AHC: American Giro System

Checks basically don't exist in Japan, Belgium, Germany, or Sweden.

I have no idea about the proposed alternate timeline, because I simply don't know enough about how the US banking systems functions or dysfunctions, but I do have an anecdote to illustrate just how rare cheques are in Germany.

A few years back my health insurance was legally obligated to pay all their members some money back.

Now there were a ton of ways they could have accomplished that, like for example transferring the money back exactly to where it came from or simply taking less the next few times they took your money until everything was evened out.

They choose instead to send cheques by mail.

Maybe they hoped that many of their customers would throw the letter away due to not knowing what to do with it. (A lot of people did.)

I would like to say that I am not that stupid, but I only became aware of the cheque because a family member who is with the same insurer phoned me and told me not to throw that letter away.

Intrigued by the whole thing, I took the cheque to my bank to see if they could turn it into money. The first person I spoke to had no idea what to do about this piece of paper, so they called for backup. That backup wasn't quite sure how to proceed either so they called a third person for help.

In the end it took three people to figure out how to process the cheque correctly.

It was simply something so obscure that they so rarely encountered it that they had to look up the correct procedure. Too much had changed since cheques were commonly used.

A few weeks later I heard on the news that the whole thing had caused lots of trouble all around and the insurance company was now going to transfer the money the proper way to anyone who hadn't successfully managed to cash their cheque.

So the takeaway from that is that cheques may still be legal and valid ways to transfer money here, but nobody uses them anymore.
 

nbcman

Donor
AnbinderEmbed.jpg

Checks basically don't exist in Japan, Belgium, Germany, or Sweden.

I like the Swedish PM humiliating the bank executives into speeding up check clearing. I wanna see some President do that. And it doesn't even take Modern IT to make bank transfers instant, Wire transfers have been with us since the 19th century.
While USAians may write checks in the course of the year, it is a small percentage. I maybe write 5 checks a year in comparison to over 200 EFT payments and many hundred more credit card transactions. Chart is deceiving on how the US conducts their financial transactions.
 
I manage four checking, three credit card, and am directly involved in a couple other bank accounts. Some mine and some of non profit organizations I am a officer in. One problem I've noticed just emerging in the past 3-4 years are 'erroneous' electronic transfers from checking accounts. Since many of these specific errors were on the part of a large prominent global & US based bank that has had other scandals in the past few years at least part of the problem is clear. The other errors originated with businesses in the retail sector.

... Saves on a lot of fraud as well.

This may be in error. Check fraud may still occur, but I don't personally see examples of it any more. Twenty years ago it was still a visible and important problem in the circles I did business in. Now I never see it & very seldom hear of it. Overdraft fees may be the largest loss to US bank customers now than check fraud.

Looking this over it appears to me the US banks ignored starting a Giro type system is because they were building and selling a credit card system. Thats been referred to a couple other times in this thread. I clearly recall predictions made in the 1960s & 1970s how credit cards made checks obsolete & paper drafts would be unknown before the end of the century. I'd also note that the banks also implemented the debit card system in the past 2-3 decades. At this point I'm unclear on the specific differences between the debit card system & the Giro system. On the surface they seem to be very similar. Are the differences important here, or irrelevant?

I reorganized my business admin to reduce the need for a bookkeeping employee. Doing the books myself led to increasing the use of cash to reduce bookkeeping. Cash is as fast as a credit or debit card at point of sale, way faster than checks, the bookkeeping is way closer to 'one and done' entry. Most important is that eliminating dozens or hundreds of petty transactions from the credit card and checking account statements make monitoring those for error and fraud far faster. The only system faster is having a charge account with my vendors, tho that is a fading practice as well. Many of the large suppliers avoid that bookkeeping cost on their side, and their liability for fraud or error. Cash is not practical for most businesses, but I've made it work for me. I've also been blessed by two different CPA/tax accountants for not using QuickBooks, so maybe I'm a complete maverick in accounting matters.
 

kernals12

Banned
I manage four checking, three credit card, and am directly involved in a couple other bank accounts. Some mine and some of non profit organizations I am a officer in. One problem I've noticed just emerging in the past 3-4 years are 'erroneous' electronic transfers from checking accounts. Since many of these specific errors were on the part of a large prominent global & US based bank that has had other scandals in the past few years at least part of the problem is clear. The other errors originated with businesses in the retail sector.



