28 year old's startup wants to completely kill credit cards

[AlephZero]

No, *when* I make a purchase, I give paypal the exact amount of my purchase and the funds are made available immediately. I don't have to send money to Paypal to hold for me incase I wish to make a purchase in the future.

PayPal make their money by one of two ways. If the seller has a PayPal business account (or whatever they call them this week), they pay transaction commission and/or a monthly fee to run the account. If they don't have an account, PayPal holds the money for 2 or 3 days and earns short term interest on it before they pass it on to the seller.

But once Paypal have accepted the buyer's offer to pay, they guarantee to pay the seller even if the buyer then defaults on the payment. So the goods will probably be despatched immediately even if the money transfer takes a few days to complete.

If you regularly use Paypal both as a buyer and a seller (e.g. you are an EBay trader or you run your own e-business) then you can use a paypal account exactly the same way as a (non-interest-paying) bank account, and make "lump sum" payments and withdrawals to the account rather than separate transactions for each individual trade.

 

[AlephZero]

My landlord requires payment in one of three ways:

1. Cashier's/counter check. My cost: $3/month. My risk: Negligible.

2. Online via credit card: My cost: $10/month. My risk: Low.

3. Using their system, which gives them unlimited access to either my checking or savings accout: My cost: $0/month. My risk: Ridiculously unacceptable.

Clearly there are differences between countries here. In the UK, the risk to the customer from giving "unlimited access" by direct debit instruction is zero, because unlimited risk of fraud or error is carried by the bank, so that is no different from the "systemic" risk that the bank goes bust.

There are hardly any transactions done by cheque (check) any more in the UK. I haven't written a cheque for any payment for at least 15 years. I either use cash from an ATM (no withdrawal charges from ATMs at supermarkets, etc), a bank debit card, electronic banking over the web, or a credit card from another financial institution (not my bank).

The web banking is secured by a personal credit-card-sized device that generates a one-time password for each login. So even I can't even access my own account electronically, unless I physically have the security device with me.

The US banking system seems to be far more fragmented than the UK, where every retail bank is national, and most are international.

 

[Evo]

I remember when I lived in Texas and branch banking wasn't allowed. That meant that you could only do business at the location you opened your account, it didn't matter that the bank had a dozen locations, you couldn't go to them. It was the stupidest law I'd ever heard of.

 

[AlephZero]

I remember when I lived in Texas and branch banking wasn't allowed. That meant that you could only do business at the location you opened your account, it didn't matter that the bank had a dozen locations, you couldn't go to them.

My "branch" has been about 150 miles from where I live for more than 30 years now.

In fact I don't even know where it is physically any more. I got a letter years ago saying it had moved and its new address is just a Post Office Box number, not an real street name. (And the phone calls are always answered by nice people with Indian accents...)

 

[DaveC426913]

My "branch" has been about 150 miles from where I live for more than 30 years now.

In fact I don't even know where it is physically any more. I got a letter years ago saying it had moved and its new address is just a Post Office Box number, not an real street name. (And the phone calls are always answered by nice people with Indian accents...)

Y'know...



One day your money may have a hiccup. And you'll be on hold, asking those nice people with their accents where it's gone. Perhaps it's time to move your home branch to a slightly more bricks & mortar, flesh & blood management?

 

[Borek]

I haven't written a cheque for any payment for at least 15 years.

What is a "cheque"?

 

[leemadison11]

This is news to me and i am hoping to switch into Dwolla as soon i get other options. The benefit of this scheme is that my transaction is only being charged and that too at a minimal rate of $.25. Now let say i have to transfer $ 1000 to another account through PayPal, then it would mean that $30 plus extra, but if i do the same on Dwolla, it would be only $.25. So i am saving $30 or more per transaction. The revenue of Dwolla seems to be on number of transactions made and not on the amount per transaction.

