Comments on: Why checks won’t be abolished A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 By: ABT Wed, 27 Jun 2012 13:57:38 +0000 Janet-1 -> If I have workmen in either I get cash out on my way home from work or I do an electronic payment. The cleaner I use gave me account details when I first started using them and I just transfer the money in each fortnight.

They generally get the money instantaneously so it is easy for them to check; I’ve been phoned by my brother who was in a garage with no money asking for me to transfer him cash. He has then walked in to the store and paid by debit card as it has already been received.

KenG_CA -> I live in the UK

By: FifthDecade Tue, 26 Jun 2012 19:40:17 +0000 I understand the point of view of the delay in the cheque system benefitting the banks (but does it really?). So does electronic banking – the banks save on the costs of inputting the data into the system since you do their work for them. In Switzerland some banks even charge you for using it (less than you get charged for other means but you have to remember ‘free banking’ is a myth).

The banks in the UK only recently became more interested in the electronic transfers system under government pressure. Naturally we’re talking about the last government here, not the current one – the banks dragged their heels as usual.

I also understand the strength of the ‘leave things as they are’ argument for bank customers, we always like what we know. I thought that way too to begin with, but once you realise there are many benefits and it is safe and not that hard to do those fears soon fade away.

THe US eventually caught up with the rest of the world in mobile telecoms, now it needs to fix ebanking: the cheque system that was originally designed in the 19th Century really is past it.

By: dorfl68 Tue, 26 Jun 2012 15:32:11 +0000 U.S. Electronic pay is nor equal electronic pay. It’s telling somebody to write a check on your account which then goes into the system.

Again, in Germany, you just transfer to another account. Electronically. No equivalent of check involved at all. It’s free. You pay the rent and other repeating payments with a preauthorization, which you can withdraw at any time. If you say “that wasn’t authorized’, the party who pulled the money has to show you that they have the written authorization to do so.

You pay petty amounts in cash. You get bills from other workers that you pay via, you guessed it, electronic transfer. 99% of stores take debit cards, credit cards less so

By: nlj Tue, 26 Jun 2012 15:16:19 +0000 Your suggestion doesn’t take into account the 10-15% of Americans who are below the poverty line and can’t afford smartphones or banking transfer fees and probably never will. There needs to be a range of options for everyone, so checks will remain. The reason checks are abolished in some parts of Europe is because European countries take better care of their citizens.

By: TFF Tue, 26 Jun 2012 13:11:59 +0000 Exactly, KenG.

Our payment stream:
Cash — typically under $5, e.g. coffee shop or milk
Checks — small businesses/organizations, e.g. gardener
PayPal — mid-sized businesses, esp. online
Credit cards — daily shopping
ACH — recurring payments, e.g. utilities

Note that the third and fourth carry substantial transaction fees, supported by the merchants. For a larger business, or ones operating online, this is worth the cost. Smaller businesses (like my own, collecting a dozen payments a week) do just fine with checks.

By: KenG_CA Tue, 26 Jun 2012 00:44:39 +0000 FifthDecade, in the US (I think you live in Europe), we can’t easily transfer cash to other people. Wire transfers typically cost $25on both ends and require a fax, and ACH (I believe) requires that you give access to your account to the payee, and is not appropriate for individual-to-individual transfers. I use the bank’s on-line bill-pay, but that would still generate a paper check for payees that aren’t on their system.

I don’t know that consumers in the U.S. are against electronic transfers, but the banks are, as it would cut into their profits. With instant transfers, they would lose all of those overdraft fees, which have replaced loans as a source of revenue.

By: dWj Tue, 26 Jun 2012 00:31:46 +0000 In re USPS, I attempt to have packages delivered by any other means, or to any other address, after having many, many packages sent by USPS simply never make it to my address. No notification, no package. One shipment, by media mail, from my parents, was returned to them a month later with a demand for return postage; as I say, I never heard from them, and even, expecting the package, asked after it at the post office, and was told I needed a package delivery slip that didn’t exist. Find a different example for me of something that works “amazingly well”.

By: FifthDecade Tue, 26 Jun 2012 00:19:44 +0000 Those against electronic payments on the basis that their third party cheque issuer made a mistake or their landlord sold a house have to realise they are not using real electronic banking; they are delegating check writing to someone else. When I make an electronic payment, it appears electronically on the account of the payee the next working day.

Example: Person A sends me a cheque by post on Friday. It arrives on Saturday so I have to wait until the bank opens on Monday. I then pay it in and it takes until Thursday to reach my account. That’s almost the whole week gone by. Person B however sends me the money electronically. It gets to my account on Monday, 3 days faster. No desperate waiting.

As for cash, I still use that but a gardener here would send me an invoice for payment in 30 days. There are a few businesses that insist on cash only, but that’s a warning sign of something being wrong – either their bank has them on a short leash due to credit problems, or they have some work permit problems, or they aren’t declaring the income to the taxman. If it’s the latter I don’t support it – that sort of attitude leads to crises like they have in Greece.

@Ken Who mentioned cost? Not me. I’m all for convenience.

By: SaulTann Mon, 25 Jun 2012 22:30:16 +0000 First Class US Mail has an element of legal protection that no other transmission medium does. I think one of the reasons folks trust it is that they, at some level, have internalized that.

(Postal Service folks are really intense about this. I was at presentation of postal service innovation at the MIT Media Lab (!) and when questions were raised, their response was: Remember Butch Cassidy and the Sundance Kid? Remember the scene where Paul Newman asks: Who are those guys? Well, they said, those guys were Postal Inspectors, and we still take that job just as seriously.)

By: f.fursty Mon, 25 Jun 2012 22:15:47 +0000 Felix — for someone who often highlights the class dimension underlying our current economic woes (e.g., your recent review of Krugman), this post is quite myopic.

Most of us know when we get checks because we are expecting them eagerly and do not lose them. If they get lost in the mail we call and have them re-issued (easy, that; never tried it with a “lost” electronic payment). But that is a very rare thing, since for most of us the mail works very well. (Indeed, the post office is one of the few remaining genuine public services in the United States, currently under vicious assault, and works amazingly well — nothing to be sneered at.) Many people do not have smartphones. Many people do not feel comfortable with the internet. Many people like to write checks to pay their bills and to give presents.

I get that the profile I’m outlining does not apply to tech-savvy and finance-savvy young(ish) people with enough financial means that they do not live check to check and indeed get unexpected honoraria here and there. But just because you don’t like checks hardly means they are not very important to many other people!