweaks on RFC 2549..
posted by joeyh at 10:46 PM on October 27, 2022 [1 favorite]
posted by joeyh at 10:46 PM on October 27, 2022 [1 favorite]
Thanks everyone for not immediately going "you dum dum of course it's true"! After reading more posts it actually does make sense, and this is clearly just a thing I never really thought that hard about before because I only ever used it for big services like my credit card provider. But of course not everyone would be in the bank's system, so if they want to support them and there's no other method of EFT, cutting a check it is.
The missing link I think is what lookoutbelow posted above: I'm in Canada, so Interac's been around for as long as I can remember. I didn't realize the U.S. didn't have a unified payment system or a bunch that worked together, or maybe it's better to say I didn't think about the implications of such when it came to bill payments. (I do remember seeing different payment networks on ATMs in the States but I guess I never thought too hard about it beyond the occasional "does my card work at this ATM.")
I'll swing back to the OP's conclusion: online bill-pay (specifically the part that resorts to printing out a whole bunch of cheques on accordion-like paper scrolls) IS cool.
posted by chrominance at 10:51 PM on October 27, 2022 [1 favorite]
The missing link I think is what lookoutbelow posted above: I'm in Canada, so Interac's been around for as long as I can remember. I didn't realize the U.S. didn't have a unified payment system or a bunch that worked together, or maybe it's better to say I didn't think about the implications of such when it came to bill payments. (I do remember seeing different payment networks on ATMs in the States but I guess I never thought too hard about it beyond the occasional "does my card work at this ATM.")
I'll swing back to the OP's conclusion: online bill-pay (specifically the part that resorts to printing out a whole bunch of cheques on accordion-like paper scrolls) IS cool.
posted by chrominance at 10:51 PM on October 27, 2022 [1 favorite]
There's nothing special about checks being typed instead of handwritten as far as I can tell. Maybe it's a required watermark thing?
Last I checked, my bank will still honor a fully handwritten check like it was 1890 (as in a payment order written on a napkin or whatever random scrap of paper happens to be lying about), but they charge a $20 fee to process "non-standard" checks. I have never been bold enough to give it a try, though, so it's always been form checks for me. Well, except that one time I used a counter check back in the 90s, but that was also a form, just without the account number and payor information already filled in.
posted by wierdo at 10:56 PM on October 27, 2022
Last I checked, my bank will still honor a fully handwritten check like it was 1890 (as in a payment order written on a napkin or whatever random scrap of paper happens to be lying about), but they charge a $20 fee to process "non-standard" checks. I have never been bold enough to give it a try, though, so it's always been form checks for me. Well, except that one time I used a counter check back in the 90s, but that was also a form, just without the account number and payor information already filled in.
posted by wierdo at 10:56 PM on October 27, 2022
This is cute. Like the whole thread, as well as the archaic system y'all are celebrating.
Has anyone yet made you feel bad about the paper and fuel used to send this banking data around? Bring on a federal payments mechanism, even if has to come with the hip label of Central Bank Digital Currency and tarred by association with all that blockhain hype.
posted by k3ninho at 11:45 PM on October 27, 2022 [1 favorite]
Has anyone yet made you feel bad about the paper and fuel used to send this banking data around? Bring on a federal payments mechanism, even if has to come with the hip label of Central Bank Digital Currency and tarred by association with all that blockhain hype.
posted by k3ninho at 11:45 PM on October 27, 2022 [1 favorite]
Hey all of this information is fine and good but how does this system work for sending money to Metafilter? I'd like to use Bill Pay to send money to MF and cut out the PayPal bite. Would MF get a paper check? and would that be acceptable or would it cause more work? I know I should use the Contact form for this question.
posted by a humble nudibranch at 11:49 PM on October 27, 2022 [3 favorites]
posted by a humble nudibranch at 11:49 PM on October 27, 2022 [3 favorites]
Has anyone yet made you feel bad about the paper and fuel used to send this banking data around?
It's a waste of paper, but for the most part none of the backend processing has used the actual paper in 20 years, so the fuel cost is minimal. Banks aren't flying plane loads of checks to a clearing house anymore, they're exchanging images of checks, same as they do when you use mobile deposit.
I do kinda miss getting the actual pieces of paper with all their stamps showing how they were processed back in the mail every month, but images are just as good for everything that matters. Not that I've written a check (or had one written on my behalf) in years, though.
posted by wierdo at 12:16 AM on October 28, 2022
It's a waste of paper, but for the most part none of the backend processing has used the actual paper in 20 years, so the fuel cost is minimal. Banks aren't flying plane loads of checks to a clearing house anymore, they're exchanging images of checks, same as they do when you use mobile deposit.
I do kinda miss getting the actual pieces of paper with all their stamps showing how they were processed back in the mail every month, but images are just as good for everything that matters. Not that I've written a check (or had one written on my behalf) in years, though.
posted by wierdo at 12:16 AM on October 28, 2022
They don't actually literally fill out a cheque and mail it on your behalf to a company, right?
Yes, yes they do. Kill it! Kill it with fire!
Seriously though... KILL IT WITH FIRE!
More seriously though - we've been slowly opening up in the US the last couple of years and cheques/checks are our biggest problem currently. I understand the use cases, and that their rationale can be explained by the shortcomings in the ACH system[^1], but they're a pain.
The current system we have in place to handle incoming cheque payments are:
To add to the annoyances, some of our beneficiaries want to be paid by cheque. So we use a service with our banking partner to send outgoing payments, and that is handled like so:
All of the above could be resolved by a sane EFT system, and we wouldn't have to spend time chasing all these bits of paper and trying to reconcile payments that are still floating around in the postal system. And yes, sorry for the use of "cheque" rather than "check" but i've found it's easier to grok commit messages and code if we use the British spelling.
[^1]: "Shortcomings" is me being extremely diplomatic here - the "anyone can pull money with an account number and branch code, the bank will put it back a few days/weeks later if owner of the account disputes it" model is completely absurd. If this were the same in other countries HELL NO would I be giving out any of my account details.
posted by lawrencium at 12:39 AM on October 28, 2022 [5 favorites]
Yes, yes they do. Kill it! Kill it with fire!
