Payment of services via check vs electronic transfers
Payment of services via check vs electronic transfers
(OP)
In this day-and-age of electronic 'everything', why is it that payment for services to engineers/architects/consultants/contractors from clients is predominantly via a paper check?
Mainly talking about US-based payment system. Maybe it is just me and the region where I practice, but why are checks still used?
In Australia, by way on example, payment to everyone (companies, suppliers, individuals etc) is via electronic transfer undertaken by the PAYER without assistance from their bank. And that has been the system for at least the last 5 years, possibly more than 10 years. Even international payments can be undertaken by PAYERS without the banks assistance (the bank does provide the online portal).
I was at our US bank a few days ago asking why I cannot do the same here and they looked at me like I had two heads. Do I need to change banks, or is that the norm in the US?
Mainly talking about US-based payment system. Maybe it is just me and the region where I practice, but why are checks still used?
In Australia, by way on example, payment to everyone (companies, suppliers, individuals etc) is via electronic transfer undertaken by the PAYER without assistance from their bank. And that has been the system for at least the last 5 years, possibly more than 10 years. Even international payments can be undertaken by PAYERS without the banks assistance (the bank does provide the online portal).
I was at our US bank a few days ago asking why I cannot do the same here and they looked at me like I had two heads. Do I need to change banks, or is that the norm in the US?
RE: Payment of services via check vs electronic transfers
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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RE: Payment of services via check vs electronic transfers
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"!
RE: Payment of services via check vs electronic transfers
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
RE: Payment of services via check vs electronic transfers
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.
RE: Payment of services via check vs electronic transfers
RE: Payment of services via check vs electronic transfers
Cheers
Greg Locock
New here? Try reading these, they might help FAQ731-376: Eng-Tips.com Forum Policies http://eng-tips.com/market.cfm?
RE: Payment of services via check vs electronic transfers
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.
RE: Payment of services via check vs electronic transfers
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
RE: Payment of services via check vs electronic transfers
TTFN

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RE: Payment of services via check vs electronic transfers
RE: Payment of services via check vs electronic transfers
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.
RE: Payment of services via check vs electronic transfers
Do US employees of US companies still get paid by check these days?
RE: Payment of services via check vs electronic transfers
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.
RE: Payment of services via check vs electronic transfers
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
RE: Payment of services via check vs electronic transfers
RE: Payment of services via check vs electronic transfers
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
RE: Payment of services via check vs electronic transfers
RE: Payment of services via check vs electronic transfers
B.E.
You are judged not by what you know, but by what you can do.
RE: Payment of services via check vs electronic transfers
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
RE: Payment of services via check vs electronic transfers
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.
RE: Payment of services via check vs electronic transfers
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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RE: Payment of services via check vs electronic transfers
RE: Payment of services via check vs electronic transfers
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.
RE: Payment of services via check vs electronic transfers
Cheers
Greg Locock
New here? Try reading these, they might help FAQ731-376: Eng-Tips.com Forum Policies http://eng-tips.com/market.cfm?
RE: Payment of services via check vs electronic transfers
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
RE: Payment of services via check vs electronic transfers
TTFN

FAQ731-376: Eng-Tips.com Forum Policies
Need help writing a question or understanding a reply? forum1529: Translation Assistance for Engineers
Of course I can. I can do anything. I can do absolutely anything. I'm an expert!
RE: Payment of services via check vs electronic transfers
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
RE: Payment of services via check vs electronic transfers
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.
RE: Payment of services via check vs electronic transfers
Cheers
Greg Locock
New here? Try reading these, they might help FAQ731-376: Eng-Tips.com Forum Policies http://eng-tips.com/market.cfm?
RE: Payment of services via check vs electronic transfers
RE: Payment of services via check vs electronic transfers
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.
RE: Payment of services via check vs electronic transfers
I deposit paper checks by taking pictures of them with my phone in my bank's app.
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RE: Payment of services via check vs electronic transfers
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
RE: Payment of services via check vs electronic transfers
zdas: I will have to look into a Fidelity card. And yes, ripping off servicemen in war zones is a classic move.
RE: Payment of services via check vs electronic transfers
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
RE: Payment of services via check vs electronic transfers
B.E.
You are judged not by what you know, but by what you can do.
RE: Payment of services via check vs electronic transfers
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