This may be in error. Check fraud may still occur, but I don't personally see examples of it any more. Twenty years ago it was still a visible and important problem in the circles I did business in. Now I never see it & very seldom hear of it. Overdraft fees may be the largest loss to US bank customers now than check fraud.

Looking this over it appears to me the US banks ignored starting a Giro type system is because they were building and selling a credit card system. Thats been referred to a couple other times in this thread. I clearly recall predictions made in the 1960s & 1970s how credit cards made checks obsolete & paper drafts would be unknown before the end of the century. I'd also note that the banks also implemented the debit card system in the past 2-3 decades. At this point I'm unclear on the specific differences between the debit card system & the Giro system. On the surface they seem to be very similar. Are the differences important here, or irrelevant?

I reorganized my business admin to reduce the need for a bookkeeping employee. Doing the books myself led to increasing the use of cash to reduce bookkeeping. Cash is as fast as a credit or debit card at point of sale, way faster than checks, the bookkeeping is way closer to 'one and done' entry. Most important is that eliminating dozens or hundreds of petty transactions from the credit card and checking account statements make monitoring those for error and fraud far faster. The only system faster is having a charge account with my vendors, tho that is a fading practice as well. Many of the large suppliers avoid that bookkeeping cost on their side, and their liability for fraud or error. Cash is not practical for most businesses, but I've made it work for me. I've also been blessed by two different CPA/tax accountants for not using QuickBooks, so maybe I'm a complete maverick in accounting matters.
Giro is paper based and involves no swipe fees. There's no point in switching now since Check usage is plunging rapidly, but even very recently (In 2000, check transactions outnumbered credit and debit card payments COMBINED), it would've been useful.
 

Anderman

Donor
Giro is paper based and involves no swipe fees. There's no point in switching now since Check usage is plunging rapidly, but even very recently (In 2000, check transactions outnumbered credit and debit card payments COMBINED), it would've been useful.

You have to pay fees for your giro account and sometimes a fee for each transaction. A debit card system and a giro system have a lot of similarities but as stupid as it sounds in a pure giro system the difference is there is no card. As example if a companie wants to pay the wages of its workers, with a debid card the manager has to go to every sincle worker and swipe the company debit card through the debid card swipe machine of each worker (every worker has to have one). In a giro system the company writes a advice of payment to its bank so transfer x amount of money ot worker 1, y amount to worker y and so on. Today this is done online.
A debit card could be defined as a man portable part of a giro system.
 

kernals12

Banned
I think the best POD for this would be around the time before the Post Office ended its banking program. The Postmaster General could've asked for permission from congress to begin a Giro transfer program to shore up the flagging business.
 
I reorganized my business admin to reduce the need for a bookkeeping employee. Doing the books myself led to increasing the use of cash to reduce bookkeeping. Cash is as fast as a credit or debit card at point of sale, way faster than checks, the bookkeeping is way closer to 'one and done' entry. Most important is that eliminating dozens or hundreds of petty transactions from the credit card and checking account statements make monitoring those for error and fraud far faster. The only system faster is having a charge account with my vendors, tho that is a fading practice as well. Many of the large suppliers avoid that bookkeeping cost on their side, and their liability for fraud or error. Cash is not practical for most businesses, but I've made it work for me. I've also been blessed by two different CPA/tax accountants for not using QuickBooks, so maybe I'm a complete maverick in accounting matters.

Would not the frequent need to deposit all the petty cash to bank meant frequent trips to the banks?
 
AnbinderEmbed.jpg

Checks basically don't exist in Japan, Belgium, Germany, or Sweden.

I like the Swedish PM humiliating the bank executives into speeding up check clearing. I wanna see some President do that. And it doesn't even take Modern IT to make bank transfers instant, Wire transfers have been with us since the 19th century.
Humiliating the boss is a good way to get your ass handed to you...
 

TruthfulPanda

Gone Fishin'
Will mass use of cheques simply die out with the older generation?
The way I see it, USA society began to use cheques earlier and on a larger scale that most of Europe.
The ex-Communist countries, or Poland at least, where consumer banking arrived in the mid '90s, practically skipped the cheque stage and went directly into debit cards (credit cards never went big and are now marginal).
 