Seriously though... KILL IT WITH FIRE!
More seriously though - we've been slowly opening up in the US the last couple of years and cheques/checks are our biggest problem currently. I understand the use cases, and that their rationale can be explained by the shortcomings in the ACH system[^1], but they're a pain.
The current system we have in place to handle incoming cheque payments are:
- Tenants send their rent payment cheque to one of several PO Boxes.
- These PO Boxes are opened by a third party who scan and "cash" the cheques.
- They send us a plain text file with the details of the cheques.
- We download the text file, import the data, and try to tie up the two ends.
- Some time later actual money transfers between the third party and us
- Cheque gets lost in the post or is delayed
- Cheque goes to the wrong PO Box
- Cheque doesn't include all the necessary details
- Cheque includes the wrong details
- Cheque bounces ("hey! i had enough money in my account when I mailed the cheque")
- Cheque was cancelled/voided
- Cheque is disputed
To add to the annoyances, some of our beneficiaries want to be paid by cheque. So we use a service with our banking partner to send outgoing payments, and that is handled like so:
- We send an XML file to our banking partner
- They send that to a third party who literally print and mail the cheques out
- We assume all is good until told otherwise
All of the above could be resolved by a sane EFT system, and we wouldn't have to spend time chasing all these bits of paper and trying to reconcile payments that are still floating around in the postal system. And yes, sorry for the use of "cheque" rather than "check" but i've found it's easier to grok commit messages and code if we use the British spelling.
[^1]: "Shortcomings" is me being extremely diplomatic here - the "anyone can pull money with an account number and branch code, the bank will put it back a few days/weeks later if owner of the account disputes it" model is completely absurd. If this were the same in other countries HELL NO would I be giving out any of my account details.
posted by lawrencium at 12:39 AM on October 28, 2022 [5 favorites]
My understanding is that the reason you can deposit checks by image without a physical artifact began with grounded flights after September 11th.
Surprisingly thorough but obvious marketing source. Denser FDIC context on the Check 21 act.
posted by abulafa at 12:55 AM on October 28, 2022 [2 favorites]
Surprisingly thorough but obvious marketing source. Denser FDIC context on the Check 21 act.
posted by abulafa at 12:55 AM on October 28, 2022 [2 favorites]
"online bill pay." Your financial institution of choice will cut a physical check and put it in an envelope and address the envelope and put a stamp on it and drop it in the mail and typically they don't even charge you for the check, the envelope, the ink, their time, or the stamp!
Can I just say, as a person living in a country with a dilapidated and often usurious banking system... What. The. Actual. Fuck???
We use Bacs. I agree to pay a company a regular bill. They set up a direct debit, it comes out of my account via direct bank-to-bank electronic transfer. I can cancel this at any time, and have a legal guarantee of getting the money back immediately from the bank if there's an error. My pay comes in via a Bacs payment from their account to mine. I can transfer money to any other account at any time I like (with verification via MFA); usually completes in minutes. I can make a regular recurring payment easily.
All this functionality carries no fees of any kind (nor involve VISA or mastercard), because being able to transfer money quickly and efficiently is the *key fucking feature of a bank*.
posted by Absolutely No You-Know-What at 1:03 AM on October 28, 2022 [4 favorites]
Can I just say, as a person living in a country with a dilapidated and often usurious banking system... What. The. Actual. Fuck???
We use Bacs. I agree to pay a company a regular bill. They set up a direct debit, it comes out of my account via direct bank-to-bank electronic transfer. I can cancel this at any time, and have a legal guarantee of getting the money back immediately from the bank if there's an error. My pay comes in via a Bacs payment from their account to mine. I can transfer money to any other account at any time I like (with verification via MFA); usually completes in minutes. I can make a regular recurring payment easily.
All this functionality carries no fees of any kind (nor involve VISA or mastercard), because being able to transfer money quickly and efficiently is the *key fucking feature of a bank*.
posted by Absolutely No You-Know-What at 1:03 AM on October 28, 2022 [4 favorites]
Hey all of this information is fine and good but how does this system work for sending money to Metafilter? I'd like to use Bill Pay to send money to MF and cut out the PayPal bite. Would MF get a paper check? and would that be acceptable or would it cause more work? I know I should use the Contact form for this question.
You can send a check this way, Metafilter welcomes a paper check! It is explicitly noted on the funding page:
You can send a paper check (or cheque) to:
MetaFilter
PO Box 345
Randolph VT 05060
If you're a member, please add your username to the check.
posted by charmedimsure at 1:21 AM on October 28, 2022 [9 favorites]
You can send a check this way, Metafilter welcomes a paper check! It is explicitly noted on the funding page:
You can send a paper check (or cheque) to:
MetaFilter
PO Box 345
Randolph VT 05060
If you're a member, please add your username to the check.
posted by charmedimsure at 1:21 AM on October 28, 2022 [9 favorites]
It would be possible to run TCP/IP over this. Some small tweaks on RFC 2549..
If you could put it on the blockchain, then we could do the IPO. and make an NFT.
let's call it Checkblame
posted by chavenet at 1:57 AM on October 28, 2022 [1 favorite]
If you could put it on the blockchain, then we could do the IPO. and make an NFT.
let's call it Checkblame
posted by chavenet at 1:57 AM on October 28, 2022 [1 favorite]
My understanding is that the reason you can deposit checks by image without a physical artifact began with grounded flights after September 11th.
This is true. There had long been talk about transmitting scans electronically and a few banks had even made small steps in that direction since they have always been allowed to settle with their counterparties in any way they damn well please, but with the large number of different banks getting them all to agree was like herding cats. Plus, there was always some concern by the lawyers about changing anything because nobody wants to be a test case, and for good reason. It wasn't super common, but some retail stores were already doing ACH conversions, too.
