General > General Technical Chat

Cheques being phased out in Australia by 2030

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tggzzz:

--- Quote from: nctnico on October 08, 2023, 11:23:34 pm ---
--- Quote from: DimitriP on October 08, 2023, 11:19:33 pm ---
--- Quote ---My limited understanding is that banks charge the same for handling cash from businesses.
--- End quote ---

The problem with this thread is we are dealing with different personalities, from different backgrounds from different countries.

I don't know what fees businesses get chanrged for having a bank account in the use.
But I do know that when I deposit a check for $100 , I do end up with $100 in the account.
When you take a card payment for $100 , you end up with less than $100.

--- End quote ---
This is because the bank is not transparant about what they do with your money. How much time does it take for a check to appear in your bank balance? I bet this is a couple of days to maybe even more than a week. Where is your money during that time? Well, the bank is using it to make a quick buck and cover the expenses for doing the transaction.

Over here banks are no longer playing that game. You typically get charged a monthly fee and a cost for every transaction you make (the latter mostly for business bank accounts). Over here banks charge companies for doing cash deposits. So taking electronic payments is cheaper, faster (nobody needs to go to the bank at the end of the day) and safer.

--- End quote ---

And then there was the famous $95,093.35 cheque...
https://www.scotsman.com/news/opinion/columnists/patrick-combs-heard-the-one-about-the-cashed-junk-mail-cheque-1613914

TimFox:
Current law in the US is a bit complicated, depending on the nature of the check (along with cash and other forms of deposit).
See  https://www.govinfo.gov/content/pkg/CFR-2018-title12-vol3/xml/CFR-2018-title12-vol3-part229.xml  for full text.
For lots of typical checks (with exceptions carefully enumerated in that long text), money must be available in the customer's account not later than the "business day after the banking day" when the check or cash is deposited.

tggzzz:

--- Quote from: ataradov on October 08, 2023, 11:30:07 pm ---In the US banks are obligated to make the deposited check balance to be available within 24 hours. They can settle the processing with the issuing bank.

--- End quote ---

... or not, as with the famous $95,093.35 cheque (q.v.)

SiliconWizard:

--- Quote from: nctnico on October 08, 2023, 11:23:34 pm ---
--- Quote from: DimitriP on October 08, 2023, 11:19:33 pm ---
--- Quote ---My limited understanding is that banks charge the same for handling cash from businesses.
--- End quote ---

The problem with this thread is we are dealing with different personalities, from different backgrounds from different countries.

I don't know what fees businesses get chanrged for having a bank account in the use.
But I do know that when I deposit a check for $100 , I do end up with $100 in the account.
When you take a card payment for $100 , you end up with less than $100.

--- End quote ---
This is because the bank is not transparant about what they do with your money. How much time does it take for a check to appear in your bank balance? I bet this is a couple of days to maybe even more than a week. Where is your money during that time? Well, the bank is using it to make a quick buck and cover the expenses for doing the transaction.

--- End quote ---

While you can argue some "hidden" fees like that on cheques, it is a rather moot point in times where interest rates have been very low. Sure rates are raising back now (which is another story), but it's a relatively recent trend.
There was absolutely zero quuestion that the actual fees on card payments have been much higher than anything you'd potentially lose from the banks delaying cheques for a few days.

Of course the downside of cheques has been that you took the risk of them bouncing. Even though (at least in some countries), there had been services for a long time where as a professional you could consult whether a given cheque would be honored, past a certain amount. Of course that wasn't a 100% guarantee as the money could have disappeeared from the bank account in the meantime, but that prevented the obvious "scams" from people paying with cheques that would be certain of bouncing.

nctnico:

--- Quote from: TimFox on October 08, 2023, 11:37:45 pm ---Current law in the US is a bit complicated, depending on the nature of the check (along with cash and other forms of deposit).
See  https://www.govinfo.gov/content/pkg/CFR-2018-title12-vol3/xml/CFR-2018-title12-vol3-part229.xml  for full text.
For lots of typical checks (with exceptions carefully enumerated in that long text), money must be available in the customer's account not later than the "business day after the banking day" when the check or cash is deposited.

--- End quote ---
So basically the banks can do what they like with the money for 24 hours. Imagine how much extra interest free money that is on a balance sheet of a bank with a couple of million customers. There ain't not such thing as a free lunch.

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