Banking infrastructure is pretty terrible by default. Almost everywhere. It‘s 2021, instantaneous transactions should be the default. If you send a SEPA payment in Europe (most modern standard) it still takes one business day. And intercontinental transactions take even longer.
I get the whole interbank exchange weirdness, but still. Banks basically transfer money akin to using analogue switchboards.
Are you saying that the USA is still far behind the EU banking system? That's news to me - I've always assumed that banking, of all things, would be far superior in the US. I've always imagined that the experience in the US, at least compared to German banks, would be one of slick apps and super-friendly paperwork because 1) banks want your money 2) something something capitalism.
When I want to do a domestic transfer in Germany, if the recipient's bank does not accept SEPA Instant Pay (looking at you, Baader Bank), then it takes around 2-3 _days_ for my funds to get to the other person. That's insane. In India, our slow transfer (It's called NEFT. UPI is the new shiny instant transfer system) takes at most a day and even before UPI no-one was using NEFT because there were faster alternatives. I've always thought that the slow fund transfers were a German thing and that the US would be better. Guess the grass is not greener on the other side.
If that's not supported somehow classic SEPA transfers work everywhere, and arrive in 1 business day max. 1 day isn't something you can use in a shop of course, but if you need to pay back a friend it's pretty acceptable imo.
> unacceptable (different banks)
Not accepting IBANs or SEPA payments from other banks or from banks in other EU countries is illegal, and comes with substantial fines.
It still happens in places of course, especially in slow moving large orgs, but if you still find organizations doing this nowadays then you can report them as breaching EU payment regulations (https://eba.europa.eu/consumer-corner/how-to-complain) and that should set a fire under things pretty quickly.
Because banking in some couuntries actually does work like that.
In Europe, since November 2017 banks are moving towards the SEPA Instant Credit Transfer system, which allows transfers in under 10 seconds, between all banks.
So if you’re today using a European bank, your transfers might actually work like this.
You really need to change banks if this happens to you. Bank transfers are done in seconds in the SEPA area. Pretty sure there's something similar outside of Europe, too.
Australia is fairly similar to this. Particularly the fee free transfers between banks (for both private and business)
What’s interesting is that next year most of the banks seem to be launching an instant bank transfer system - big interbank implementation. Right now it takes generally 1 business day if you’ve transacted with that account before and 3 business days if you haven’t. I assume that’s some kind of anti fraud but not 100% sure.
International bank transfers as well. Most of the time they are uber slow, depending on the country could take multiple days. Until banks start to seriously address this problem even Bitcoin would beat them effortlessly.
In Europe, we can transfer money between any two bank accounts on any European country, and the transfer must complete in less than 90 seconds (from an account in bank A, in Spain to another account in bank B, in Italy, for example). And frequently those transfers are also free.
It's not a banking industry problem. It's an obsolete American banking industry problem.
Banks are bad because they charge to much, but they aren't that bad. What kind of unbelievably shitty bank doesn't provide 24-7 money transfers through a convenient phone app? Those transfers always take 0 time within the bank and have legally forced waiting periods between banks and between regions. The time may be legally required to be higher for certain scales of transactions, but they are generally as fast as they can be. Btw if your bank does not provide these services, just switch to one that does.
SEPA payments with my bank here in Germany typically take 3 business days, not 10 seconds. Reading about it, it seems that my bank doesn't support SEPA Instant Credit Transfer!? I'm not sure if any bank here in Germany does (never looked, though).
No one here can pay for their pizza delivery through SEPA. Intermediaries like PayPal are still needed. I'm baffled that banks can't get their shit together to offer an instant payment solution that works over the internet (ie. no card reader) for small purchases.
Europe has SEPA which is still not instant but a lot better than it used to be. Now the money appears in your account (for banks that support it) immediately and the official transaction date is the next working day. So the speed is technically 1 business day, which is a lot better than it used to be, and 0 business days for a lot of practical purposes.
Why can’t they just copy what the SEPA (Single Euro Payments Area) is doing? We went from ‘1-2 day settlement, and God forbid you need to send money cross-border’ to ‘most transactions settle within 10 seconds’ in the span of 20 years.
Yah but banking sucks as an eventual consistency problem. Sure there are processes to go back and solve conflicts, but they suck too.
Part of the reason we can't transfer money instantly between two accounts in the USA is due to sorting out eventual consistency. Federal guidelines on transfer intentionally make it a slow process so the manual processes can catch up.
> A normal wire transfer takes days even in europe.
That is somewhat true. Usually, a regular bank transfer does not take longer than 1-3 working days, mostly dependent on the institutions involved. Some banks take what feels like ages, some are done within 12 hours. But I have never experienced a transfer taking more than 36 hours, even internationally.
> The immidiate wire transfer exists only for a few years and costs money for initiating one for some banks.
SEPA Instant Payments we're a bit slow to roll out but are now catching up. They're now fairly widespread in terms of availability and cheap as well (the banks I have accounts at charge 50ct for an Instant Payment). Apparently there is also legislation in the works which would make instant payments the default by making them mandatory to support and capping their prices to the prices of non-instant SEPA payments [1]
Same day transfers have been a reality for a long time (at least in The Netherlands), the fact that it takes 3 - 5 days here in the US is absolutely insane.
I see your point in theory, but in practice it doesn't seem to apply.
Even regular bank transfers, i.e. transferring money from one checking account to another checking account, usually take a day to clear over here. I am talking about regular bank accounts in Germany, by the way. The economy manages to run just fine with this system.
As long as something as basic and fundamental as simply moving money from point A to point B is that slow, I really don't buy the argument that the real economy needs transactions on financial markets to clear that quickly. What's the point of having a trade clear in milliseconds if it takes me a day to transfer the money to a different account?
I get the whole interbank exchange weirdness, but still. Banks basically transfer money akin to using analogue switchboards.
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