Then 9/11 happened, nothing could fly for nearly two weeks and things got hopelessly delayed, so they finally got Congress to give them the legal cover necessary to make it happen so that they wouldn't be screwed again. You could, of course, truck the checks, but then they ran the risk of having to give their customers money before the checks were actually cleared because of the rules on how long they can hold funds.
posted by wierdo at 2:31 AM on October 28, 2022
This is true. There had long been talk about transmitting scans electronically and a few banks had even made small steps in that direction since they have always been allowed to settle with their counterparties in any way they damn well please, but with the large number of different banks getting them all to agree was like herding cats. Plus, there was always some concern by the lawyers about changing anything because nobody wants to be a test case, and for good reason. It wasn't super common, but some retail stores were already doing ACH conversions, too.
Then 9/11 happened, nothing could fly for nearly two weeks and things got hopelessly delayed, so they finally got Congress to give them the legal cover necessary to make it happen so that they wouldn't be screwed again. You could, of course, truck the checks, but then they ran the risk of having to give their customers money before the checks were actually cleared because of the rules on how long they can hold funds.
posted by wierdo at 2:31 AM on October 28, 2022
Small sample size, but you can count on the Malaysians and Singaporeans i shared the subject of this FPP with just responded with variations of wtf. And the idea that the alternative must involve a third party service. What the hell are the banks for? These days even normal transfer of about 2 business days would be seen as too slow. And for my ADHD self, instant transfer IS a godsend.
posted by cendawanita at 2:36 AM on October 28, 2022
posted by cendawanita at 2:36 AM on October 28, 2022
But I'm not too shocked because I've gotten over most of that when I learned individual bank accounts can't do direct deposits to other (individual and business) accounts. Now I understand why Cashapp and Venmo are a thing. I tried explaining it to local friends, and if I get interrupted it's usually to say, "but surely you can just give them your bank account number at least?"
posted by cendawanita at 2:38 AM on October 28, 2022 [3 favorites]
posted by cendawanita at 2:38 AM on October 28, 2022 [3 favorites]
Yes, this does feel a bit retro. This is how it worked when I lived in the US 15 years ago.
I will just quickly say that here in the Netherlands you can send money from your bank account to someone else's bank account in a minute or so, by pushing some buttons on your phone. And this is all done by your bank - no third-party services. It is how I pay online too for everything here.
I was surprised Mefi's donation page didn't just have a Routing number which I could then use to send USD directly without fees. My US family still doesn't completely understand why all I need is the routing number (written right there on their checks!) and I can send over money ASAP. These intermediaries still make me mad and I refuse to use Paypal/Venmo unless its an emergency.
posted by vacapinta at 2:54 AM on October 28, 2022 [3 favorites]
I will just quickly say that here in the Netherlands you can send money from your bank account to someone else's bank account in a minute or so, by pushing some buttons on your phone. And this is all done by your bank - no third-party services. It is how I pay online too for everything here.
I was surprised Mefi's donation page didn't just have a Routing number which I could then use to send USD directly without fees. My US family still doesn't completely understand why all I need is the routing number (written right there on their checks!) and I can send over money ASAP. These intermediaries still make me mad and I refuse to use Paypal/Venmo unless its an emergency.
posted by vacapinta at 2:54 AM on October 28, 2022 [3 favorites]
Like, when I saw "online bill payment", this is what I assume.
To quote:
JomPAY allows you to collect payments from your customers using the Malaysian Banking system. Through JomPAY, the Banks in Malaysia become payment collection channels for your business. You only need to establish a relationship with 1 Bank to collect payments through 40 Banks in Malaysia. Your customers can pay you from any of the 42 Banks.
But the instant/normal direct transfers are so easy, most people just as likely would use that, especially for small-time operations.
The key does seem to be the willingness for the banking sector to actually work together. Probably this is where America's lack of presence in international standard-setting bodies shows itself in daily civilian life. In my line of work, I see Visa etc all the time (whatever), but at least the other central banks of the "developed world" do show up too. Social embarrassment only works if the bank governors show up and see what other countries are doing. What's left? Influencer-style tiktoks??
posted by cendawanita at 3:03 AM on October 28, 2022 [1 favorite]
To quote:
JomPAY allows you to collect payments from your customers using the Malaysian Banking system. Through JomPAY, the Banks in Malaysia become payment collection channels for your business. You only need to establish a relationship with 1 Bank to collect payments through 40 Banks in Malaysia. Your customers can pay you from any of the 42 Banks.
But the instant/normal direct transfers are so easy, most people just as likely would use that, especially for small-time operations.
The key does seem to be the willingness for the banking sector to actually work together. Probably this is where America's lack of presence in international standard-setting bodies shows itself in daily civilian life. In my line of work, I see Visa etc all the time (whatever), but at least the other central banks of the "developed world" do show up too. Social embarrassment only works if the bank governors show up and see what other countries are doing. What's left? Influencer-style tiktoks??
posted by cendawanita at 3:03 AM on October 28, 2022 [1 favorite]
Banks aren't flying plane loads of checks to a clearing house anymore, they're exchanging images of checks
By fax, I really hope.
posted by Phanx at 4:00 AM on October 28, 2022 [5 favorites]
By fax, I really hope.
posted by Phanx at 4:00 AM on October 28, 2022 [5 favorites]
I will just quickly say that here in the Netherlands you can send money from your bank account to someone else's bank account in a minute or so, by pushing some buttons on your phone. And this is all done by your bank - no third-party services. It is how I pay online too for everything here.