 

[Evo]

This is news to me and i am hoping to switch into Dwolla as soon i get other options. The benefit of this scheme is that my transaction is only being charged and that too at a minimal rate of $.25. Now let say i have to transfer $ 1000 to another account through PayPal, then it would mean that $30 plus extra, but if i do the same on Dwolla, it would be only $.25. So i am saving $30 or more per transaction. The revenue of Dwolla seems to be on number of transactions made and not on the amount per transaction.

Get a bank account and transfer money for free, much quicker than dwolla, much safer than dwolla.

Did you read this?

The way it works is that you set up an account with them then transfer money from your bank to sit in your dwolla account, waiting for you to use it. Since it is a bank transfer

Why is my deposit taking so long to show up in my Dwolla Account?
Last Updated: Nov 08, 2011 01:41PM CST

It takes 2 - 4 business days to transfer funds from your bank account to your Dwolla Account or to withdraw funds out of Dwolla to your bank account. This process may take longer if the timeframe includes a weekend. Please note, due to varying bank processing timeframes, you will see the funds subtracted from your bank account prior to them posting to your Dwolla account.

http://help.dwolla.com/customer/por...king-so-long-to-show-up-in-my-dwolla-account-

Oh, and of course there will never be mistakes. Your money will never accidently get credited to someone else's account, or "lost", between your bank, dwolla, and the company due to receive the money.

 

[pmghss]

They all seem like a scam. A man in the middle who does nothing except accept money.

If it is so easy, and there are a lot of pay alternatives, then why can't everyone be there own man in the middle?

 

[turbo]

They all seem like a scam. A man in the middle who does nothing except accept money.

If it is so easy, and there are a lot of pay alternatives, then why can't everyone be there own man in the middle?

FDIC is one reason. You want your deposits to be insured in case the bank fails. It used to be that FDIC would only insure your deposits for up to $100K/person. That is doubled now, but that limitation could force you to use several banks/credit unions to avoid exceeding the limits on one or two accounts.

 

[russ_watters]

Y'know...



One day your money may have a hiccup. And you'll be on hold, asking those nice people with their accents where it's gone. Perhaps it's time to move your home branch to a slightly more bricks & mortar, flesh & blood management?

Guess I'm screwed: my bank doesn't have branches! All they have is interest bearing checking, atm fee rebates and an ap for my droid to instantly deposit checks via the phone's camera! :(

 

[PAllen]

Guess I'm screwed: my bank doesn't have branches! All they have is interest bearing checking, atm fee rebates and an ap for my droid to instantly deposit checks via the phone's camera! :(

Do you have a solution to the safety deposit box issue? The last brick & mortar bank account I have is purely to be able to have a safety deposit box, given all banks I've checked locally say they won't sell one unless you have some other relationship with them.

 

[turbo]

Do you have a solution to the safety deposit box issue? The last brick & mortar bank account I have is purely to be able to have a safety deposit box, given all banks I've checked locally say they won't sell one unless you have some other relationship with them.

Buy a nice old fire-resistant Mosler safe and keep the valuables at home. They are so honkin' huge and heavy that your biggest expense will be getting the movers to get it to your place. Still, you can find safes in the classifieds from time to time. Forget the little Sentry safes. If they are small enough for one or two people to lug off, they are worthless.

 

[AlephZero]

Y'know...



One day your money may have a hiccup.

No problem, Dave, If I really want face-time with a human, I can do that in any branch world wide. The most convenient one is about 50 yards walk from where I work. But there's no benefit in making that my home branch.

In any case that's not where my main financial assets are. Most UK retail banks have a lousy record for "financial advice" and investment products.

 

[DaveC426913]

No problem, Dave, If I really want face-time with a human, I can do that in any branch world wide. The most convenient one is about 50 yards walk from where I work. But there's no benefit in making that my home branch.

The point is face-time with the same human.

I am a "remote banker" too, but I sure want to have the option of being on a first name basis with someone when I need something from my bank.