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Why are bank transfers so complicated in the US?

#1
On another thread I pointed out that a particular Vdlp guide could be sent to the US or Canada if payment were made via bank transfer.

Several people told me that it was a complicated, expensive process.

I have lived in Portugal recently, and, as in Spain, our bank routinely did bank transfers. That's how we paid our rent, put down deposits on casas rurales we were renting, paid our bills. There were no charges and no hassle. That's just the way people transfer money, it seems.

I can't figure out why the situation should be different in the US. Surely, US banks use electronic transfers for all of their payments. My bank account provides free bank transfers so I assumed this was the situation generally, but I guess not. So what is going on? Why would there be such a difference in banking practices?
 

falcon269

no commercial interests
Camino(s) past & future
yes
#2
Bank transfers are different from sending electronic checks. It takes the labor of a bank employee, so they are expensive. Typically, commercial accounts are set up to accept direct payments, a credit card company, for example. An individual, however, gets a mailed check as the result of the payer sending an electronic payment.
 
#3
Thanks, falcon.
I assume that all money transactions involve some human involvement, but you're saying there's more involved with a bank transfer?

In my experience, there's no electronic check -- a bank transfer just transfers the money right into your bank account. At least that's what it did in Portugal.

If I have my paycheck directly deposited into my account, isn't that a bank transfer?

But even admitting that I don't have the faintest idea about how bank transfers work, I just don't understand why they are free and easy in Spain/Portugal (and the rest of Europe??) and so cumbersome in the US.
 

jpflavin1

Veteran Member
Camino(s) past & future
Frances(10,11,17), Vasco(12), Salvador(13), Primitivo(13), Norte(14), Madrid (16), Mozarabe (18)
#4
Laurie:

To try and explain the nuances of the American banking system is pert near impossible. I think the easiest way to explain is that the American way to do business revolves around profit.

I remember my shock when I worked in Canada and saw my first credit card bill that had a 5% charge for currency exchange. I immediately opened a Canadian bank account.

As far as transfers, there are several ways to avoid fees. Keep $250K in an account and the bank will usually wave all fees. The two individuals transferring money back and forth have accounts in the same bank (ie: Chase, Citi, Duetsche bank, etc.)

Direct deposit (a type of transfer) is not charged because it reduces the cost for the company and puts money into the bank.

Joe
 

jirit

Moderator
Staff member
Camino(s) past & future
Camino Frances 2007,
Via Francigena Italy, 2008,
Jakobsweg Austria 2010,
Camino Frances 2011,
Le Puy to Lourdes 2012,
Via de la Plata 2013,
Future:
Ökumenischer (Via Regia), Germany,
Lycian Way, Turkey
#5
The real issue with electronic transfers between North America and Europe for example lies mostly with the protocols and formats used to facilitate the transfers.

Within Europe, all the banks have adopted a single set of formats and protocols hence interbank transfers are easy to do - and the Europeans have been doing it this way for years.

Within the States, again it relatively easy to facilitate an electronic transfer between banks within the USA. Ditto for Canada.

But a different story if you want to electronic transfer money from say the US to Canada or Canada to the USA

I guess this is why Paypal exists - mind you it is horribly expensive to use
 
Camino(s) past & future
Nearly every year since 2006, often walking more than one route. 2018 was Camino #14
#6
Paypal charges 4% which is actually less than the bank charge here for transferring money.
I prefer it, but not a lot of Spanish hotels use it yet.

For booking, you can use http://www.booking.com and they will take your credit card number, not charge it until you arrive. It's worked best for me in most situations.

Here in the USA, both Bank of America and Charles Schwab banks charge at least 35 dollars for receiving as well as whatever charge the sending bank asks - much more than the 4% Paypal costs.

Keep in mind if a person is sending a 'gift' via paypal, there is no fee.
 
#7
So, taking all of these commentaries and adding to them the fact that I routinely receive bank transfers FROM Portugal to the US, again with no charge and no hassle, I am going to conclude that the villains are the US banks, who see this as a way to squeeze more money out of the consumer.

My evidence
-- this transaction is free in Portugal and Spain, both within Iberia and from Iberia to the US.
-- some US banks use the "perk" of free bank transfers to entice certain customers

I realize that is pretty slim evidence, so maybe I am missing something. And maybe I'm just looking for a way to demonize banks. :D
 

grayland

Moderator
Staff member
Camino(s) past & future
Yes
#8
But.....after all of this....has anyone come up with a way (from the U.S.) to get the VdlP guide from the Seville Amigos?
They only accept bank transfers as far as I can see. I know you can wait until you get to Seville but I always like to have it before I go.
Also..it looks like the opening times of the Amigos is pretty limited so it may be difficult to catch them open if you arrive on Friday, Saturday or Sunday.
 

fraluchi

Veteran Member
Camino(s) past & future
One every year since 2007
#10
peregrina2000 said:
.... I am going to conclude that the villains are the US banks, who see this as a way to squeeze more money out of the consumer....
When I visited the USA for the first time in 1981 I was surprised to see the use of cheques (checks) for any and all payments. Not only, but they appeared in varied formats. In Europe cheques were of standardised format and gradually gave way to other means of payment. Euocheques became quite expensive at the time. Today few Europeans use a chequebook. Bank transfers function through IBAN (International bank numbering) without transfer charges. Only when leaving the "zone" transfers are costly because of manual handling. :roll:
 

grayland

Moderator
Staff member
Camino(s) past & future
Yes
#11
peregrina2000 said:
HI, grayland,

Look in this thread, camino-mozarabe-and-via-de-la-plata/topic16674.html#p119681

Neville found a book store in Sevilla that sells them. At least there is a place with regular business hours where you can get one. Maybe that book store would send one to you if you called them. I would imagine they do credit card charge and send all the time. Good luck with this.
Thanks.
I am not sure how I missed that as I was following that thread.
I will try to contact them and see what I can find.
 

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