Pretty much the same here in Germany, even though we're generally not the greatest at digital stuff, and are overly reliant on fax machines. I knew that the US was still reliant on cheques (someone I know was treasurer for a non-US Worldcon and had *opinions* about cheques and their necessity) but I hadn't realised that even the "online" option was sometimes secretly a cheque in disguise.
posted by scorbet at 4:50 AM on October 28, 2022
Pretty much the same here in Germany, even though we're generally not the greatest at digital stuff, and are overly reliant on fax machines. I knew that the US was still reliant on cheques (someone I know was treasurer for a non-US Worldcon and had *opinions* about cheques and their necessity) but I hadn't realised that even the "online" option was sometimes secretly a cheque in disguise.
posted by scorbet at 4:50 AM on October 28, 2022
I like to pay bills old school because then I walk to the post office to mail them which is very healthy for me. Also, Eugenie Clark stamps rock.
posted by JanetLand at 5:52 AM on October 28, 2022 [3 favorites]
posted by JanetLand at 5:52 AM on October 28, 2022 [3 favorites]
I personally do not allow anyone to withdraw arbitrary amounts from my bank account. Things that are fixed amounts like the mortgage are ok but certainly not utility bills. YMMV
Granted. I should have clarified that my utility companies have my ACH info stored in their system but I don’t use autopay. I initiate payment from their billing site manually every month after receiving the bill.
posted by AndrewInDC at 5:55 AM on October 28, 2022 [2 favorites]
Granted. I should have clarified that my utility companies have my ACH info stored in their system but I don’t use autopay. I initiate payment from their billing site manually every month after receiving the bill.
posted by AndrewInDC at 5:55 AM on October 28, 2022 [2 favorites]
Only one of these checks has been lost in the mail compared with the percentage of ours (that is, issued and mailed by us), so maybe the bank has some kind of hookup with the USPS that makes delivery more reliable.
They are presorting by zip code and dropping them off at a processing centre eliminating several opportunities for error.
posted by Mitheral at 5:57 AM on October 28, 2022 [2 favorites]
They are presorting by zip code and dropping them off at a processing centre eliminating several opportunities for error.
posted by Mitheral at 5:57 AM on October 28, 2022 [2 favorites]
I'm not too shocked because I've gotten over most of that when I learned individual bank accounts can't do direct deposits to other (individual and business) accounts.
There are US banks that allow consumer accounts to send ACH transactions to arbitrary accounts from their online banking website, but for the most part, it's only a feature of business accounts.
More frequently, but still rarely, they will allow you to set up accounts that you can transfer to/from, but that's intended to allow you to transfer money between different accounts you have at separate banks, not for sending your roommate the rent money or whatever. Though in most cases you can use it to do something like that if they're willing to help you get it set up. Typically it involves the bank sending the prospective account some amount of money less than a dollar and having you confirm the amount sent to verify that you entered the correct information, hence the need for cooperation on the part of the owner of the account you want to deposit money into.
It's just easier to walk into their bank with a wad of cash and deposit into their account. That's how my boss paid me for some years after I went remote. Well, sometimes he'd deposit a check, but either way the point is the same.
posted by wierdo at 6:11 AM on October 28, 2022 [1 favorite]
There are US banks that allow consumer accounts to send ACH transactions to arbitrary accounts from their online banking website, but for the most part, it's only a feature of business accounts.
More frequently, but still rarely, they will allow you to set up accounts that you can transfer to/from, but that's intended to allow you to transfer money between different accounts you have at separate banks, not for sending your roommate the rent money or whatever. Though in most cases you can use it to do something like that if they're willing to help you get it set up. Typically it involves the bank sending the prospective account some amount of money less than a dollar and having you confirm the amount sent to verify that you entered the correct information, hence the need for cooperation on the part of the owner of the account you want to deposit money into.
It's just easier to walk into their bank with a wad of cash and deposit into their account. That's how my boss paid me for some years after I went remote. Well, sometimes he'd deposit a check, but either way the point is the same.
posted by wierdo at 6:11 AM on October 28, 2022 [1 favorite]
I remember getting all my checks back with each bank statement, but I don’t remember them having cuts in them.
When I helped clean out my grandparents' things, some of their old financial instruments were voided this way.
posted by snuffleupagus at 6:40 AM on October 28, 2022 [2 favorites]
When I helped clean out my grandparents' things, some of their old financial instruments were voided this way.
posted by snuffleupagus at 6:40 AM on October 28, 2022 [2 favorites]
On the subject of bill payments... I work for a small business that receives payments from large ones, and one of the most irritating recent developments is that they've switched from checks to mailed pictures of credit cards, which they expect you to enter into your card processing machine, paying high card-not-present fees, all presumably so they can skim off a fraction of their payment to you. They generally offer to send a check on request, though that requires calling them. And now I'm seeing ones that don't even offer that, or offer the "convenient alternative" of an ACH transfer, but only for another fee, natch. You have to pay them to get paid.
The virtual credit cards come with warnings to enter the amount exactly, but they seemingly have no way to enforce this, so I've taken to leaving them a few cents -- you know, as a tip. May their books never be reconciled.
posted by alexei at 7:05 AM on October 28, 2022 [4 favorites]
The virtual credit cards come with warnings to enter the amount exactly, but they seemingly have no way to enforce this, so I've taken to leaving them a few cents -- you know, as a tip. May their books never be reconciled.
posted by alexei at 7:05 AM on October 28, 2022 [4 favorites]
lawrencium: "The current failure modes we are discovering are:
Cheque gets lost in the post or is delayed
…
"
My organization had to refund about 1500 people for an event that would have been held in May 2020, and used a service, checkissuing.com. They were easy enough to work with (in case you ever find yourself in a similar position)—upload a spreadsheet of payees and hit "send," pretty much.
But I was kind of shocked at how sketchy the mail delivery was. All the returned mail came to me, and it was left to me to hunt down the intended recipients. In one memorable case, the post office marked an envelope as "undeliverable address" but it was to an address in my own neighborhood that I knew was valid.
posted by adamrice at 7:17 AM on October 28, 2022
Cheque gets lost in the post or is delayed
…
"
My organization had to refund about 1500 people for an event that would have been held in May 2020, and used a service, checkissuing.com. They were easy enough to work with (in case you ever find yourself in a similar position)—upload a spreadsheet of payees and hit "send," pretty much.
But I was kind of shocked at how sketchy the mail delivery was. All the returned mail came to me, and it was left to me to hunt down the intended recipients. In one memorable case, the post office marked an envelope as "undeliverable address" but it was to an address in my own neighborhood that I knew was valid.
posted by adamrice at 7:17 AM on October 28, 2022
I'm a banker and was working in the branches when this was first introduced way back when.
