Comments on: Why clearXchange is great for payments

By: Anonymous

Anonymous — Wed, 19 Dec 2012 23:36:52 +0000

The banks are playing the float game by taking out of the sending account but not putting it into the receiving account for 3 business days.
It is an electronic transfer. There is no need to prove funds availability.

By: dbasch

dbasch — Mon, 30 May 2011 05:55:37 +0000

A word of warning for Reuters readers.

These bank payment services which are outside of the normal CC system are dangerous.

I was recently royally screwed over by Chase while trying to use their “QuickPay” service.

The banks can and will freeze your account at a whim and require ridiculous actions to regain access to your own money.

Search for “Chase Quickpay Consumerist” to read my story.

By: spectre855

spectre855 — Thu, 26 May 2011 15:41:39 +0000

@guanix: I’m not disagreeing with you. I’m sure there are other cost elimination factors as well considering the rest of the world seems to have been providing free transfers for a long time.

My point is that this particular system has the added “cost” of forcing its users to pony up social networking type information instead of, for example, an anonymous routing number for the receiving party. I think that this aspect of the system should not be understated. I have a feeling that more than a few privacy hawks are going to voice concern over this type of setup.

By: guanix

guanix — Thu, 26 May 2011 15:15:48 +0000

spectre855: It’s certainly plausible that the fee is paid in the opportunity cost associated with processing a check.

Back in Denmark, domestic wire transfers become very cheap and eventually free for almost everyone (if ordered online) around 5 to 10 years ago. Checking accounts have almost always paid interest, so the fee was two days of forgone interest on the money: the transferred amount stopped paying interest on day 0, appears in recipient’s account on day 1, and only starts accruing interest again on day 2.

By: autocorrelation

autocorrelation — Thu, 26 May 2011 14:33:47 +0000

This sounds a lot like Interac email transfer here in Canada – you just enter the person’s email, the amount, and a security question, and the money is transferred effectively instantaneously. Most bank plans include a number of them for free each month, with the cost being fairly low otherwise.

By: spectre855

spectre855 — Thu, 26 May 2011 14:03:48 +0000

I’m sure that the “fee” for these transactions is paid in customer data. Obviously the banks aren’t providing this service out of noble intention or public goodwill. You do have to provide the bank with an email address or phone number for the receiving party which essentially creates a de facto social network. And Lord knows that social network data is more valuable than gold these days.

I’m not saying that this is necessarily a bad thing. I just think that no one should be under the illusion that this is a genuinely free innovation. You’re paying the bank every time you provide them with the contact information for a potential new customer (not to mention that person’s financial relationship to you).

By: Developer

Developer — Thu, 26 May 2011 13:52:48 +0000

Also worth mentioning: SEPA will replace all other national payment systems in EU this year.

That means the process will be the same (& simple) for paying 1€ to your friend or buying something from a company in another EU country.

http://en.wikipedia.org/wiki/Single_Euro _Payments_Area

By: Moopheus

Moopheus — Thu, 26 May 2011 13:19:33 +0000

I presume that two of the other reasons are the size of the transactions (many are probably small), cash transactions can be difficult to track (anonymity is good), and at least some transactions are in person, so no intermediation is needed. Okay, that’s three.

While I am normally of the opinion that banks don’t offer these kinds of services unless it is more for their benefit than ours, if it forces operators like Paypal to lower their fees, that’s okay.

By: guanix

guanix — Wed, 25 May 2011 22:45:07 +0000

As a Bank of America customer, it is easy for me to transfer money to any bank account in the country without involving clearXchange. All I have to do is go to my local branch, fill out a form with the recipient’s ABA and account numbers, and pay small fee of only $25.

By: seanmatthews

seanmatthews — Wed, 25 May 2011 21:21:47 +0000

This sounds or less like the payment system in Germany. Which is more or less unqualifiedly great. I haven’t written a cheque in at least 15 years, and most payments I can transact without a CC, account to account, without costs, using a one-time pad.