That's pretty much the norm in the US. I know that customers of Wells Fargo can transfer money to another WF customer, but that's about it. The banks make a hefty fee ($35) for electronic transfers, so they're in no hurry to change the landscape. There are probably a few institutions that do provide free EFT. I used to have a setup for covering checks posted to my main checking account with money from my primary account, but that's going away, unless I'm willing to pay $12.50 PER TRANSACTION!! WTF!!

The few places where I've seen EFT in practice in the US is eBay and the IRS, but even the IRS one is based on the checking account. Given that I've only just gotten a smart-chipped credit card, while I know that Europe already had that in 1987, goes to show how backward the US is.

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Of course I can. I can do anything. I can do absolutely anything. I'm an expert!

Thanks for sharing your experiences. Seems I am not alone.

My brother in Australia owns a small commercial construction contracting company - he has not written or received a check for several years.

He receives ALL of his payments from his clients via bank transfer. The bank does NOT charge separate per-transaction fees for such, and it is all done by payER and payEE.

Indeed the US banking system is behind the rest of the world.

The guess the payER can keep on stating the "check is in the mail"!

My experience is VERY different. Using an ACH transfer is free for both the sender and receiver. All but one of my U.S. clients use ACH to pay me (I don't think I ever physically went to the bank in 2013). My clients in Australia use ACH also and it is free for both them and me. My clients in Romania, South Africa, and the UK all use international wire transfer which costs them around $50 and costs me $15/transfer. $15 to get paid an hour after a company in Johannesburg decides I'm worthy beats the heck out of 3-5 weeks for snail mail.

I got a Wells Fargo app for my smart phone last week that let's me electronically deposit a physical check from the office. It is pretty cool. You start the app and it prompts you to enter an amount, then walks you through taking a picture of both sides, then it compares the amount you entered to what it sees as the amount of the check, if they match you are told to mark the check "Electronically deposited" and store it for 5 days to ensure it is properly credited, then shred it. Looks like a great app, but it is limited to $1k/day and $5k in 30 days. I don't get many checks less than $5k so it isn't much use to me, but if you are working with the public on homeowner-sized jobs you might have some checks that could use it.

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist

Nice, David. There is some hope, then. Thanks for sharing.

I recently sold a car via private sale and the buyer and I agreed to payment via local bank/cashiers check, which I understood to be "as good as" cash. Well it is NOT. With the high end printers and scanners these days banks treat cashiers checks like any other check, with the 5-7 working day clearance times.

It is a confused situation. I have had money transferred electronically from Wells Fargo to ANZ Bank in Australia, but have been advised by another but smaller US bank that their system doesn't allow it because the account number is too long or the transfer instructions have letters as well as numbers...ridiculous. It is annoying to receive a US dollar check and for it to take 6 weeks for it to be collected, be charged a fee, and subjected to the vagaries of currency fluctuation.

I used a system called SWIFT for my USA clients to pay me electronically in Australia.

Cheers

Greg Locock


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Greg,

Yes, I have heard of SWIFT, and notably the SWIFT codes Link.

Australia uses a BSB code system, which works great for AU to AU transactions, but so good for overseas ones entering AU.

For a transaction initiated in the US, it is still done by a bank.

I do transfers from Australia to US often, all from the comfort of my own computer. From US to AU, I have to go to my bank in person, fill out a detailed form, complete the transaction before 11am otherwise it is a next-day transaction, then wait 3-4 days for the funds to appear...and of course pay ridiculous fees.

I got a handwritten check for less than the maximums so I decided to use the Wells Fargo phone app. I even photographed the check upside down just to make it challenging (actually it was a mistake). The app dinged and I got a message that the check was in my account, but the app went down before the transaction was complete. I'm anxious to see if it is robust enough to handle a handwritten check photographed upside down with a system fault in the middle of the transmission. So far it looks pretty robust.

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist

I expect that the app uses the same algorithms that the WF ATMs use, and they're fairly reliable, although there have been many occasions where the algorithm failed to find the check amount.

TTFN
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Of course I can. I can do anything. I can do absolutely anything. I'm an expert!

Surely you electronic payment guys miss the butterflies in the stomach feeling of going to the mailbox when you know a check is due. The fantasies of buying a new Ferrari, the soul crushing depression of a dead beat client, you'd be missing all that.

