One thing about checks that perhaps doesn't get touched on a lot...plenty of businesses use them as part of their accounts payable process wherein they are invoiced on some type of payment terms (whether it's due on receipt or commonly within 30/60/90 days). An unintended but extremely (ab)used feature here is being able to pad out the actual time between receipt of invoice and when the money actually leaves your bank account because 'check is in the mail, should be there in a few days' is an acceptable answer when accounts receivable on the other end inquires about your overdue payment, effectively turning net 30 into net 40. Now, same could in theory be said for ACH since it takes up to a few days to settle depending on the hops between banks, but setting up each vendor's ACH details in a system that may or may not be set up to even do so is overhead compared to cutting checks. All in, the massive inefficiency leads to a vicious cycle of everyone in the chain getting paid late and then doing the same forward. Which sucks.
And whenever a company - even overseas ones - request a check/cheque to "verify ownership" of a checking or current account.
I'm like -- what century do you live in? Since when a) is that an appropriate way to verify an account, and b) does anyone even use cheques anymore?! Most banks don't even issue them anymore and most people don't have them.
Here in The Netherlands, instant electronic payments with your debit card (pinnen) has been widely available since 1990. People sometimes used cheques before that, but even then it was rare. Most large payments happened by "Acceptgiro". It's a form that the sender would mail to the bank to authorize a payment to another bank account. Not sure if there's a proper English name for it.
Please note that "pin" transactions are not settled instantly. It's just that when you pay via pin, the vendor of the machine (most likely CCV or similar) guarantees the shop they get the money.
The actual money transfers (the €5 you paid at some shop from your account to the pin terminal vendor, and the hourly or daily total for that shop from the vendor to the shop's internal account) take place hours after the fact.
So for all parties involved it seems instant, but technology wise it's still more or less batched, but seems instant based on trust.
Of course in The Netherlands, we have SEPA Instant Payments now (based on but not entirely the same as the European IP scheme). These are actually instant; when you pay, account balances of you and the creditor (at the other bank) are updated within 5 seconds.
You are right. I meant "instant" as in, I can pay and the merchant has immediate feedback that the transaction is approved. As opposed to things like bank transfers which take one or more business days to be confirmed.
When I bought my apartment I was at the notary, with the previous owners, a bank representantive and me. The bank person gave me a paper payment for which she had filled already and I had to sign it.
Here in Estonia, or northern europe.. or even eastern europe, nobody uses cheques, nobody has ever seen one I guess.
I haven't bought a car yet, but I guess I would just get the payment details for the car and go to a bank office, give them the seller's bank account information and tell them to transfer the money.
Big purchases won't be helped by instant transactions or mobile banking because there are daily limits on your account, for your protection, so that when someone somehow manages to get into your account (though it should be impossible.. they would need to get my mobile phone, and get my 2 pin numbers that I have memorised. Maybe when someone is forced to go to their internet bank by threat of violence? and transfer money then), then they couldn't take all the money in the account in one day.
Similar experience for me in The Netherlands while buying the house. Except that the banker wasn’t present, they had wired money to the notary’s escrow account ahead of the purchase meeting.
The bank didn’t even issue me a check book when I opened my account. Tells you something about the use of check payment here.
Interestingly, it’s been two years since I used cash. I even stopped carrying it in my wallet. And close to an year since I last used my debit card. Apple Pay is incredibly convenient.
In Germany, we use the same transfer orders (“Überweisung”) that we use for smaller payments for things up to about 50k EUR. These used to be paper forms printed by your bank, but I’ve been exclusively used them online the 15 years I’ve had a German bank account.
When we bought our cars, we just upped the daily transfer limit. I’m not sure how my husband transferred the down payment for our house, though — it was all in his savings account, and was above that 50k EUR maximum daily transfer limit. The proceeds of the mortgage we took for the rest was transferred by the bank to the seller once the bank was satisfied with the purchase contract and that the Grundbuch (city property registry) was clear.
I don't use them very often but they still serve a purpose. You don't have to know the payment details for the receiving party, just their name. You don't need an electronic device or an internet connection.
Of course you have to be more mindful about fraud when accepting one but in many scenarios they prove quite useful.
As the physical buildings are closed for Covid-19, the US Consulates in Germany are renewing passports by mail, with cheque as the only accepted payment method.
