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Comment by jwr | Hacker News Reader

I could not believe my eyes when I saw that a transfer (it's called a "wire transfer") will cost me $35 on the sending side, and the receiver will pay another $25. Then you need the bizarre routing numbers which banks bizarrely obfuscate for even more bizarre reasons and which are easy to get wrong because there is no checksum. And then it takes days.

No wonder when anything even slightly better appears, people jump on it.

For comparison, a SEPA transfer in the EU costs around 1 EUR, gets done within a single business day, and account numbers have checksums, so you can't easily make a mistake.

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A wire transfer is a little different than an ACH. Some transactions seem to require wire transfer, not sure if that's just momentum or there is some other driving reason for the choice.

https://www.thebalance.com/ach-vs-wire-transfer-3886077

Wires are required at times because they're "good funds" faster - ACH may take up to 6 days to clear in bad cases.

Also, wires can't be reversed (generally). If that's a good or a bad thing is dependent on the transaction and transactors.

ACH never really clears, it just hasn't returned yet.

Big banks will have the money next business day at the latest, Tiny correspondent banks in alaska might be as far behind as an extra day or two.

There's a class of return that's supposed to come within 3 days, (NSF/No Account/Closed Account) that's usually what the banks are waiting for, but fraud related returns can be up to 60 calendars later by the rules.

Ah, perfect - I had forgotten that banks had up to 60 days! Just nuts.

Yeah, but a CC chargeback has a similar time frame.

Wires don't cost the banks that much. I believe the actual cost is under one dollar, which is what I've seen some brokerages charge for outgoing wires. The reason banks charge so much for outgoing and incoming wires is because customers pay it.

> when I saw that a transfer (it's called a "wire transfer") will cost me $35 on the sending side, and the receiver will pay another $25.

Wire transfers are different than ACH transfers. Wire transfers cost money and take less than one business day. ACH transfers are inexpensive* and generally take in the ballpark of five business days.

* They are inexpensive for the bank. At banks that treat their customers fairly, they're generally free because the cost accounting is generally more than the cost of performing the transfer. At shitty banks, (BofA, Wells Fargo, etc) they're arbitrarily expensive.

ACH, once initiated, usually happens overnight in my experience (which matches up with my understanding that they are largely settled internally by a big overnight batch job). Is this incorrect?

> For comparison, a SEPA transfer in the EU costs around 1 EUR

That's ... expensive? In .de it's usually free for consumers with online banks, around 10 ct for business accounts ...

Even if they are cross-border? In Poland the in-country ones are free/cheap, and anywhere else in the EU is around 1 EUR.

Yes, actually it's illegal to differentiate the price based on destination country, a SEPA transfer is a SEPA transfer. But as .de uses the euro as its currency, all in-country transfers are SEPA transfer, which I suppose isn't the case for Złoty transfers within Poland, thus allowing for differentiated prices?

They obfuscate the routing and account numbers because once you have them, there's little that prevents someone from debiting money from that account.

Really? Isn't that considered to be a problem?

In the EU, I put my bank account numbers on every invoice, which makes sense, because I want people to transfer money to me. I would never imagine that knowing my account number would allow someone to take money from me.

Yup, it's a problem. Checks are way more frequently used in the US than they are in Europe, and all you need to create a forged check in the US is someone's name, address, routing, and account numbers. (Theoretically they're supposed to check signatures too, but who knows if they actually do on a regular basis.)

Combine that with bank apps that allow you to take a photo of a check to deposit it and, well, game over.

There are also lots of places that will let you pay bills by giving them just the routing number and account number, which are all that are needed to initiate an ACH debit.

The US is way behind the rest of the first world when it comes to payment tech.

A common argument in favor of bitcoin and other crypto tokens is the large cost reduction of sending money, commonly paired with the US figures you mentioned.

I find it fascinating that the much saner situations in the EU are never mentioned. Perhaps I need a more diverse source of news on this topic.

International transfers are where crypto or other modern payment systems can shine - currently, low cost startups still charge ~2-3% plus onboarding fees to send funds (in comparison to banks 7-22%), and they have volume limits.

Transferwise is much cheaper than that, under half a percent for larger currencies and no onboarding fees.

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