I don't know if this has been said or if it's just obvious but when you use online bill pay it's still fairly rare for your bank to actually cut and mail a check. You'll note that when you setup your bill payments you select when to send the payment and it'll show you when it will get there (so you can ensure it's ahead of the due date). With a lot of vendors you'll note that it's the next day or two. That's because they have an agreement with the bank to process those payments electronically.
posted by VTX at 7:53 AM on October 28, 2022
I don't know if this has been said or if it's just obvious but when you use online bill pay it's still fairly rare for your bank to actually cut and mail a check. You'll note that when you setup your bill payments you select when to send the payment and it'll show you when it will get there (so you can ensure it's ahead of the due date). With a lot of vendors you'll note that it's the next day or two. That's because they have an agreement with the bank to process those payments electronically.
posted by VTX at 7:53 AM on October 28, 2022
There are also third parties now, like ClickPay, that will do an ACH transfer for you, basically. Landlords prefer them to getting paper checks for obvious reasons, so they will set up the arrangements for their tenants. Not sure whether they don't charge for mysterious Reg E reasons or because they make so much off people paying with their credit cards, which they do charge for, that they can afford to do ACH for free for the optics.
I miss my "mysterious trust fund" days.
posted by praemunire at 7:59 AM on October 28, 2022
I miss my "mysterious trust fund" days.
posted by praemunire at 7:59 AM on October 28, 2022
Melio is a B2B only version of ClickPay, and they're open about that:
How does Melio make money?
Melio is a free service for small businesses. There are no set-up costs or subscription fees. As a small business, paying your bills shouldn't carry costly fees. That's why Melio is free to use when you pay by bank transfer (ACH). Receiving payments is also free, plus there's no need for the payee to register an account. Want to keep your cash flow? Melio offers the option to pay your business bills via credit card* at a low, tax-deductible fee of 2.9%. This is how Melio generates its revenue.
posted by snuffleupagus at 8:05 AM on October 28, 2022
How does Melio make money?
Melio is a free service for small businesses. There are no set-up costs or subscription fees. As a small business, paying your bills shouldn't carry costly fees. That's why Melio is free to use when you pay by bank transfer (ACH). Receiving payments is also free, plus there's no need for the payee to register an account. Want to keep your cash flow? Melio offers the option to pay your business bills via credit card* at a low, tax-deductible fee of 2.9%. This is how Melio generates its revenue.
posted by snuffleupagus at 8:05 AM on October 28, 2022
Just as a tangent on this, I hate Facebook/Meta as much as anyone, but their Facebook Pay system really is brilliant. Instant, as in instant. I had a friend who was moving cross-country and his car broke down, and he was broke. Tried to pay for the tow with his debit, declined. He asked if I could help. I FB paid him the cash, said try it again, boom. This was all in the span of just a couple minutes. That's the way transfers should work. I've never had a CashApp, Zelle, POPmoney or any other kind of bank transfer happen instantly like that. Why not?
posted by xedrik at 8:10 AM on October 28, 2022
posted by xedrik at 8:10 AM on October 28, 2022
Typically it involves the bank sending the prospective account some amount of money less than a dollar and having you confirm the amount sent to verify that you entered the correct information
SO THAT'S WHY US SERVICES I'VE USED (eg PayPal) DO THAT USD1 CHARGE! *is enlightened*
posted by cendawanita at 8:25 AM on October 28, 2022
SO THAT'S WHY US SERVICES I'VE USED (eg PayPal) DO THAT USD1 CHARGE! *is enlightened*
posted by cendawanita at 8:25 AM on October 28, 2022
I'm a staff accountant working mostly with B2B/Wholesale. Can confirm, your bank's online bill pay will send me a paper check. Even more fun is if one of my customers uses the same bank as another, and they both pay me through the online bill pay on the same day, both of their checks might be in the same envelope. My only gripe is when the customer's banking name is different than what's in my system (usually a dba) and there's no invoice number on the check. We do accept ACH/EFT payments, but some customers report that their banks charge them too-high fees for that. Either saves us a bit compared to what we pay the credit card companies.
I have vendors that prefer, or only take, checks. I have vendors who don't take electronic/ACH type payments and charge "convenience fees" for credit card payments. They also get checks.
This is only the view from a wholesale/business-to-business perspective. On the personal side, I haven't had a physical checkbook in years; pretty much everything is auto-paid from my bank account or paid online with my debit card. Even my rent is paid by bank-to-bank transfer. My father still sends checks for my birthday, and my grandparents send me money orders, but that's probably a generational thing.
posted by MuChao at 8:27 AM on October 28, 2022
I have vendors that prefer, or only take, checks. I have vendors who don't take electronic/ACH type payments and charge "convenience fees" for credit card payments. They also get checks.
This is only the view from a wholesale/business-to-business perspective. On the personal side, I haven't had a physical checkbook in years; pretty much everything is auto-paid from my bank account or paid online with my debit card. Even my rent is paid by bank-to-bank transfer. My father still sends checks for my birthday, and my grandparents send me money orders, but that's probably a generational thing.
posted by MuChao at 8:27 AM on October 28, 2022
For the USians, at least you have competition?
According to Wikipedia, Canadian banks are the 5th, 6th, 9th, 10th, and 11th biggest in North America.
Yet Canada's population and economy is maybe 10% of yours. What?
It's because those five control maybe 80-85 market share, with the rest taken up mostly by small credit unions.
And they have long operated in an oligopoly, with the competition aspects feebly regulated, and the government actively quashing attempts at foreign competition entering the market.
So of course they made it easy to transfer money between them (creating Interac originally just for themselves), because it reinforced their collective competitive advantage. Why bank with an inconvenient other bank when you could bank with a gigantic convenient bank?
Then, because this was too blatantly unfair for even our competition bureau, the government forced them to make participation in Interac available to all other banks and credit unions on the same terms, and now we have a nice thing, but only by accident.
The US could never have and probably can never create something quite like it, because the extent of collaboration involved arose due to the oligopoly, and only after became universal. The only way would be for the government to create it, and well... it's got other things to do and banks love payment fees and have lobbyists. So in my inexpert opinion, I think you might be stuck without a more universal interbank network, but you also probably get higher returns on savings than those that bank at Canadian oligopoly banks and other benefits of competition.
posted by lookoutbelow at 9:23 AM on October 28, 2022
According to Wikipedia, Canadian banks are the 5th, 6th, 9th, 10th, and 11th biggest in North America.