Looking this over it appears to me the US banks ignored starting a Giro type system is because they were building and selling a credit card system.

A major issue in US banking is that regulation is done at the state level, which IIUC credit cards avoided.
 
Would not the frequent need to deposit all the petty cash to bank meant frequent trips to the banks?

No.

Customers very seldom pay cash, I don't ask for it. & I avoid most petty jobs with small payments. I seldom visit the bank more than once every four days. The branches I deposit at are very close to other places of business for me. Putting money into the account is a very petty cost for me in time, and there are no charges by the bank.

For expenses I've been able to anticipate average requirements between bank trips. Retaining part of the customers pmt as cash covers the petty expenses. Pmts out for incidental materials, expendable tools like drill bits & saw blades, paint brushes, ect.. are where the cash is used. Commonly purchases under $150.00. Large purchases can be scheduled in bundles to reduce transaction and bookkeeping time. Employees are paid by check or direct deposit every two weeks. Its the petty & difficult to anticipate stuff that burns away time. Reducing the time for bookkeeping of that 20% of my business cost has chopped bookeeping time better than half.
 

kernals12

Banned
A major issue in US banking is that regulation is done at the state level, which IIUC credit cards avoided.
There's tons of federal regulation. Glass Steagall, Dodd Frank, the SEC, and the CFPB all being prominent examples.
 
my place of business hasn't taken checks in years. The places that do take checks anymore seem to be more of the 'scan the check, give it back to you' type of transaction. I still use checks to pay bills that arrive in the mail (*waits for calls of 'dinosaur!' and 'fossil!' to die down), but my debit card for most of everything else and cash for small things. At work, cash still makes up about half of our sales, but we don't do bank deposits anymore... we have a 'cash feeder' safe; once we balance drawers, we feed bills into the safe, which scans and records them. Then, an armored car company comes by once a week to empty it. I have noticed over the years I've worked at my current job that cash is (slowly) becoming less and less of the business...
 
There's tons of federal regulation. Glass Steagall, Dodd Frank, the SEC, and the CFPB all being prominent examples.

Yes today, but not to consumer banking in the 50s and 60s when the credit card industry was developing, and the US banking system was highly fragmented.
 
No, these are Gyros
1200px-Pita_giros.JPG


maxresdefault.jpg

1200px-3D_Gyroscope.png

I’d really like a giro system so my settlement checks clear faster. I’d like to buy gyros for lunch, get a gyroscope toy for my kids, and save up for a gyrocopter.

To make that happen, follow the money and make some start-up get on board with it and then take off. If the next Google uses it (or more likely the next eBay, Craigslist, Amazon, etc.) or makes it work, then America will follow.
 

kernals12

Banned
I’d really like a giro system so my settlement checks clear faster. I’d like to buy gyros for lunch, get a gyroscope toy for my kids, and save up for a gyrocopter.

To make that happen, follow the money and make some start-up get on board with it and then take off. If the next Google uses it (or more likely the next eBay, Craigslist, Amazon, etc.) or makes it work, then America will follow.
We already basically have it, it's called a debit card. There's also paypal and venmo.
 
You have to pay fees for your giro account and sometimes a fee for each transaction. A debit card system and a giro system have a lot of similarities but as stupid as it sounds in a pure giro system the difference is there is no card. As example if a companie wants to pay the wages of its workers, with a debid card the manager has to go to every sincle worker and swipe the company debit card through the debid card swipe machine of each worker (every worker has to have one). In a giro system the company writes a advice of payment to its bank so transfer x amount of money ot worker 1, y amount to worker y and so on. Today this is done online.
A debit card could be defined as a man portable part of a giro system.
I have never heard of any system like you are describing. If a company isn't paying it's employees with checks then the only other way I have ever heard of or been payed myself is through direct deposit. You give your employer your transfer, branch, and account number and they just transfer the money to the bank account you gave them.
 
Canada has had direct deposit (giro) and a robust debit card system (Interac 1984) for a long time. Well before America, dunno about Europe.

If you want a Postal Bank to continue/boom the POD is convince Mo Udall in the late 1960s when he re-organized the shebang.
 
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