Text 26855, 90 rader
Skriven 2012-03-17 09:26:26 av Robert Bashe (2:2448/44)
  Kommentar till text 26841 av Roy Witt (1:387/22)
Ärende: Nicholas Kill's name
============================
Roy Witt wrote to Robert Bashe on Friday March 16 2012 at 06:02:

RB>> And I still use regular checks (for my account) to pay people I don't
RB>> like and want to cause a lot of trouble to, such as the income tax
RB>> office ;-)

RW> That doesn't work here. The 'Check 21 Act' of 2003, effective the
RW> following year allows the recipient of the original paper check to
RW> create a digital version of the original check (called a "substitute
RW> check"), thereby eliminating the need for further handling of the
RW> physical document.

I was talking about the trouble a recipient has to transport a paper check to
the bank and the time it takes to clear, not about the processing time in the
bank.

A "normal" payment here simply appears as a credit in your account max. 3 days
(and often sooner) after the transfer was initiated at the payer's bank (in
future the EU plans to cut the allowable time to only _one_ day). You have
immediate and full use of the money.

When I send a check, the recipient first has to physically process it, get it
to the bank, and then the money is credited to his account - but with a proviso
that the sum will be debited to the account if the check bounces. You only get
full, unlimited use of the money 10 days after the check has been deposited.

A direct account transfer is simple, fast and requires no action by the
recipient. If I send a check, he has the hassle of dealing with a paper check,
plus the disadvantage that he doesn't have full, unlimited use of the money
until a few days after the deposit.

RW> Once this occurs, the funds are transferred from your account to the
RW> payee electronically.

I'm aware of the system, but the disadvantage is that you still have to send a
_paper_ check through the mail (several days delivery time) and the recipient
still has to cash it and wait for the check to clear. This isn't comparable to
the direct account transfer system we use here.

RB>> In Germany, the law is that a bill is considered paid the minute you
RB>> send the check, not when it is cashed and the money deposited to the
RB>> recipient's account.

RW> Hmmm. I wonder if there is such a law here. This is worth looking into
RW> because I have one bill that is considered late on the 10th and that's
RW> usually the day that I send out checks.

I doubt if there's such a law in the States, but you could check. But you point
out still another matter - you have to make out paper checks, get them into an
envelope and pay postage to get them mailed (or have your bank do this for you,
so-called "Internet payment" which doesn't have much to do with the Internet at
all).

All I have to do is use a home banking program to make out an account transfer
slip and send it off via the Internet to the bank computer. Never have to leave
my chair behind the monitor to do that, and so I pay my bills as they arrive.
Or I set up an automatic payment on such and such a day of each month (or every
quarter, or on a specific day) for recurring payments, and can then forget the
affair. Or I can also allow the payee to directly withdraw the payment from my
account, something that is very popular here (by law, you can reverse the debit
without giving a reason for up to 6 weeks after it is made, and the payee has
to foot the bill), but that I don't care for since I like to do my banking
myself.

RB>> In contrast, a bill is only considered paid when the money is
RB>> credited to the recipient's account if you use an account-to-account
RB>> transfer. Naturally the law is obsolete, but it still applies here.

RW> If that applies to an electronic transfer as outlined above (Check
RW> 21), then that is the same day the paper check is processed by the
RW> payee.

Not quite. First, the payee has to receive the check. Then - cursing me for the
inconvenience ;-) - he has to process the check in his accounting. Then he has
to send the check to his bank. Then there's a 10-day period in which he has no
full, unlimited access to the money. When the alternative is a direct account
transfer, the extra effort required is irksome - but checks are still allowed
as payment in Germany, and are very occasionally used (but only very rarely by
private persons).

RW> i.e. electronic transfer from account to account...

Only after the check has arrived at the payee. In the direct acount transfer,
nothing ever has to be on paper, and there is no time lost sending a check
through the mail.

Cheers, Bob

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