US Banking in 2013

I have eight bank accounts across three countries. They’re a mixture of personal and business accounts. So I know a bit about banking.

And after the last few months worth of experiences with US banks, I can tell you that banking in the US sucks. A lot. There’s really nothing more to say on that matter, nor will this change any time soon.

Imagine a quick transfer from my account to your account. In the UK all I need is your account number and sort code, quickly login to my online banking, and within minutes you’ve got my money – for free, even between banks. That’s the kind of standard that – in 2013 – we’ve come to expect.

Besides, why would it need to be any more complicated than this, in a world that runs on computers? It’s not like some lackie would have to carry that cash (which doesn’t even exist) from one building to another.

In the US that’s very different. The most reliable kind of payment from one person to another is a cheque (or “check” as they’d like to call it). That’s the fastest, the safest and most convenient thing there is. Me getting a pen out, writing something on a piece of paper, putting it in an envelope, sticking a stamp on it, and praying to god that the mail man doesn’t lose it. How’s that for efficiency?

Money will change hands 3-5 days after you’ve initiated it, if you’re lucky that is. You’re never in control of the entire process, and you can never really guarantee that your landlord gets the check. Welcome to 21st Century America.

Online Banking

“Surely”, I hear you say, “there MUST be some kind of electronic transfer system in the US”. And of course you’re right. They’re called wire transfers, and they can be initiated electronically from my account to yours. They’re much more convenient, and I can set them up via online banking.

Trouble is, a wire transfer costs the sender $30, and the receiver another $16. This is not a joke by the way.

That sort of price tag puts a slight damper on everyday use. I find it funny that both parties get penalised for something that clearly makes the banks’ life a lot easier.

There is an alternative to wire transfers which is called Bill Pay. It’s designed so that you can pay your bills from your bank’s online portal without having to sit down and write 10 checks every month. It works well when the receiving end is a large conglomerate, but Bill Pay doesn’t mind if the receiver is a human being with another bank.

All you need to use Bill Pay is the receivers name, routing number and account number – then you set up a handy transfer, make it recurring if you like and you’re all set. Just like the UK’s equivalent of a standing order it would appear. And it’s free – a word you don’t often hear associated with US banking.

Minor Pitfalls

What’s happening behind the scenes of Bill Pay however is something only the best comedy writers could come up with.

I’ve used it to pay rent to my landlady. She – like me – despises checks, whichever way you want to spell them. Enthusiastically I setup automatic payments that should leave my account on time and hit hers electronically – no charges involved.

Turns out that they take the money from my account on the day of the transfer, then wait a week or two, then somebody physically prints a check, puts it in an envelope and sends it to her in the mail.

You got to read that sentence a couple of times to understand how seriously sick this idea is.

Now Bill Pay may work differently with different banks. I’m with HSBC, the worlds local bank – so local in fact that last time I tried to deposit a UK cheque (from HSBC UK) into my HSBC US account, they told me that I’d have to buy a plane ticket and deposit it over there in person. That’s how local they are.

When I tried Bill Pay with my American Express credit card, the money changed hands within minutes – so perhaps they do distinguish between companies and humans.

Say it isn’t so

I thought, perhaps it’s just HSBC – the world’s local bank. I didn’t want to give up.

So I tried to use Bill Pay for my rent from another bank – my business bank, the Great Bank of Florida. But they did the same thing, ie send a check in the mail after two weeks. All that’s left is a bitter taste in my mouth (and my landlady’s) and it looks like we’ll have to resort to checks after all. Luckily she’s our neighbour so at least we can cut out the mail man.

Next time you think of PayPal ripping you off, keep in mind that in the US they present a cheaper and quicker alternative to what your house bank offers.

The Price for so much convenience

You’d imagine that if they treat customers like criminals, US banks would offer such diabolical services for free. But that would be wrong.

While personal banking is free in the UK, it isn’t in the US. Prices and conditions vary a lot. I pay $3 per month just to have an account with HSBC – the world’s local bank. If I left more than $1500 per month in the account and ever drop below that they even waive that charge. Thinking about it, we HAVE more than $1500 in that account and they still charge us.

Let me just make a note in my book of liars quickly…

I’ve enquired about business banking with HSBC too, and that’s really affordable: you get free banking of you leave $15.000 in the account at all times, otherwise it’s $50 a month. That’s just peanuts really – if you’re making $96 billion per week (sadly we’re not, so we looked elsewhere).

At least their telephone support is nice. Last time I spoke to a gentleman named Rajneej in their world’s local call centre in India, it took us 20 minutes just to establish my identity. Then he could tell me that I can’t pay my HSBC credit card from my HSBC bank account online (because, you know, they’re actually two different companies – obvious, isn’t it?). Thanks, Raj!

I try not to speak to them anymore.

Check is King

My first experience with US checks was when I had to order some. You’re not just given them for free like in the UK. In the US somebody has to go to the printer, hire people, polish the machine, source ink and paper, then print a run just for you – for a small fee of course.

We needed checks to pay our first landlord on 10th street, somebody who was very “old fashioned” as his realtor put it. He insisted on a check being mailed, something we found rather shocking at the time – but of course understand all too well today.

So I went online, clicked the “order checks” button and through that’s probably the end of it. Instead, I get an email a few days later from HSBC, the world’s local bank:

Dear Mr. Velsuislsis,

since this is the first time you’ve ordered checks with us, may I ask how many books you require. Also, could you advise if you’d like the blue checks or another variation.

Since it looked like we needed checks all the time, two books sounded like a great idea. Blue is my favourite colour, and not knowing the alternatives I thought that sounded good too.

Nearly four weeks later, after enquiring at my world’s local bank, we found the surprise was in our mailbox: two huge envelopes full of checks. A “book of checks” in the US actually contains 6 UK-type cheque books, packaged in a handy whip-out folder. And we now had two of those. That’s 600 checks in total.

The second surprise came when they charged me $50 plus postage for the quality printing.

We should be good with checks now until 2097.