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posted by LaminatorX on Monday December 15 2014, @01:53AM   Printer-friendly
from the credstick dept.

Nathaniel Popper writes at the NYT that the Citizens Bank of Weir, Kansas, or CBW, has been taken apart and rebuilt, from its fiber optic cables up, so it can offer services not available at even the nation’s largest bank. The creation of the new bank, and the maintenance of the old one, are the work of Suresh Ramamurthi and his wife, Suchitra Padmanabhan who were born in India and ended up buying the bank in Kansas in 2009 after living in Silicon Valley and passing through jobs at Google and Lehman Brothers. Their goal was to find solutions to logjams that continue to vex consumers all over the country, such as the obstacles that slow money moving from one bank to another and across international borders. The new services that CBW is providing, like instant payments to any bank in the United States, direct remittance transfers abroad and specialized debit cards, might seem as if they should be painless upgrades in an age of high-frequency trading and interplanetary space missions. But the slowness of current methods of moving money is a widely acknowledged problem in the financial industry.

In the United States the primary option that consumers have to transfer money is still the ACH payment. Requests for ACH transfers are collected by banks and submitted in batches, once a day, and the banks receiving the transfers also process the payments once a day, leading to long waits. ACH technology was created in the 1970s and has not changed significantly since. The clunky system, which takes at least a day to deliver money, has become so deeply embedded in the banking industry that it has been hard to replace. CBW went to work on the problem by using the debit card networks that power ATM cash dispensers. Ramamurthi’s team engineered a system so that a business could collect a customer’s debit card number and use it to make an instant payment directly into the customer’s account — or into the account of a customer of almost any other bank in the country. The key to CBW's system is real-time, payment transaction risk-scoring - software that can judge the risk involved in any transaction in real time by looking at 20 to 40 factors, including a customers’ transaction history and I.P., address where the transaction originated. It was this system that Elizabeth McQuerry, the former Fed official, praised as the “biggest idea” at a recent bank conference. "Today's banks offer the equivalent of 300-year-old paper ledgers converted to an electronic form -- a digital skin on an antiquated transaction process," says Suresh Ramamurthi. "We'll now be one of the first banks in the world to offer customers a reliable, compliant, safe and secure way to instantly send and receive money internationally."

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  • (Score: 3, Informative) by Kell on Monday December 15 2014, @02:01AM

    by Kell (292) on Monday December 15 2014, @02:01AM (#126053)

    Of course, the elephant in the room is that while banks sit on your money waiting to transfer it, they are using it as capital to invest (effectively taking the interest that would otherwise be yours). Banks have no incentive to be quick with payments for mom-and-pop clients.

    Scientists ask questions. Engineers solve problems.
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  • (Score: 2, Informative) by Anonymous Coward on Monday December 15 2014, @03:15AM

    by Anonymous Coward on Monday December 15 2014, @03:15AM (#126067)

    As a volunteer for a small organization I keep track of one-time membership fees (~USD$500) that come in to the USA from university students around the world. At first I accepted international bank transfers, but this quickly turned into a nightmare with multiple banks taking additional fees. The other problem was tracking--money would appear in our bank with no reference as to the source. I've now settled on two expensive options, Western Union and PayPal which take about 8%(?) and 4% fee respectively. At least these services work reliably and consistently.

    The really crazy thing is that the best option (easiest for me--remember, I'm the volunteer) is to send me a USA check. Often a non-USA student can get a relative or former classmate that lives in USA to send me a check.

    I sure hope that Citizens Bank of Weir, aka CBW are able to solve some of these international problems. tfa is very positive and also mentions that this bank also supports [] So far this only processes payments from USA to India, for a very low fee. Hopefully this service will expand.

  • (Score: 0) by Anonymous Coward on Monday December 15 2014, @06:52AM

    by Anonymous Coward on Monday December 15 2014, @06:52AM (#126104)

    With money going in and out all the time, what difference does 1 day for 1 customer make out of all of the customers? Unless the bank sees panic withdrawals, there is capital to invest.

  • (Score: 2) by davester666 on Monday December 15 2014, @07:51AM

    by davester666 (155) on Monday December 15 2014, @07:51AM (#126111)

    Banks are no longer [if they ever were] to help you with your money.

    They are now to help themselves to your money.

    • (Score: 2) by Magic Oddball on Monday December 15 2014, @10:15AM

      by Magic Oddball (3847) on Monday December 15 2014, @10:15AM (#126122) Journal

      That's why I dropped my old bank (the second I'd used) and switched to a credit union in my area everyone seemed to really like — they're owned by the members, controlled by volunteer boards, and any profits have to be spent to improve things in a noticeable way, like reduced/eliminated fees, more ATMs, etc. So far it's been a hell of a lot nicer to deal with than the two nationwide banks I used.

      • (Score: 2) by M. Baranczak on Monday December 15 2014, @10:36PM

        by M. Baranczak (1673) on Monday December 15 2014, @10:36PM (#126332)

        I've done the same thing, and I'd recommend it to everybody. The only downside is ATM fees when I'm traveling out of town (my credit union only has about a dozen ATMs). But considering how much I save on the other fees, I still come out ahead.

        • (Score: 2) by urza9814 on Tuesday December 16 2014, @02:24PM

          by urza9814 (3954) on Tuesday December 16 2014, @02:24PM (#126492) Journal

          Add me to the list of satisfied credit union members as well.

          Mine actually refunds ATM fees, which is great. There is a limit -- I think it's $12/month for me right now, but that's 3-4 ATM uses which is plenty since I mostly pay for everything with my card. The limit changes somewhat depending on how many of their services you use (ie, if you have loans, a credit card, direct deposit, etc) and I think the max is $20/month.

          Funny thing is, my credit union is PSECU -- the Pennsylvania State Employees Credit Union. I'm not a PA state employee (my mother is -- though I think they're open to the public now anyway) and I don't even live in PA. I live in Rhode Island. The nearest branch of my bank is around a thousand miles away, has been for three years, and it's literally never been an issue. I can do everything online or at any bank's ATM with no fees.

          Then there's their "negative fees". See, at the end of every year they redistribute the majority of their profits back to the members, based on how much money is in your account and how many of their services you use. So where many banks charge a fee for using a debit card, my bank pays me a couple bucks a year for it. They pay you for having direct deposit, they pay you for using electronic statements, they'll even pay you for having a loan or a credit card. It usually doesn't work out to much (I got $16 last year -- didn't qualify for much though 'cause I don't have much money) but it sure beats paying a fee!

  • (Score: 2) by zeigerpuppy on Monday December 15 2014, @11:06AM

    by zeigerpuppy (1298) on Monday December 15 2014, @11:06AM (#126125)

    I was changing coins for notes at a bank one day and the teller was trying to get out of their duty by saying they'd only change the money if I was a customer at that bank. I asked, "is this a bank?"; "Yes sir", "well then do your [internal monologue=fucking] job and change my money [bitch]". Of course they agreed.

    Anyway, the old guy at the teller next to me then made a classic comment, "they screw you on the way in... and on the way out"

    • (Score: 0) by Anonymous Coward on Monday December 15 2014, @12:12PM

      by Anonymous Coward on Monday December 15 2014, @12:12PM (#126130)

      Banks have a duty to change your money?