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  1. #1
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    I have been wondering about this for quite a while now.

    It seems that a lot of you americans are using checks as payment method, isn't that right?

    I know that America don't have a joint banking system, and that it can take time to transfer money from one bank to another. but how do you usually pay for stuff, by checks, plastic or cash? How do people get paid, by direct deposit or check?

    Who issues checks and credit cards, your local bank or some nationwide company? And what's the difference between a merchant account and a normal bank account?

    The reason for asking is partly CJ/merchants and partly curiousity. In Europe (at least where I am at) noone are using checks anymore (and noone has for 15-20 years). Salaries and almost all bills are paid by direct deposit, and at the stores people either use cash or plastic. Also, a lot of people are using internet banks to deposit their bills, replacing the recent common method which involved signing the bills and snail-mailing them to the local bank. Is that very different from how things are done in USA?

    Could someone please give me the basics?

    -- Less is more --

  2. #2
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    I can speak a bit on Canada.
    More and more banking is starting to move to the electronic age. Bills paid over the phone, diect debit to pay for other bills also. A chequeless society is probably still a ways off. Most of my agency business still involves cheques, while if of a personal nature it is more geared to plastic etc.
    Not all retailers have or can afford to offer direct debit payments in the store. I took my kids parka in for repair to a a tailors. She wouldn't take my master card, debit card or cheque. Only cash or visa card.
    So in time things are changing in Canada, but not quite to the extent you have there by the sounds of it.

    WW

    It was so cold last winter that I saw a lawyer with his hands in his own pockets.
    Give a man a fish he eats for a day. Teach a man to fish he spends the day drinking beer in the boat.

  3. #3
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    As far as paying for things I think most of us use plastic. Whether it be actual credit or debit (deducted near immediately from a "checking" account), its plastic. I never use checks and consider them archaic, though I've seen people writing checks for things such as $3 fast food meals. [img]/infopop/emoticons/icon_confused.gif[/img] I can't speak for all Americans but around here it seems like most people use plastic for things over say $10. Cash or plastic for small items under $10.. I've put under $1 on plastic before..and used cash on things up to a few hundred, but in general thats how it goes. I do use checks for paying bills through the post, the ones which aren't paid by some electronic means. I think the majority of people with "real jobs" are paid through direct deposit. My last employer also did away with all paper pay statements, they were sent only through (corporate) e-mail.

    I've been out to lunch with 15 people and all 15 are using their own credit card to pay... poor waitress...

    Online strictly plastic, strictly credit, NEVER debit -- too much risk. Would probably be unwilling to do echeck online also.

    I HTH and is what you were looking for [img]/infopop/emoticons/icon_smile.gif[/img]

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  4. #4
    Resident Genius and Staunch Capitalist Leader's Avatar
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    Common American Finance, Class 1:

    Note: This describes my local area. Some areas may be a bit different.

    Most j*bs pay by check. Some larger companies TRY to get employees to accept direct deposits, but a lot of people still take the old paper check at employers even with constant encouragement to take DD. But once someone experiences Direct Deposit, they are unlikely to go back to checks!

    I think that the preference for direct deposit shown by a lot of affiliates is different from the "general populace". The alternative for most of us is to wait for ages for a check to come from some other state--and hope it doesn't get lost or stolen along the way. So it's easier on the nerves when a network does Direct Deposit.

    Most people still pay bills by check, although direct transfer is on the rise. That's where the bill just yanks the authorized amount out of--you guessed it--your checking account. Only with no actual check being written. There's a mistrust in computer systems, probably stemming from the fact that when such systems first came out, things would get eyepoppingly screwed up--a LOT. (Think, million dollar local phone bills!)

    Despite the screwups of yesteryear, I personally HATE paper bills. They're way too easy to forget about.

    Some bills can also be charged but this isn't widespread yet.

    If you only signed a bill and sent it back here in the US, the company would inform you that you "forgot your payment"--IF they responded that nicely! And it'd be the talk of the payment office for weeks. Yet, I remember reading that in times long ago, it was possible to do that at grocery stores and actually get groceries. But those times were long gone before I was born!