Yet Canada's population and economy is maybe 10% of yours. What?
It's because those five control maybe 80-85 market share, with the rest taken up mostly by small credit unions.
And they have long operated in an oligopoly, with the competition aspects feebly regulated, and the government actively quashing attempts at foreign competition entering the market.
So of course they made it easy to transfer money between them (creating Interac originally just for themselves), because it reinforced their collective competitive advantage. Why bank with an inconvenient other bank when you could bank with a gigantic convenient bank?
Then, because this was too blatantly unfair for even our competition bureau, the government forced them to make participation in Interac available to all other banks and credit unions on the same terms, and now we have a nice thing, but only by accident.
The US could never have and probably can never create something quite like it, because the extent of collaboration involved arose due to the oligopoly, and only after became universal. The only way would be for the government to create it, and well... it's got other things to do and banks love payment fees and have lobbyists. So in my inexpert opinion, I think you might be stuck without a more universal interbank network, but you also probably get higher returns on savings than those that bank at Canadian oligopoly banks and other benefits of competition.
posted by lookoutbelow at 9:23 AM on October 28, 2022
lookoutbelow: "you also probably get higher returns on savings than those that bank at Canadian oligopoly banks and other benefits of competition."
My bank, USAA, is currently paying 0.01% interest. If you've got at least US$10,000, you can put that in a "high-interest" account paying 0.1%.
posted by adamrice at 9:57 AM on October 28, 2022
My bank, USAA, is currently paying 0.01% interest. If you've got at least US$10,000, you can put that in a "high-interest" account paying 0.1%.
posted by adamrice at 9:57 AM on October 28, 2022
True, but the point is still valid, I think.
posted by praemunire at 10:05 AM on October 28, 2022
posted by praemunire at 10:05 AM on October 28, 2022
We used to rail on (UK) BACS account-account transfers incidentally because while always free, it used to take up to 3 days to clear. Which given it started as an ACH service to bypass the need for cheques in 1972 was understandable. You could pay a fee for the same-day service (CHAPS) that also allowed a higher payment threshold if you did it from a bank counter. I think the only time I ever used that was to send an eyewatering deposit to the solicitors for my first mortgage.
Nowadays, you have Faster Payments run by the same people as Bacs that usually clears in a minute or two, and should always clear by end of business day. Plus reliable direct debits and easy, guaranteed current account transfer between banks (doing that soon - free £200 reward for switching). Of course, it's only that way due to government regulation, as a result of previously being part of the EU-wide SEPA system for easy cross-country banking, and the Brexit nutters haven't got round to ripping it up yet.
Finding out the US banking system is basically still in the 1970s when electronic bank transfers were new and suspicious-looking, because of a total lack of bank co-operation, guarantees and government regulation to make ordinary peoples life easier is not surprising when I stop to think about it...
posted by Absolutely No You-Know-What at 10:32 AM on October 28, 2022
Nowadays, you have Faster Payments run by the same people as Bacs that usually clears in a minute or two, and should always clear by end of business day. Plus reliable direct debits and easy, guaranteed current account transfer between banks (doing that soon - free £200 reward for switching). Of course, it's only that way due to government regulation, as a result of previously being part of the EU-wide SEPA system for easy cross-country banking, and the Brexit nutters haven't got round to ripping it up yet.
Finding out the US banking system is basically still in the 1970s when electronic bank transfers were new and suspicious-looking, because of a total lack of bank co-operation, guarantees and government regulation to make ordinary peoples life easier is not surprising when I stop to think about it...
posted by Absolutely No You-Know-What at 10:32 AM on October 28, 2022
The 70's-nature of bank transfers may finally be improving, pretty soon here. We'll see how it goes in practice, but FedNow is set to roll out mid-2023. It's starting with real-time account-to-account transfers.
posted by CrystalDave at 10:36 AM on October 28, 2022 [1 favorite]
posted by CrystalDave at 10:36 AM on October 28, 2022 [1 favorite]
FedNow is mentioned briefly in the United States section of "Bank transfers as payment method" by Patrick McKenzie in his Bits About Money newsletter (previously). That essay discusses India, Japan, the US, and Europe as case studies.
Also check out his entries "Financial innovation is actually happening" and "Community Banking and Fintech":
Also check out his entries "Financial innovation is actually happening" and "Community Banking and Fintech":
This is the largest reason why in-place upgrades to the U.S. financial system are slow. Coordinating the Faster ACH rollout took years, and the community bank lobby was loudly in favor of delaying it, to avoid disadvantaging themselves competitively versus banks with more capability to write software (and otherwise adapt operationally to the challenges same-day ACH posed).posted by brainwane at 10:55 AM on October 28, 2022
The virtual credit cards come with warnings to enter the amount exactly, but they seemingly have no way to enforce this, so I've taken to leaving them a few cents -- you know, as a tip. May their books never be reconciled.
Heh. My partner is in accounting. Came home complaining one day about how they spent over THREE HOURS trying to find a missing penny.
One.
Penny.
On an account that had hundreds of thousands of dollars flow through it monthly.
Their accountant brain could not see my pragmatist logic of writing it off rather than spend the payroll for that was, obviously, way more than a penny. They also laughed when I suggested they just pay the damn penny and get on to more important things.
I salute your subversion.
posted by a non mouse, a cow herd at 11:10 AM on October 28, 2022 [5 favorites]
Heh. My partner is in accounting. Came home complaining one day about how they spent over THREE HOURS trying to find a missing penny.
One.
Penny.
On an account that had hundreds of thousands of dollars flow through it monthly.
Their accountant brain could not see my pragmatist logic of writing it off rather than spend the payroll for that was, obviously, way more than a penny. They also laughed when I suggested they just pay the damn penny and get on to more important things.