Banks make a lot of money off of wire transfer fees just as they do for overdraft and other fees. Its a complicated balance between maximizing income and minimizing the loss of customers. There is not much competition in the wire transfer market except for large volume users. My bank charges $75 for an international wire transfer and I have to personally go to the bank to arrange it (50 miles away). As a result I set-up an account with a foreign exchange trading company and now I can transfer any amount to any account in the world for a $20 wire transfer fee and good foreign exchange rate , if changing currency. And I do this with a simple e-mail request. I could do it with an Internet link.
The problem is that US anti-money laundering laws have gotten very strict in order to combat funding of terrorists, and tax evasion. Banks are required to know their customers and "qualify" them to make such transactions. This is too much hassle and too much liability for most bankers to be interested. A large percentage of the US population does not qualify for even a simple savings account.

Forgetting about international transfers for the moment, and all the fuss with anti-money laundering, terrorists funding etc, I am still perplexed why US business-to-US business payments are via paper checks. Surely electronic transfers via your bank's web portal (by the user/customer) is possible?

Do US employees of US companies still get paid by check these days?

Employees typically get paid with payroll service like ADP or PayChex which are electronic services.

I had a client try to pay with Square.com one time. It would have cost me ~2% to receive, so I told him to forget it and send me a check. And it was not that long ago that people used to pay for groceries at the supermarket with checks.

Yes paper checks are unnecessarily retro. Some of the American financial infrastructure is super high tech like stock trading, but other parts are creaky 19th century holdovers. I feel that way about the whole insurance industry and the IRS.

The IRS. I haven't sent them a check for the last 20 quarters. It is all electronic. Same with my state taxman (and New Mexico has to be close to the most backward place in the U.S.). I've been in business 12 years and I just opened my second box of checks. Everything is direct pay either from my checking account or via a credit card. I even pay the landscaper electronically.

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist

So glass99 and zdas04, what is the approximate % of times that you RECEIVE payments from US-based clients by paper check: 50%, 10%?

Depends on the year. Last year I got 4 checks which amounted to about 2% of my revenue and 8% of the transactions. So far this year has been odd and 100% of my income has come in paper checks (7 checks). That may change in March and I may not get another check this year. In my business I tend to have 0-4 concurrent clients and send out 0-9 invoices on the first of the month. I rarely have 50 invoices in a year like I had last year.

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist

David....I use the Wells Fargo app and have had good experience with it. I have very few clients that pay electronically, but I try to pay everything I can that way.

Be thankful for checks and the paper trail they leave. I spent half a day today with one of my customers bookkeeper tracking a discrepancy on a 1099, the customer sent me a 1099 for $1200, when I had only billed him for $720, It turned out he had included a check that was not payable to me in the file folder he gave to his book keeper. And of course today is the last day to get a form 1099 corrected.
B.E.

You are judged not by what you know, but by what you can do.

I never cease to be amazed at how much of a headache 1099's are Since the crash of 2008, virtually all of my work is overseas and those clients don't report earnings to the IRS so the bulk of my income does not have a 1099 paper trail, but I always do a few U.S. projects (Expert Witness, industry response to regulations, etc) and every year I get a letter from the IRS that due to a 1099 discrepancy I owe them $50-$150 over the tens of thousands that I've already paid them. My response is always to just pay it. The first year I really dug into it and had actually included the missing income in the non-1099 category, but it wasn't worth the audit to show them I did. After that I didn't even look into it, just paid. I'm not afraid of an IRS audit because I try to skate very far from the edges, but I don't want to give up the billable time to participate.

Ron, my extreme experiment with the deposit app resulted in a good image ((right side up) of the check attached to my account and the check deposited. Nice not to have to go to the bank for a $600 check. Wells Fargo frequently pisses me off, but everyone I have ever talked to was pissed off at their bank more often than not. The exchange rate that I get from them is just slightly worse than the rate I get from Fidelity with is the published $100 million transaction size rate.

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist

Ingenuity: In a typical year I receive ~50 paper checks and one wire. Overseas clients usually pay by wire.

For recurring payments, Chase Bank have their Quickpay service. The recipient has to have a Chase account, and the person paying has to register with Chase. I use that for a few things like paying my monthly maintenance to my co-op for my apartment. Its super clunky, and is no good for one time payments.

I don't know why electronic payments are not more readily available because checks are usually offered free by banks and they are more expensive to process than electronic transactions. Banks have no economic motive to hold up that train. I think the issue is that Americans are conservative romantics about their transactions. There have been no design changes to the dollar bills in over a century. Is it possible that a greenback could be another than green? Unthinkable! What about those giant 6ft long checks they hand over to lottery winners? Shooting someone a quick SMS to let em know they are millionaires is not the same thing.