    Groceries are paid by check in the vast majority of cases. This info comes from w*rking in 2 different grocery chains so I can be fairly specific. It's about 75% checks, 20% credit cards, and 5% cash.

    OTHER THINGS are usually charged (plastic).

    BIG things like cars and expensive furniture are usually "financed". In other words, a loan is taken out, which then generates bills. The down payment (when one is required), though, is typically by certified (or otherwise guaranteed) check. Showing a dealer cash can give them flips. Like I wanted a nicer license plate (This state has a few designs to choose from--this one was $5 extra), and when I handed over a Fiver to cover this, the salesman actually had to check with the manager about it! [img]/infopop/emoticons/icon_rolleyes.gif[/img] After deciding that rewriting all the paperwork to roll in another $5 was ridiculous, they accepted the r-r-r-real m-m-money.

    Things bought online, through the mail, or over the phone are Charged (plastic) in the vast majority of cases. Catalog places (mail) accept checks...but by the delay that's experienced by sending a check in, they don't really get too many checks.

    Pizzas are usually bought with Cash.

    Things under $20 or so, are usually bought with Cash unless there is a need for some kind of extra proof of purchase other than the receipt.

    Vending machines are popular in some areas. Currently, most of them take Cash, but there are prototypes out that will take credit cards. Buying a can of pop (soda) with a CC would be weird...

    On the other hand, some places REFUSE TO take checks. These include, most restaurants, all known fast-food restaurants, gas stations, movie theaters, and party ("convenience") stores. All of the above sell things that can't be taken back in case of bounced checks. Some will only accept cash, while others will also take credit cards.

    Like I said before, other area of the US may work differently but the above is how it is ehere *I* live...

    Hope this helps!

    It's the most wonderful time of the year! ~From a "Golden Era" Christmas Song

  5. #5
    ABW Ambassador FFoc's Avatar
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    I always buy pizza with a check, solely for the purpose of helping out the delivery driver (they do occasionally get held up, and all the cash is taken, but often checks are left behind), since he's the one ultimately responsible for paying the pizza bill.

    Tips are always cash, because tips that go "through the system" are taxed in full, while cash tips are taxed on a fixed basis.

    Only other time I use check is when obtaining a money order for something is prohibitive. Checks mess with your accounting...

  6. #6
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    It is so annoying receiving cheques as a payment method as an affiliate. Living in Australia it takes a week plus to arrive and is costing me $500 per month in bank fees and currency conversion fees.

    Find out how much top affiliates are making at http://www.profitpuppy.com/top-affiliates.htm

  7. #7
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    All, thanks for replying. [img]/infopop/emoticons/icon_smile.gif[/img]

    This is very interresting. I am very curious of nature, and I enjoy to understand and to get to the bottom of things.

    One question: What is a certified check? What's the difference from an uncertified check, and who has the authority to certify checks?


    Since you have been so kind to reply to such an extent, let me tell you a bit more about how it's done in Scandinavia.

    First of all, everyone has at least one bank account (I have three, none are saving accounts). Salaries, and most pensions, are paid directly to a bank account. No employer, except maybe some mam & dad stores, would accept to pay salaries any other way. Some special payments, like refunds or in some cases pensions, are paid by what we call a giro (looked that up in the dictionary). I guess it's like a check in the mail which the recipient later cashes at the bank or post office. Also, salaries and pensions are usually paid once a month.

    It's takes only a day or two to transfer money from an account in one bank to an account in another bank. A few years ago it could take a week, but then floating interest became illegal (the interest on the money between the time the money was deducted from my account until it was available for the receiver, money which the banks kept for themselves).

    Bills are sent by snail-mail. Every bill (a giro) has the same format, with the name of the payee, the name of the receiver, the please-pay-by date and the bank account number which payment is transferred to. The payee may pay the bill at the counter at any bank or post office, but as I mentioned, most younger people log into their internet bank and process the bill. The amount is automatically deducted from their account.