I salute your subversion.
posted by a non mouse, a cow herd at 11:10 AM on October 28, 2022 [5 favorites]
And chalk me up to one who did not know about this service. But, the last time I needed a check was 9 years ago, so that might explain it.
posted by a non mouse, a cow herd at 11:11 AM on October 28, 2022
posted by a non mouse, a cow herd at 11:11 AM on October 28, 2022
Came home complaining one day about how they spent over THREE HOURS trying to find a missing penny.
Thank you for that terrifying flashback!
posted by MuChao at 11:15 AM on October 28, 2022 [2 favorites]
Thank you for that terrifying flashback!
posted by MuChao at 11:15 AM on October 28, 2022 [2 favorites]
I've never had a CashApp, Zelle, POPmoney or any other kind of bank transfer happen instantly like that. Why not?
That's a great question. Zelle is essentially instant for me, as are the paid transfers CashApp and PayPal do. CashApp uses Visa/MC and PayPal gives the option of Visa/MC or what I think is one of the ATM networks. Either way my available balance updates within a few seconds. Fully posting takes at least a day, of course, but even my crappy bank allows immediate withdrawal of at least $1500.(could be more, but I haven't tried) Free PayPal transfers always credit the next day for me, CashApp takes exactly as long as they say it will. (3 days last I checked) CashApp's transfers annoy me, though, because they do the Visa/MC payment either way, they just delay it by 3 days if you don't want to pay. PayPal's free transfer is just an ACH, which they process the same day, so they aren't artificially delaying the process. (Cue shock and horror, including my own, that there is something positive to be said about PayPal)
I'm pretty sure the relevant regulations would allow banks to delay availability until the next business day, but mine chooses not to, for whatever reason. Maybe they have an agreement with Visa that requires them to make the funds available immediately.
posted by wierdo at 11:51 AM on October 28, 2022
That's a great question. Zelle is essentially instant for me, as are the paid transfers CashApp and PayPal do. CashApp uses Visa/MC and PayPal gives the option of Visa/MC or what I think is one of the ATM networks. Either way my available balance updates within a few seconds. Fully posting takes at least a day, of course, but even my crappy bank allows immediate withdrawal of at least $1500.(could be more, but I haven't tried) Free PayPal transfers always credit the next day for me, CashApp takes exactly as long as they say it will. (3 days last I checked) CashApp's transfers annoy me, though, because they do the Visa/MC payment either way, they just delay it by 3 days if you don't want to pay. PayPal's free transfer is just an ACH, which they process the same day, so they aren't artificially delaying the process. (Cue shock and horror, including my own, that there is something positive to be said about PayPal)
I'm pretty sure the relevant regulations would allow banks to delay availability until the next business day, but mine chooses not to, for whatever reason. Maybe they have an agreement with Visa that requires them to make the funds available immediately.
posted by wierdo at 11:51 AM on October 28, 2022
Came home complaining one day about how they spent over THREE HOURS trying to find a missing penny.
I once sat in my bank branch for an hour while they tried to figure this out: I had paid a roofing contractor with a check that was $8,000 exactly. He deposited it at his small town bank branch; it cleared on my checking account as $8,000.12. Someone at the small-town bank either mistyped, or figured I wouldn't notice a few cents difference to make their deposits balance.
I figured my bank would have some method for disputing, charging back, etc., or otherwise fixing an obviously incorrect transaction, but for the first 45 minutes it seemed impossible. You can't just fix a inter-bank transaction.
My bank's branch manager finally stepped in and gave my frustrated banker the account number for the branch's "petty cash" that they use to cover things when their drawers are off, and paid me $0.12 out of that.
As far as inter-bank transactions: people need to remember that until thirty years ago, banks were irreconcilably tied to the state they were in. If I was in Moorhead Minnesota and tried to deposit at "my" bank, they couldn't help me so they'd send me 1,000 feet over the river to the branch in Fargo ND, which WAS my bank. When I worked for US Bank, they weren't one US Bank, they were US Bank of South Dakota National Association, US Bank Minnesota NA, US Bank NA of Wisconsin, etc., etc. -- every state was its own legal entity and didn't overlap. Where we are today is slowly, slowly getting here from a very archaic system.
My bank doesn't hold billpay amounts when they send the check -- they are taken out of my account when the check clears, not earlier. I use it to pay my rent because my landlord accepts nothing but checks mailed to a PO box; I set up my student loan payments through there because I can't set up my automatic payments through my student loans the way I want so I mail them a check for the amount I want to pay (larger than what's due) and billpay takes care of it. For a while I owed my dad some money so he got a crisp, auto-generated check every month. It's a very handy system. As someone mentioned upthread, it seems safer than trusting the other end to take what they feel due -- I say what I'm paying and when, not you.
posted by AzraelBrown at 12:06 PM on October 28, 2022 [2 favorites]
I once sat in my bank branch for an hour while they tried to figure this out: I had paid a roofing contractor with a check that was $8,000 exactly. He deposited it at his small town bank branch; it cleared on my checking account as $8,000.12. Someone at the small-town bank either mistyped, or figured I wouldn't notice a few cents difference to make their deposits balance.
I figured my bank would have some method for disputing, charging back, etc., or otherwise fixing an obviously incorrect transaction, but for the first 45 minutes it seemed impossible. You can't just fix a inter-bank transaction.
My bank's branch manager finally stepped in and gave my frustrated banker the account number for the branch's "petty cash" that they use to cover things when their drawers are off, and paid me $0.12 out of that.
As far as inter-bank transactions: people need to remember that until thirty years ago, banks were irreconcilably tied to the state they were in. If I was in Moorhead Minnesota and tried to deposit at "my" bank, they couldn't help me so they'd send me 1,000 feet over the river to the branch in Fargo ND, which WAS my bank. When I worked for US Bank, they weren't one US Bank, they were US Bank of South Dakota National Association, US Bank Minnesota NA, US Bank NA of Wisconsin, etc., etc. -- every state was its own legal entity and didn't overlap. Where we are today is slowly, slowly getting here from a very archaic system.
