Selling gear and wire transfers in the US, why is this so difficult?

[woodchips]

BIC and IBAN are the terms you need, they use SWIFT to transfer money just about anywhere.

These are basically your country, sort code and account number, which just happens to be printed on every cheque so freely available information.

Wells Fargo will send outside the USA, just received one.

I got charged £10 to transfer Euros to Switzerland. More than the paypal charge but at least the bank is SECURE! Paypal is not a bank and do not follow the banking rules.

[tszaboo]

where I live in the usa, we are just starting to get chip cards, and I only got one a month or 2 ago, most places either have thier chip reader blocked, or dont have one yet, and where I work, the gas station pumps dont have readers, I have one in the booth, but it dont work. and we still get quite a few older folks paying by check.

Chip cards are already being superseded by RFID contactless payments. In some EU countries, they make more contactless payment than with a chip, and "swipe" is just not accepted anymore. You are very very late to the party, with an already obsolete technology.

[Towger]

BIC and IBAN are the terms you need, they use SWIFT to transfer money just about anywhere.
These are basically your country, sort code and account number, which just happens to be printed on every cheque so freely available information.

Not when it comes to America,  It is full of little Mom and Pop type banks which are not part of the SWIFT system so don't have BICs.  You don't see this because large companies use large banks.  It is a pain in the arse.  Payments have to be routed through a larger bank etc.   Their whole banking system is disjointed, I believe their are even problems getting 'checks' from some of these small banks accepted in another county or state. 

Come to think about it, trying to use Northern Ireland or Scottish bank notes in London sometimes does not go well 

[tooki]

Over the last few days I've tried to both sell and buy gear to/from people in the USA. Most of the time it is a really smooth experience but there are those times when the conversation goes stone cold the moment I mention wire transfer. It doesn't seem to make a difference whether I want to buy something or am the one selling.

I understand that people are afraid of being scammed but when I am the one asking for bank info so that I may wire the money, I don't understand what is the problem. I mean what is it I can do with your bank info except send money your way...? Wire or bank transfers are very normal in Germany and Finland, and I can only assume it's the same in other EU countries.

It gets even more complicated when the other party is a company (merchant) and refuses to accept paypal. I thought that most sellers are used to receive money one way or another, be it by using their internet merchant account (payment gateway account) so that people can pay with credit card or simply a wire transfer.

On top of that, using ebay as an example, there are very strict rules and policies that need to be followed when you sell stuff on ebay. If you are accepting paypal, you are not allowed to limit payment methods you accept e.g. accept paypal but not accept paypal payments funded from a credit card. Or say you only accept paypal for payments of less than 1000$. Further, it's generally forbidden to exchange contact details (email, phone number etc) in ebay messages regardless of whether you are communicating with a buyer/seller of an item you purchased. Yo must use the payment process that ebay is providing.

In one case the seller wanted me to call him on the phone to tell him my credit card number, so that he could accept the payment. Yet at the same time he refuses to give me his bank info for a wire transfer "on a public website like ebay". I mean hello, moaning about putting his bank info into the ebay system but asking me for my CC number over the phone?

There must be something really fundamentally different 'over there' than it is in the EU or am I just unlucky and ran into some more than average cautious people?

(EDIT) PS: I understand when you don't want to use paypal, I don't like it either and as seller it is basically not really doing you any good. For sales to the US I pay 3.4%+1%+0.35 EUR (plus paypal's USD->EUR conversion is another 2.5% above the normal wholesale price) fees on payments done via paypal. That's a lot of money especially since I really like haggling and the paypal fee reduces the amount I can reduce the price for a buyer.

In the United States, wire transfers are a very specific thing, rarely used, usually associated with high costs to both send and receive. (Yes, you read that correctly, a fee to receive a wire transfer.) So most people have never used them, and are extremely skeptical of them. It’s nothing at all like wire transfers in Europe.*

PayPal is a really good solution for transactions with strangers, insofar as the funds are held in escrow.

For international transfers without absurd fees, I’ve started using TransferWise. It’s sort of like an online Western Union, but it’s lower fees than anything else I’ve found.


* In recent years, US banks have added the ability to do an “electronic check”, which in the end functions much like a wire transfer in Europe. But it does indeed go through the check clearance network, not the “wire” network.

[tooki]

eCheck, IMHO, can only be initiated by a merchant, it's used to transfer tuition, PP funding, credit card balance, wage deposit, etc. But IMHO you can't write an eCheck to another person. The only way to do this in US is either a real wire transfer (via SWIFT code and account number), or to write and mail a physical check. Some banks offer a free check writing service, you can let your bank to write an one-off or periodic check to a recipient. It's called BillPay by Wells Fargo, it takes maximum 7 days for the check to be mailed to the recipient.