    The common method up until recently, signing bills and snail-mailing them to the bank, required having your signature scanned beforehand. Then you would just sign the bills, send them to your local bank where a computer processed the bills, checking the signed signature against your stored signature. If they matched, the computer would deduct the amount from your account and put it into the receiver's account. Yet another way to transfer money between accounts is using the phone as WW mentioned.

    Also, recently a couple of new methods has emerged. One is paying using your mobile phone (the amount shows up in your next phone bill), and another one is skipping snail-mailing the bills, instead bills are sent out by email or directly to your internet bank.

    I will tell you this, I'm 31 years old and I have NEVER in my life seen someone write a check!

    About cards: Most people have debit cards, but very few have credit cards. Using a debit card the amount is immediately deducted from the bank account, while payments for credit cards involves a bill in the mail once a month. For credit, people with debit cards may be allowed to overdraw their bank account instead.

    When paying for stuff, people either use cash or debit cards. I use cash myself, usually walking around with $500 in my pocket at all times (we have less than a fraction of the crime rate of USA). But more or less half pay with debit cards. Most stores have a phone line to their local bank, so I just process the card in the store and the amount is immediately deducted from my account. VISA and MasterCard are the most usual debet cards.

    I may use debit cards to pay for most stuff, even in a taxi or when I'm taking the train, for pizzas, at the gas station or at the hospital, - but not at the city bus, at my local doctor, nor at the local mom & dad car repair workshop I'm currently using.

    As Leader mentioned, big things are usually financed (and with a heavy interest). Mail orders are usually paid at the post office when you pick up the package.


    Don't forget to tell me about certfied checks... [img]/infopop/emoticons/icon_razz.gif[/img]

    -- Less is more --

  8. #8
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    Seems to me that most programs still write checks as an inconveniece to us. Also, so they can say "the checks in the mail" also it gives them a longer "float time" for when they actually have the money deducted from their account.

  9. #9
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    Cellophane,
    A certified check is a more or less a guaranteed check issued by a financial institution. For example: I go to my bank and get a cert check for $1000. I pay them the $1000 in cash or have them take it directly from my account. They then put that $1000 in one of THEIR accounts and give me a check for the money drawn on THEIR account not mine. That way the person who receives the check knows that it’s good. It’s kind of like a money order but you can get a cert check for larger amounts. An uncertified check would be one I write out of my check book drawn on my account. Looking at the check, there’s no way to tell if it’s good or not.

    As far as Americans and checks: I think we have been slower to adopt debit cards and DD because it’s been a lot easier for us to use checks. I’ve had checking accounts in the US and the UK, and I don’t think I ever wrote a check in the UK unless it was at the bank itself. To write a check in the US you usually just have to show your drivers license or other picture ID (yes our drivers licenses have out pictures on them, and in my state I have to renew every 5 years). The merchant then may or may not run it through Equifax or some other system to check the account. In the UK, you had to get a check guarantee card from your bank. Since I was only in the country for a year, I couldn’t get one.

    The banking issue that really blew my mind was the decentralized banking system. My account was with a national bank, but I opened my account in Coventry, so any business (deposits, transfers ect) with my bank had to go through the Coventry branch. In the US I can walk into any branch of my bank and make a deposit, withdrawal, or anything. Dealing with any branch is like dealing with the branch where I opened my account. The only possible exception is a bank that operates in more than one state might be set up as a separate business entity in each state.

    Jason
    “That’s the song I’ve been sangin for years, that’s the way the wild wind blows” – Robert Earl Keen

  10. #10
    Newbie Ivan22222's Avatar
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    "It is so annoying receiving cheques as a payment method as an affiliate. Living in Australia it takes a week plus to arrive and is costing me $500 per month in bank fees and currency conversion fees."

    Does anyone knows some affiliate programs which send payment through Western Union???

  11. #11
    Schlaumeier cumbrowski's Avatar
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    Nice Topic [img]/infopop/emoticons/icon_smile.gif[/img].

    I am a German who moved to Switzerland and then to the United States.

    I am now 28 years old and when I arrived 2 1/2 years ago in the US everything about Banking changed. It was like a 10 years time warp back into the past.