"Employees typically get paid with payroll service like ADP or PayChex which are electronic services. "

Sure, electronic deposit, but paper paystub with voided check. I suppose there's probably a couple of people who actually receive an unvoided check.

"There have been no design changes to the dollar bills in over a century. Is it possible that a greenback could be another than green? Unthinkable! "

Perhaps you're only referring to the one dollar bill, but the 100 dollar bill just got a redesign only 6 years ago. Part of the reasoning for not making massive changes is that the dollar bill, unlike, say, the Croatian kuna http://upload.wikimedia.org/wikipedia/commons/9/94... is the lingua franca of both legitimate and illegitimate money transactions, since it is a very stable currency. Because of its stability, changes are undesirable, since historically, changes to currency have often been tied to devaluations.

Nevertheless, the US one dollar bill had a design change in 1964. US troops in WWII in Europe were paid with a different dollar bill, in case they needed to void the currency when captured.

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Of course I can. I can do anything. I can do absolutely anything. I'm an expert!

When I travel back to AUSTRALIA with US currency of significant amount (more than $1k, but less than $10k) I have to make sure my US bank gives $100 bills printed after 2006. My Aussie bank will not accept US currency before 2006 due to ease of counterfeit.

IRStuff: maybe you are right, the reason the euro is falling apart is they change their bank note design too much. Doesn't matter what some bureaucrat in Brussels says, if the man on the street can't picture what a euro is then you are lost.

Ingenuity: They may have buffed the $100 bill a bit in 2006, but its still green and still has Mr Benjamin Franklin on it. Changing either of these two things would be tantamount to ending capitalism.

Does anyone accept bitcoin? Its a bit out there, but its much cheaper for currency exchange. Banks charge ~2% and bitcoin is essentially free.

Ingenuity, do you not have a foreign exchange debit card? We get them free from the post office, you just load them up (electronically) with native currency, pop them into an atm at your destination, or use them like a credit card.

Cheers

Greg Locock


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I've got a debit card from an institution that doesn't have ATM's so all ATM fees are waived and it has a great exchange rate. I've used it at ATM's all over the world and it works well everywhere. The biggest difference between it and a pre-paid card is that the bank ATM fee is deducted from the amount you loaded on the pre-paid card.

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist

Bitcoin sounds good, in principle, but after the couple of debacles such as the loss of bitcoins at Mt. Gox last year to the tune of $25M. I certainly wouldn't touch it. Bad enough that my checking account is essentially in virtual dollars, but at least, it's recoverable, due to the pile of documentation that comes with it. With bitcoin, for whatever reason, the virtualness of the money seems to be easily converted to vaporware. Almost a good reason to convert everything into a pile of Ben Franklins and stick them under my bed.

TTFN
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Of course I can. I can do anything. I can do absolutely anything. I'm an expert!

Bitcoin reminds me of the days when every bank could issue currency and they were required to have adequate gold or silver reserves to redeem their certificates. Most banks were diligent about this and turning the certificates in for tangible metals was honored when demanded. Some weren't. In bank specie or Bitcoin you are simply trusting the integrity of the issuer. With government issued specie you are relying on the integrity of the government. I think I trust Bitcoin providers more than the government, but I know that the Interwebz is the dream venue for crooks and con men (just like Washington DC, come to think of it) so I have been unwilling to jump in yet.

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist

Greg,
These foreign exchange Debit cards? Are you getting these in Australia or the UK ? I have not heard of them in the UK . Unless you are talking about the post office Money Card.
I have a Bank issued debit card from a UK bank , but they bang me for a 2.99% service fee for any foreign exchange transaction.
The post office in the UK will do Pounds to Euros over the counter, they too have credit card which also charges you that same 2.99% fee.
B.E.

You are judged not by what you know, but by what you can do.

Australia. http://auspost.com.au/travel-id/travel-cards.html

Cheers

Greg Locock


New here? Try reading these, they might help FAQ731-376: Eng-Tips.com Forum Policies http://eng-tips.com/market.cfm?

I gave up on prepaid cards a few years ago. I had one, deposited money into it just before I left for Europe, but the first time I went to withdraw from it, it was declined, and several times more. Finally I went into a bank, waited an hour or so for someone who spoke English and could assist me, only to find out that the card had expired. The bank was happy to take the funds on the expired card, but I had to wait until returning to Australia before I could get the money back. I just carry cash and credit cards. In some countries, on my chest.

