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Comment by pjg | Hacker News Reader

Disclaimer: I work for Checkbook.io

The problem we are trying to solve is paper Checks are still being to pay individuals/businesses. ACH doesn't work for paying out because the recipient needs to verify account (a painful process if micro-deposits are being used ) and there is a delay of 3 business days. Credit Cards charge 2.9%+ which doesn't scale for larger transactions.

Having a simple solution that can disburse funds overnight to the recipient with having to send out paper, sign up for some service or pay 2.9% is what we are building

Different than the traditional echecks since it allows instant verification and works with bank accounts that may not be ACH enabled e.g. Money Market Accounts, Small Banks/Credit Unions that may not be ACH enabled

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I don't mean to engage in gratuitous negativity, I really don't, but nothing about this makes sense to me.

Looking at the rest of the thread, this seems like a credible offering from credible people, but the reasons you've given don't align at all with my experience using the banking system.

>ACH doesn't work for paying out because the recipient needs to verify account

CapitalOne, Volkswagen Credit, and my university all gladly pull my money over ACH with just an account/routing number submitted over a web form and no verification process. CapitalOne clears overnight.

The requirement on recipients to verify account ownership, if it exists, is violated in vanilla transactions with vanilla consumers at massive scale every single day by household names. I have a hard time believing the banking industry would institute a requirement and then let everyone flaunt it like that.

>Small Banks/Credit Unions that may not be ACH enabled

Really? Is that a thing? I have seen checking account offerings missing all sorts of things - branches, mobile apps, online banking, bill pay gateways, even check-writing capability - but ACH is the one true constant.

Some institutional payees like CapitalOne and Comcast won't even process a check as a check, they'll take the account/routing number and do it over ACH instead. Lots of employers also won't cut checks - it's either ACH or a shitty debit card loaded with fees.

People using non-ACH-capable banks were left out in the cold by everyone else years ago; I'm surprised there's a business in accommodating them.

Your point about CapitalOne, Volkswagen Credit, and your university sending you money with Routing Number and Account Number is just fine. You have a relationship with them.

Try sending ACH to your landlord or your Gardner or DMV. Or that class action settlement Check you received - why didn't they just ACH it to you ? In the former case - entities don't want to give out financial info to people they don't know. Even if they do how do you plan to initiate an ACH to your Landlord ? In the latter i.e. a business or an individual trying to pay you must go through an extensive process to collect your bank account info, that's assuming you are willing to part with it.Donald Knuth doesn't write Checks for this reason: http://www-cs-faculty.stanford.edu/~uno/news08.html

About ACH not being ubiquitous. Try ACH'ing from/to your Money Market account. There are over 100 million of them in the US. It won't work. Small Banks and Credit Unions - yes appx 12% of Credit Unions are not ACH enabled (stats are behind the NCUA firewall ). Just because large banks in large metros use ACH ubiquitously does not imply universality. But regardless that's just one point for one demographic. The big picture is getting payments without sharing bank info.

About your point about CapitalOne and Comcast not processing a Check as Check - that has been around for decades. Truncating a paper Check to ACH transaction to get rid of paper. We are going one step further. Not generating paper Check to begin with. If there is no paper Check there is no need to convert (i.e. truncate in bankers parlance) to ACH i.e. saves another step in the process and makes it more efficient

This is not about non-ACH banks, its about getting rid of 3 day ACH delay and building an experience where anyone can send a payment to anyone else without signing up, without going thru the cumbersome bank UI/UX, without sharing their bank account info and have it delivered in their mailbox. Free for individuals (up to 25 Checks) and businesses pay $1/Check.

>without sharing their bank account info

You should probably lead with this, because it wasn't clear until you stated it there. The parent comment made it sound like the problem you're solving is inability to just use people's self-reported account numbers in ACH without a verification process. This seemed strange, because companies do that already.

Doing something like ACH, but without leaking either party's account number to the other, is more interesting.

Regarding landlords, the property management company that owns most of my neighborhood asks for checking account/routing numbers from a web portal, just like CapitalOne and VW. The DMV dictates the forms of payment it will accept; it's not up to the customer to pick a payment service. They need a check or credit card in hand at the counter. I dunno about gardeners. If it were informal enough, I'd probably use Venmo. I'm not sure why asking him to give Checkbook the necessary information to actually remit the payment is any different from asking him to sign up for Venmo. (Maybe it is?)

>its about getting rid of 3 day ACH delay

For the companies I mentioned, the payment is always credited to my bill (and taken from my bank account) the next morning. I only experience the 3-day delay using the "transfer between linked accounts" features at my banks. I've read elsewhere that this delay is introduced by the banks as an anti-fraud mechanism, not an actual technical limitation.

If I pay someone using, say, Venmo, if they immediately hit "cashout" they will have the money in their bank the next day.

Many companies now offer instant verifications without small deposits - you're not the first one or the inventor, sorry!

Completely agree on that. The idea is to use instant verification and provide overnight settlement, which ACH cannot do yet.

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