    I had to white my first check here. It was a totally new experience for me and I was asking myself, why?

    Banks in Europe raised fees for "paper" transactions, eliminated transaction fees for ATM usage at other banks machines to be able to reduce branches, made "electronic" checking (Giro) accounts free (no fees) etc.

    The opposite here, I do not pay fees, when I process paper checks, but pay every month a penalty fee for “Web Banking” and “Extensive usage of MS Money”.

    “Leader” is right; most salaries in the US are paid by check. More and more companies utilize direct deposit, but it’s not the standard.
    Hard to image, but a lot of working Americans do not have a checking account.
    Believe me or not, but it can happen, that you are not able to open a checking account here, because problems with your “credit history”.
    Most European countries did something against it and used their governmental supported banks to guarantee their people, that they can open a checking (giro) account, no mater what (Postbank, Sparkasse etc.)
    That was a necessity, because EVERY employer in Germany or Switzerland required Bank Information from their Employees to pay their Salaries. Salaries in Germany CAN NOT be paid via Check or Cash. They have to be paid to a Checking (Giro) Account.

    The Banking Industry also linked their computer systems (each Nation) to be able to send money (domestic) electronically via Bank Routing Code and Bank Account Number.
    International Transaction are handled via SWIFT Code Routing.

    All that does not exist in the United States (it does, but not to the same extent as in Europe). European Countries establish the system and banks, companies and retailers reacted to that. The electronic banking saved them money, so they enforced that, by outlawing (salary payment) or charging for non electronic transactions.

    Hey, when I do an “electronic” payment via Web or MS Money, the result can be a manual transaction processed in the background. I send the payment request and my banks prints and mails the checks for me.

    The United States is the world’s biggest economy, but their banking system lacks behind big time. I am looking forward they work on it and change it, even if that will kill a whole US specific Industry, the “Late Payment” Industry.

    Carsten

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  12. #12
    Schlaumeier cumbrowski's Avatar
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    For Non-US Affiliates.
    Wireing the money to Banks outside the US cost a fortune.

    Example. If I would like to electonicaly wire money to europe, I would have to pay $35.00 per Transaction (no matter the transaction amount).
    Getting, Sending, Cashing a paper check is way cheaper than that. Curious, isn't it?
    Most of the cost are coming from the Non-US banks anyway and have to be paid by the receiver.

    Carsten

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  13. #13
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    It's true that many working Americans don't have bank accounts. It was very difficult for me to get my first checking account because I had no credit record, and still more difficult to get a credit card even after I was earning good money.

    A lot of people take every paycheck directly to a check-cashing store that takes a big fee for cashing the check. It's almost as if the system is designed to perpetuate a class of people who live hand-to-mouth. Maybe Americans cling to checks because it's hard for many to get a checking account in the first place... once you have checks, you feel more secure and don't want to let them go.

  14. #14
    Schlaumeier cumbrowski's Avatar
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    Tell me about it.

    I was a "ghost" for credit institutions when I arrived in the US. Bankcrupt Citizens had a better Status than I had.

    They prefer People with bad credit over people with no credit. However, Credit History is a different story , alhough its kind of related to this topic, since people with no or bad credit history can be rejected by the banks and are therefore unable to open a checking account to
    allow the banking industry to take further steps into the future.

    The european countries reacted, the United States didn't, because its more important to spend millions of dollars to keep american girls virgin's until marriage. No Shit. Check Bush's activities, next to the war against terrorism.

    Carsten

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  15. #15
    Schlaumeier cumbrowski's Avatar
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    Proof for my last Statement

    German Site with very good reputation.
    http://www.heise.de/tp/deutsch/inhalt/co/13799/1.html

    Links to various US Boulevard Press sites are available in the german news report.

    Carsten

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  16. #16
    ABW Veteran Student Heyder's Avatar
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    B-O-L-O-G-N-I-A

    Banks don't check credit history nor require credit for opening up a checking account. Where are you people getting this crap? Haven't you heard of Wells Fargo, Citizens National or other US Banks? Anyone and their bankrupt uncle can start a checking account.

