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Comment by eddie_the_head | Hacker News Reader

I am curious what the alternative but far more popular payment variants in Germany to credit cards are.

Direct debit and instant wire transfer are very big in Germany. Many places, especially supermarkets, do not even accept any credit cards but only debit cards. Our checking accounts have evolved very differently to the US - nobody has been using cheques here for years, even before the internet is was all debit and wires.

Are the wiring rates low, relative to other countries around Germany or otherwise? How are wire rates for wiring money from say the UK? Who are the primary wire transfer companies in use in Germany?

Thank you for your time.

For individuals, wires are free. Businesses pay a few cents per wire. However, wires need about 2 days to process.

That's the rates _from_ Germany to any EU country. So I wouldn't pay for a wire to France, but I don't know what a French person would pay to wire to me. The regulations only say that EU wires need to have the same price as national wires.

However, wires need about 2 days to process

This is how you pay: the bank earn the interest rate for those two days.

That's less than 0.1 percent. I guess most people would accept higher tranfer fees to speed up the process :)

Not really, very few bills must be payed immediately, so most transfers are specified to be made at some later date.

Besides, transfers within my country (Denmark) to other banks arrives next day. If you pay for the transfer, you can get the money transferred immediately. So next day = free, same day = pay.

For free transfers I don't get interest rate for the day when the money leave my account. The recipient don't get interest rate for the day he receives the money. So even if the transfer only takes a few hours (If I pay just after midnight, he'll have the money at 6am), the bank earns interest rate for 2 days.

Banks transfer huge amount of money so the interest rate adds up for them.

Money transfers within the EU have to cost the same as transfers within the countries themselves, by law (for transactions smaller than 50k Euro). And we're talking mostly direct bank transfers here, not something like Western Union.

In Germany, your ATM card is basically always a direct debit card that gets accepted anywhere (causes the shops lower fees than credit cards), so that takes care of one part of the Visa/MasterCard angle, and for online transactions direct debit rules the game, taking care of the other half. Services like paypal use direct debit a lot in the background.

(So the only "missing" part is credit card debt, usually you can't accrue that much debt on your direct debit account)

As a minor correction, the EU law on fees only applies to Euro-denominated accounts. I was somewhat unpleasantly surprised that I was charged significantly higher fees when I transferred some money from a EUR account in a Eurozone country to a DKK account in Denmark, since that case doesn't fall within the regulation.

Within the Eurozone, however, it's quite nice.

Yes, under 50k Euro and in Euro, should've said that a bit more clearer.

Those foreign currency fees can be a bit tricky, even for credit cards. I've got two MasterCards, one of them adds a 1% fee if it isn't in Euro, the other doesn't (well, I got it exactly for that reason).

Wire transfers inside the EU cannot – by law – cost more than wire transfers inside an EU country (at least if you are transferring Euros).

In the case of my (free and completely standard) account that’s exactly zero Euro for every wire transfer. (You cannot transfer more than €50,000 and, as I already said, only Euro.)

Wire transfers are a very common way to pay for stuff in Germany and it’s very easy to get accounts that have free wire transfers. I would even speculate that most banks offer free wire transfers (I would at least be surprised if a bank told me that I have to pay for wire transfers) but I can’t be sure about that.

You are not using wire transfer companies in Germany, you just tell your bank the amount, name, account number (IBAN if it’s going outside of Germany), bank name and number (SWIFT-BIC if it’s going outside of Germany) and purpose of the wire transfer and you are all set.

And starting this year, due to an EU law, they have to reach the target institute the next business day, so it's quite convenient and cost-effective.

Yet i'm still tryin to understand why an international bank wire transfer without currency exchange (EUR -> EUR) and within UE (actually from Switzerland to Italy), is taking one week or more to arrive...

Italian banks don't exactly have a stellar reputation, maybe paying the fines is cheaper than upgrading the software?

I dont think it's a software problem (wire transfer between italian accounts are sent in one day thanks to the cited european law), somebody told me they're cheatin on this so they can have liquidity that they can borrow to customers. Having said that, many financial services are cheaper in italy than in Switzerland or UK if you dont include taxes.

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