Your opinion is incorrect. My US credit union (SECU of Maryland) allows electronic checks from individuals to individuals. I just used that a few weeks ago.

[james_s]

I know nothing about doing wire transfers as I've never tried, but it is often associated with scams so the mere mention of "wire transfer" will make many Americans think of the various scams and swindles that occur. If you wire money to someone in a foreign country and they rip you off, it is virtually impossible to get your money back.

As far as mag strips and online banking being behind the times, yes there are many things we (the US) are behind on and many reasons for it. In some cases the technology was deployed first here and became heavily entrenched before other nations looked at the various problems and then came up with something better. It's easier to do when you can learn from someone else's mistakes and also start at a later time when newer technology is available.

Another issue is that the USA is a very, VERY big place with the population very spread out. There are densely populated areas on the coasts separated by vast swaths of sparsely populated and largely economically depressed areas in the middle. Areas larger than many entire nations in Europe that have very small populations so installing infrastructure to serve these areas is very, very expensive per person and these same areas tend to have rather little money.

Then there is the general resistance to change which some people have, it seems many European cultures tend to be less set in their ways, I don't know whether that's good or bad, it just is.

[Ice-Tea]

Had similar experiences. Especially between companies, a wire transfer is the norm in the EU. And while I understand the reluctance of sending money to a stranger, I can't understand why a company in the US can't accept a payment. No trust required: you get the money you deliver, you don't get the money you don't do anything. It's nuts a company doesn't 'trust' a wire transfer but has no trouble asking you to write down, scan and email (please don't use the word 'fax') your credit card details.

As for costs: I can select an option for who should carry additional costs.

You can  the EU as much as you'd like, but this is one of the things they got right: you can wire money all over the EU without any costs and/or effort.

[james_s]

I think a lot of companies, especially smaller ones are just not set up for doing international sales, many of them existed before the internet at a time when they didn't typically get international customers wanting to do business with them. Also there are multiple layers to the problem, not only is the transfer of money a hassle but international shipping tends to be extremely expensive and there is a lot more paperwork. I'm generally willing to send items overseas but it's not something I like to do, it takes 10 times the effort. I can't simply print the postage online and drop the parcel in a bin, I have to take time out of work and go stand in line at the post office and deal with a human clerk. Around here the post office typically has 5-6 counter spaces with only one or two of them open and the wait can be 40 minutes or more.

[rsjsouza]

I read the other day that US banks are still a bit behind the rest of the world ( like they are for credit cards), cheques/checks are still commonly used ( don't think I've sent or received one for >3 years) and online banking is less common, so it may be that they are simply less used to the idea of doing bank transfers and so regard them with suspicion.

I think called it "a bit" is understatement. Chip credit cards are norm for 10+ years (still got mag strip tho), and I haven't seen cheque... ever. They are not even a form of payment anymore in my country AFAIK

I agree. When I moved from Brazil to here I found out the banking system is still at the stone age.

As others have hinted, one thing that detracts from any sort of transaction via the banking system is that the money can be withdrawn as easily as it landed in your account - the moment you deposit a check, the money lands at your account almost immediately. However, it may take days until the check is fully cleared - if there are no funds the money simply disappears from your account and you are left to chase it.

Wire transfers got a similar bad rap after inescrupulous folks using moneygram or western union would do a similar thing locally.

Now imagine trying to chase this overseas...

I did an international transfer once between my own pockets (Brazil --> US) and was terrifying to see the money disappear from its origin immediately and re-appear only ten days later at my account here!

[Neganur]

Thanks for the replies. I was not ready to accept that wire is so very different but this has helped me understand it better.

The issue comes up mainly when I sell/buy used items that cost let's say 5000 EUR (e.g. a spectrum analyzer).

Inevitably the question of how to pay for the item comes up. You already have haggled back and forth a bit and agree on a price but then the buyer wants to use paypal (which is OK). The problem is that accepting payments via paypal adds additional fees that vary so vastly depending on where in the world you are (I mean, your paypal account), where your buyer is located and whether there is a currency conversion necessary. Then there may be a difference if the transfer is for goods and services or just 'sending money'.

And who is paying the fee? Let's first see how much it is.