    Stop smoking your breakfast [img]/infopop/emoticons/icon_razz.gif[/img]

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  17. #17
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    I guess Carsten is refering to Credit Cards. The same happened to me. When I came over here in 98 I had to start with $500 limit on my first credit card. I had $20,000 back in Switzerland.

  18. #18
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    Check fraud is a big problem in the US. It is extremely easy to forge and steal checks. Most businesses prefer to get away from checks.

    Most the employers I know have gone the direct deposit route. Many small employers have gone to outsourcing payroll...and the out source company does direct deposit. My guess is that in 10 to 20 years you will stop seeing paper checks altogether. They are too insecure, too easy to forge.

    As for the affiliate programs, I am astounded that they send checks. It is substantially easier to set up ACH than a big check printing operation. The amount you get from kiting is generally less than the the cost of the check printing and mailing. Check printing and mailing generally costs about $1.75 per check.

    Accountingwise, cutting expenses generally looks better than interest you get from the check kiting.

    That affiliate networks are using checks shows that they are way behind the times and poorly managed.

    Check kiting is illegal in the US. If the networks are playing games to lengthen the time between receiving cash from the merchants and giving the cash to the affiliates, they will end up in court making the lawyer who launches the class action suit extremely rich.

    Finally, I am astounded that the big networks have not developed programs that pay non US affiliates (Europe, etc.) directly from banks in Europe, etc.. The tiny amount of interest they get while kiting the checks is more than offset by the expense of printing checks, check fraud and the loss of good will caused by their short sightedness.

    Failing to develop a simple program that localizes payments is a large flashing neon sign saying that the affiliate networks are poorly designed and managed. Having a program that localizes payments would show the networks were well run info-economy movers.

    boom!

  19. #19
    Full Member AAnnAArchy's Avatar
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    Heyder <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Banks don't check credit history nor require credit for opening up a checking account. Where are you people getting this crap? Haven't you heard of Wells Fargo, Citizens National or other US Banks? Anyone and their bankrupt uncle can start a checking account.<HR></BLOCKQUOTE>

    That's not true. There are people who are unable to open bank accounts. People, who in the past bounced checks. In fact, I know someone whose bounced check wasn't even their fault (it was the bank's), but their name was put on whatever list the banking industry has and years later is still unable to open a bank account.

    So, it does happen.

    That said, for about ten years now I've barely written any checks and have stepped foot inside a bank maybe three times. I've tried to convince my family members that all banking should be done by computer and ATM, but they still hang on to doing things the old way.

    AAnn

  20. #20
    Super Sh!t Stirrer SSanf's Avatar
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    I write four checks a month. All other transactions are cash except to THMedia for whom I make a special exception. I also buy a bank check for overseas ocassionaly. I buy my cars for cash and pay no interest charges on anything.
    My money purchases a lot more than my friends credit.

    The Wolf Credo: Respect the elders. Teach the young. Cooperate with the pack. Play when you can. Hunt when you must. Rest in between. Share your affections. Voice your feelings. Leave your mark.

  21. #21
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    Heyder, I really was turned down for a checking account because I had no credit record. I had not bounced a check; I had no financial history at all. Maybe there was some other reason for turning me down, but "no credit record" is what they told me.

    Wish I could give you the name of the bank, but I don't remember, it's been too long. Anyway, it was an eye-opening experience for me.

  22. #22
    Schlaumeier cumbrowski's Avatar
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    You can see, the American (electronic) Banking is years behind other countries.

    The years will be decades, if nothing happens within the next 10 years.

    I am confident and hope that cheap electronic banking will be normal and paper check processing a thing of the past with the same fee's for electronic transfers of today.
    "Send me your Routing Code and Account No. and you will have your money in 1-3 Business Days".
    That's what I want to hear.

    Right now its the opposit. US Banks reward you by using paper checks and charge you penality Fees for utilizing Web Banking or Banking Software (like Money, Quicken etc.), Creditors charge you Late payment fees for checks lost in the mail.
    May it die for good.

    Carsten

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