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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."
(Score: 2) by jelizondo on Tuesday December 16 2014, @04:14AM
Using a U.S. Bank, yes, you are right. But parent was referring to non-US banks. You can have all the numbers your little hearth desires, but without my token (a physical one) you may not get any money out of my account.
U.S. banks are so backwards it's unbelievable. Just across southern border, every bank will demand three things before they let you transfer money out of an account using the Internet: a username (or card number), a password and the code generated by the token. Got three out of two? Sorry, our of luck!
Also, banks will transfer money to any other bank the very same fucking minute! Why does it take days to get a transfer in the U.S.? I keep two accounts in Mexico at two different banks, and for tax purposes, I transfer money from one to the other routinely. It's click on OK and wham! it appears in the other bank's account!
And don't tell about international transfers. Last year I wired some money to my daughter in South Africa and it took two WHOLE weeks for the money to arrive. I should have used PayPal, even it is more expensive.
What keeps U.S. banks so backwards that even a Third World Country can offer better services?
(Score: 2) by urza9814 on Tuesday December 16 2014, @03:01PM
As an American, that sounds...slow and difficult.
If someone wants to give me money, all they have to do is write the amount on a piece of paper and sign it (ie, write out a check). Once that check is in my hand, I can have the money available to withdraw from my account in under a minute. It doesn't take days. I don't have to call the bank, I don't need usernames and passwords and some temporary token key. I take the check, take a photo of it with my phone, and the money is in my account available for withdrawal instantly. And the image of the check (both those I write and those I deposit) is included in my bank statement so I have a perfect record of where the money came from or went to and why.
It's not the most secure thing in the world, but I can't really think of a more convenient system.
There's two places where I use online transfers. One is to pay my credit card bill, the other is my taxes. The credit card bill isn't bad, they store the account details and I just give them a payment amount and a date to pay it. The taxes are a huge pain though, gotta reenter all the details every year and half the time I transpose a digit or put in my saving account number instead of the checking account number and then I've gotta jump through hoops to get it corrected or they notice the error and end up mailing me a check or bill (which I usually prefer, but they charge a fee)...mailing a check is just a hell of a lot easier to me, you can't screw it up and you don't have to memorize a bunch of long strings of digits.
The beauty of a paper check is that all you need to know is who you're paying and how much you're paying them. There *are* reasons we built an ecosystem around the paper check instead of bank transfers. Paper checks aren't so good for crossing national borders, which is probably why Europe was so much quicker to get rid of them. Americans don't generally do much of that. So instead of focusing on better bank transfers, American banks focused on better check processing. Which has worked out pretty well as far as I'm concerned. This isn't the '90s anymore; even a paper check can be pretty much instant. Hell, you could even send one by email or SMS, although you'd usually use an "e-check" there (which is basically just a bank transfer in disguise.) Or are you not familiar with those features due to dealing with so many backwards foreign banks? ;)
(Score: 2) by jelizondo on Tuesday December 16 2014, @08:41PM
Right, only thing I need to do is send a U.S. paper check to pay my suppliers in Mexico...
Thank you for pointing it out.
Except, of course, that it will not work and having checks (even e-checks) does not make U.S. banks the best in the world.
And you know what is funny, one of the banks I used (not anymore) in Mexico was Citibank, which offers all the electronics transfers you need, uses security tokens, has an App for managing your account and all the goodies, which they DON'T offer in the U.S. Why offer better and cheaper services south of the border? Because Americans are used to lousy banking services and in Mexico they must compete against BBVA and Santander (Spain) which offer European-style banking.
Get out of the basement more often my friend.
(Score: 2) by urza9814 on Tuesday December 16 2014, @09:00PM
So...the only flaw you found with what I said was the flaw I explicitly pointed out in my post?