Let's say the buyer is in the US and the price did not include shipping. Shipping an heavy item with UPS (as private individual) costs around 340 EUR. Paypal fees will then amount to ca 235 EUR (receiving in Finland: 3.4%+1% for US/Canada) and that is not including the conversion from USD to EUR for the buyer which is even more expensive if done via paypal (2.5%-4% over wholesale). So the US buyer can either add the funds in EUR  from his debit card (his bank does the conversion) or in USD and let paypal do the conversion. I am not sure but if I send a paypal money request then the buyer can do the payment directly with his credit card (so, not from paypal balance) and use the option that allows him to use the card issuer's conversion rates? At least I can do that when I pay. Anyway, I will never see the cost of the conversion since that happens on the buyer side.

So, 235 EUR fees.

I don't want to pay that since I just haggled and maybe also gave a discount on shipping ... the things you do to make a sale happen. And the fee is entirely caused by the choice of payment method by the buyer. But maybe I just have to accept that this is the cost of selling my used gear. Then again, it is not just about the fees or being inconvenient, I think this is about protection.

Paypal offers buyer's protection which doesn't really do anything for the seller by the way (charge-back protection? That's not even handled by paypal if the seller used his credit card, which most do). So in my eyes I am the one paying for the buyer protection. I can ask the buyer so send the money "for friends and family" but that immediately makes me look like a scammer again. Actually why? You can still do the payment with the credit card and get protection that way.

Given a choice between a paying service identical to paypal, same fees and convenience minus the buyer's protection, I think paypal would always be preferred.

Is it OK to ask the buyer to cover the paypal fees? Paypal actually says no, that's against their terms. So you have to call it something else like "handling fee"  Meanwhile online stores are surcharging when you want to pay using a credit card (stipulating additional fees for payments by bank transfer, direct debit or debit/credit card will be prohibited in the EU starting 2018 by the way).

Wire transfer sounded like a very reasonable alternative but I can see that it is connected with a lot of inconvenience outside of EU. Thanks for helping me understand that.


PS, the fees are actually a lot less if the US buyer pays them from their end, but that form of transfer is not covered by the buyer's protection. Maybe I should get a US paypal account, hmmmm!

[HighVoltage]

One US Amerian company paid me once with a US corporate check and I tried to deposit this in to my German bank account. It took like 3 month to be cleared and to have the funds available.

There still seems to be a big difference between the US and Europe banking systems.

But the same is true in Japan.
Try to send or receive some money from Japan.
It works but only, if you are willing to pay the ridicules high fees.

[Ice-Tea]

Yeah. I once got paid by a check from General Electric. Like in the 1900's.

[james_s]

Checks are still pretty much the standard way of being paid by a company. I've done some contract work here and there and have always been paid in the form of a corporate check. Over here things are still set up for that so it works fine, I simply deposit the check into an ATM at my local bank and the money shows up in my account. Primitive yes, but it does work fine. The problems occur when trying to deal with other nations that do things differently.

[MarkS]

We are told from an early age to never give out bank account info. I was unaware that the rest of the world has moved away from checks, but they are still in full use here. With someone's bank info, I could make a fraudulent check(s) in minutes with any graphics program. Bank info is direct access to the account.

[Mr. Scram]

We are told from an early age to never give out bank account info. I was unaware that the rest of the world has moved away from checks, but they are still in full use here. With someone's bank info, I could make a fraudulent check(s) in minutes with any graphics program. Bank info is direct access to the account.

That sounds like patching a vulnerability with a serious flaw. I mean, security through obscurity for bank accounts. Really?

Especially considering you give your details out with every check you write.

[mtdoc]

We are told from an early age to never give out bank account info. I was unaware that the rest of the world has moved away from checks, but they are still in full use here. With someone's bank info, I could make a fraudulent check(s) in minutes with any graphics program. Bank info is direct access to the account.

Bank routing numbers and checking account numbers have never been secret since every check has them printed.  That has always been the case.

As always - writing a fraudulent check is a felony.

Personally, I rarely right checks and haven't for the past 10 years. Online payments have been easy here for years -though many are slow to adopt them.

Direct transfer of money to individuals has been a weak point of online finance in the US compared to many other countries.  I think that is slowly changing since I recently opened an account with a bank that allows that with no fees attached.

[rsjsouza]

We are told from an early age to never give out bank account info. I was unaware that the rest of the world has moved away from checks, but they are still in full use here. With someone's bank info, I could make a fraudulent check(s) in minutes with any graphics program. Bank info is direct access to the account.

That was another contrast I saw when I arrived here - checks in Brazil are usually quite secure and to forge one you would need to first have access to the special paper and then print them with a bazzillion of other marks, verification digits and others.