Any card based foreign currency exchange has not only the ~2% charge they actually show you on your credit/debit card statement, but they give you bad exchange rate too. The spread between buy and sell for currencies is another ~4% (i.e. another 2% when you buy something). Banks really rip you off for foreign currency transfers without you even knowing it. Trillions of dollars change hands on global foreign exchanges daily with fees measured in few basis points, but consumers get stuck with 4%. Its maddening.

Bitcoin is potentially the ultimate currency trading platform because you bypass the whole stupid bank ripoff and go to a private exchange. Unfortunately the exchanges are a bit sketchy right now, but the potential is there.

My two largest clients are big engineering firms, and both pay me by electronic transfer.

I deposit paper checks by taking pictures of them with my phone in my bank's app.

Hydrology, Drainage Analysis, Flood Studies, and Complex Stormwater Litigation for Atlanta and the South East - http://www.campbellcivil.com

Glass,
I think it really depends on the bank. When I use my Fidelity debit card, I can look up the exchange rate in the WSJ and the rate is get is really close to the $100 million quantity exchange rate and no ATM fees or foreign transaction fees. AmEX is about 5% worse exchange rate than Fidelity (and it doesn't work in ATM's). With Wells Fargo Visa it is closer to the airport kiosk rate and they pass on local bank ATM fee plus add a per-use ATM fee of their own. Chase is somewhere in between (I have two Chase cards, one of them is pretty close to the AmEx rate and no fee, the other is often worse than the airport kiosk rate plus they charge a 2% fee for all foreign transactions, I made a mistake and used that card in South Africa and a $500 purchase ended up costing me nearly $700). The difference in the two Chase cards seems to be that the crappy exchange-rate card does not have an annual fee and the other one has a $400 annual fee (the fee gets me into airport business class lounges even when I don't fly business class, some other benefits that seem to be worth the fee to me).

The variation between banks and products within a bank are pretty significant. My son had a Capital One card that he used once at the PX in Baghdad for a U.S. dollar denominated transaction on a U.S. Army facility, the add-on fees and exchange rates (they converted it to Iraqi and back to USD, each step with a fee and a crappy exchange rate) took up a page of the bill and ended up tripling the cost of the item. I was handling his bills while he was deployed and when I saw that bill I got him a new card from Chase and the minute he told me he had it I cancelled the Capital One card (he's a bomb tech and he sent me a photograph of the card sitting on a large pile of confiscated ordinance, next picture was a very large explosion, I guess that was one truly destroyed card).

With as much time as I spend out of the country, I've paid considerable attention to credit card/exchange rate/fee schedules and some of the terms are really appalling.

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist

beej67: do you get paid by wire transfer? Does you bank charge a fee for receiving wires? They hit me with $15 for domestic wires.

zdas: I will have to look into a Fidelity card. And yes, ripping off servicemen in war zones is a classic move.

Wires are a fee plus tax. ACH transfers are free. My clients in the U.S. use ACH (even though a couple of the call it "wire transfer"). I have a client in Australia who set up a U.S. bank account so that they can save the $35-50 wire-origination fee plus getting billed for the $15 at the other end. They say that setting up the account was free and with a minimum deposit level there aren't any fees. They picked a U.S. bank that has some sort of arrangement with their Brisbane bank so bank-to-bank transfers are also free. I don't know the details, but it is a sweet arrangement from my end.

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist

Greg, So the card you have is issued by the Australian post office. It looks pretty much the same as the one issued by the British post office.
B.E.

You are judged not by what you know, but by what you can do.

We have been paid exactly once by ACH. Our Wells account didn't charge a fee and it felt amazing to know we were getting paid on the spot. Otherwise I generally use the phone app to deposit checks.

This thread is reminding me we got 1099'd for a project we only proposed on. I almost feel forced to just lump it into our taxes and pay it to not cause havoc with the system.

I have a USAA atm card and it gives $25/month on ATM fees which includes most foreign machines. It really depends on how the machines charge for using them. Have used it so far in 17 countries, mostly third world, with no issues. I wonder what my mined Litecoins are worth now? Maybe it can buy me a Big Mac?

B+W Engineering and Design | Los Angeles Civil Engineer and Structural Engineer http://bwengr.com