My bank doesn't hold billpay amounts when they send the check -- they are taken out of my account when the check clears, not earlier. I use it to pay my rent because my landlord accepts nothing but checks mailed to a PO box; I set up my student loan payments through there because I can't set up my automatic payments through my student loans the way I want so I mail them a check for the amount I want to pay (larger than what's due) and billpay takes care of it. For a while I owed my dad some money so he got a crisp, auto-generated check every month. It's a very handy system. As someone mentioned upthread, it seems safer than trusting the other end to take what they feel due -- I say what I'm paying and when, not you.
posted by AzraelBrown at 12:06 PM on October 28, 2022 [2 favorites]
I was thinking vaguely that maybe the banks can use the ACH float for things they can't with deposits, once title to the funds passes to them; or that it has some other mild beneficial statistical effect on their balance sheet.
But having read the comments in the thread, it probably has more to do with the size of the bank and the happenstance of each bank's business processes. And maybe also whether the payee is being sent a check in the mail or has registered ACH info.
posted by snuffleupagus at 12:21 PM on October 28, 2022
But having read the comments in the thread, it probably has more to do with the size of the bank and the happenstance of each bank's business processes. And maybe also whether the payee is being sent a check in the mail or has registered ACH info.
posted by snuffleupagus at 12:21 PM on October 28, 2022
My theory is that credit unions and banks like this feature because if you do recurring online billpays, they can predict exactly when your money will be outbound.
It's also that the more features you're using on your bank account, the more of a pain in the ass it is to move to another bank. So if you have a bad customer service experience, for example, you have to decide if it's bad enough to deal with your mortgage payment and your electric bill and your car payment and your HOA dues etc. potentially getting messed up when you try to switch everything.
posted by Blue Jello Elf at 1:21 PM on October 28, 2022 [2 favorites]
It's also that the more features you're using on your bank account, the more of a pain in the ass it is to move to another bank. So if you have a bad customer service experience, for example, you have to decide if it's bad enough to deal with your mortgage payment and your electric bill and your car payment and your HOA dues etc. potentially getting messed up when you try to switch everything.
posted by Blue Jello Elf at 1:21 PM on October 28, 2022 [2 favorites]
I used online bill pay for rent. The bank takes the amount of money from my account, and it then takes a week for my landlord to receive it. So the bank can hold my money for at least a week? If the landlord does not withdraw the check, it may take longer. I think the bank is making money from this transaction flow...
posted by jimlucf at 2:40 PM on October 28, 2022
posted by jimlucf at 2:40 PM on October 28, 2022
I wish I could pay rent by having my bank mail my landlord a check since that's the only time I ever write checks. But my landlord is paranoid and only wants it slipped under his door. When the pandemic first happened he left the city for a little while and wanted us to send him a wire transfer. An actual wire transfer. Zelle or any free transfer app was not an option. It had to be an old school wire transfer that cost me $20 just to pay rent. Ah the joys of independent landlords...
posted by downtohisturtles at 3:17 PM on October 28, 2022
posted by downtohisturtles at 3:17 PM on October 28, 2022
I’m just sitting here wondering where people still have to use checks… I was renting a room and ran out of checks and to rush order it required me to order 6 checkbooks at once. More than five years later I’m still not through the first checkbook…
posted by brook horse at 4:28 PM on October 28, 2022
posted by brook horse at 4:28 PM on October 28, 2022
I buy food from a place that offers a small discount for payment by check.
posted by aniola at 6:45 PM on October 28, 2022
posted by aniola at 6:45 PM on October 28, 2022
alexei' On the subject of bill payments... I work for a small business that receives payments from large ones... You have to pay them to get paid.
How big does thescam skim have to be before it materially affects the deals you've struck and then becomes breach of contract?
posted by k3ninho at 11:38 PM on October 28, 2022 [1 favorite]
How big does the
posted by k3ninho at 11:38 PM on October 28, 2022 [1 favorite]
he got a crisp, auto-generated check every month. It's a very handy system. As someone mentioned upthread, it seems safer than trusting the other end to take what they feel due -- I say what I'm paying and when, not you.
Here, the only way someone gets to take money from your account is when you have authorised them to do so in advance and it doesn't have to be that way. We use BPAY to pay our bills, which sends the payee a customer ID so the reconciliation process is (or can be) automated on their end. We can just send people money direct to their account from the banking app on our phone. We can schedule regular payments this way or just one-off payments and they go through in less than a minute. People buying and selling stuff on FB marketplace etc do this all the time when picking things up from strangers.
I didn't realise until now that, in the US, you can't just send money to someone's bank account. How quaint.
posted by dg at 3:24 PM on October 30, 2022
Here, the only way someone gets to take money from your account is when you have authorised them to do so in advance and it doesn't have to be that way. We use BPAY to pay our bills, which sends the payee a customer ID so the reconciliation process is (or can be) automated on their end. We can just send people money direct to their account from the banking app on our phone. We can schedule regular payments this way or just one-off payments and they go through in less than a minute. People buying and selling stuff on FB marketplace etc do this all the time when picking things up from strangers.
I didn't realise until now that, in the US, you can't just send money to someone's bank account. How quaint.
posted by dg at 3:24 PM on October 30, 2022
where people still have to use checks
No place I have to, I think, but several that make the credit card fee explicit and I don’t want to pay it. I think it’s a law for my city, maybe state government. And knowing how big the fee can be, I sometimes use checks to be that much kinder to the business I’m paying.
posted by clew at 4:06 PM on October 30, 2022 [1 favorite]
No place I have to, I think, but several that make the credit card fee explicit and I don’t want to pay it. I think it’s a law for my city, maybe state government. And knowing how big the fee can be, I sometimes use checks to be that much kinder to the business I’m paying.
posted by clew at 4:06 PM on October 30, 2022 [1 favorite]
My father still sends checks for my birthday, and my grandparents send me money orders, but that's probably a generational thing.
My mom also gives me birthday money but she'll hand me her phone and tell me to e-transfer it to myself. 😂
posted by emeiji at 8:16 PM on October 30, 2022 [2 favorites]
My mom also gives me birthday money but she'll hand me her phone and tell me to e-transfer it to myself. 😂
posted by emeiji at 8:16 PM on October 30, 2022 [2 favorites]
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