Personally, I rarely right checks and haven't for the past 10 years. Online payments have been easy here for years -though many are slow to adopt them.

The online payment system here is handled by a vast number of private companies, with the worst offenders being the various medical and exam clinics - that annoys me given you end up leaving your payment info to a whole lot of different places. That was improved after several of them started accepting Paypal.

[TassiloH]

Paypal offers buyer's protection which doesn't really do anything for the seller by the way (charge-back protection? That's not even handled by paypal if the seller used his credit card, which most do). So in my eyes I am the one paying for the buyer protection. I can ask the buyer so send the money "for friends and family" but that immediately makes me look like a scammer again. Actually why? You can still do the payment with the credit card and get protection that way.

The last time I checked this (in Germany), I could not send fund to "friends and family" via Paypal using a credit card (which makes sense, because Paypal would lose money on this because of the credit card fees), it had to be existing balance or to be transfered from my bank account. I'd guess something similar applies in the US, so the credit card protection is also lost.

One US Amerian company paid me once with a US corporate check and I tried to deposit this in to my German bank account. It took like 3 month to be cleared and to have the funds available.

Hehe, during my time in the US I figured out that writing a personal check was the cheapest method to transfer funds from my US to my German checking account. A wire transfer would have cost 30USD for the originating bank, plus some bank on the way would take another 10USD away in the process; on the other hand it would only take a week or two. The personal check was free on the originating side, and the receiving bank charged something around 10 EUR. But after mailing the check to the German bank, it would take about 4 weeks for the money to disappear from the US account, and then ANOTHER 8 weeks to re-appear in the German account. So during the majority of the 3 months is actually some bank in between sitting on the money.

Nowadays I still have the US checking account, which comes in useful while travelling in the US (e.g. if the stupid pump at the gas station insists on the ZIP-code verification despite having inserted an international credit card). The by far cheapest method to transfer money into that account is actually to to wait until I visit the US, then go to a branch of the bank, withdraw the maximum amount of cash possible at the ATM there using my German credit card, and immediately re-deposit that cash into the US account 

[Neganur]

The last time I checked this (in Germany), I could not send fund to "friends and family" via Paypal using a credit card (which makes sense, because Paypal would lose money on this because of the credit card fees), it had to be existing balance or to be transfered from my bank account. I'd guess something similar applies in the US, so the credit card protection is also lost.

You can do that in the US paypal.

That's another thing I noticed - a US paypal account has different features than a German account

[TassiloH]

You can do that in the US paypal.

Oh, indeed. Sorry, my info was outdated, I just verified, the credit card funding is also possible for a German Paypal account. Well, but fee-wise this is getting closer to the regular Paypal payment then.

[HighVoltage]

That's another thing I noticed - a US paypal account has different features than a German account

I still have my original US Paypal account from the time I lived in the US and it comes handy once in a while. But the day probably comes that it needs to be verified again and I do not have a US checking account anymore and then it will probably be restricted.

One US bank account (Savings Account) I still had for several years, was closed by the bank, although it had several hundred USD in it. Reason: No transactions for over one year. And what happened to the money you might ask? Well, they gave it to the state of California and I can not get it back.

I had so many unbelievable bad experiences with US banks that it would be too much to write down. Things that would never happen in Germany. It seems like (May be an illusion) that the European banking system is more protective of the bank account holder and not the bank. At least in Germany.

[SeanB]

Cheques are easy to forge, had one that was washed and reprinted really expertly. Only way to tell this was a wash job was that we still had some cancelled cheques from the series range in the book, and then could do a microscope comparison between them. At first glance they looked identical, but the only thing left on them were the signatures and the MCR ink characters. The rest, including the background itself, having been bleached off the paper itself, then reprinted with an inkjet printer so as to be blank, and with the nearly correct details. Only slip up they had was some slight errors in the inkjet dither pattern, and they also had used the wrong printing company details, otherwise a near perfect copy. Then the forgers had written the value and kept it below the original value, as the cheque itself had been processed by the bank. Apparently sending a cheque through with the same number will still work, the computer assuming the sequence number being the same simply means there is a new book of 10000 being used, and there only being a 4 number cheque number field. We picked it up because our book keeper knew the swquence number and reconciled them daily, and noted this one being presented again. Bank ate the loss, and I had to open the fraud case, still waiting for any reply though 6 years later. I think almost nobody uses a cheque these days, at least as a company i rarely see one, EFT and other means works 99.99% of cases.