Wire transfers tend to have a $35-$50 fee and require you to schlep down to the bank during business hours and fill out annoying paperwork. So, yeah, we don't use them except in emergencies.
Do we have a misunderstanding of the meaning of "wire transfer" here? Surely you can just send money to someone else's account through the bank's internet banking website?
How else do you pay for stuff like rent, and, well, anything, really?
Rent is usually paid by check, though poorer people who may not have bank accounts of any kind often use cash, too. Large-scale landlords (corporations renting many units) sometimes take credit cards or be able to setup automatic debit from a bank account. Obviously this sacrifices a good deal of control and if they screw up (intentionally or otherwise) you get to deal with all sorts of shit.
"Electronic bill payment" in the US often means your bank mails the receiver a check. Some subset of businesses are setup to turn that into a direct transfer. In no case has it ever been worth the hassle. I try very hard to avoid anything that can't be paid for with a credit card, since that is, by far, the lowest-friction payment method in the US.
Everything else, cash, check, credit/debit card, or sometimes direct debit. Only active businesses are going to be set up to take cards or do direct debits. If you want to give money to an individual, you give them cash or a check.
Okay, this explains quite a lot about the state of US banking, and why credit cards are so popular there. In Netherland, almost nobody uses credit cards, because they're less safe and more expensive than our other options. The only reason I've got a credit card at all, is to make international online payments. Even for domestic online payments, we've got a much better system. But internationally, there's nothing. Just credit cards.
I do get the impression that the US should be a great market to start a more modern bank and compete all the crappy old banks away. I'm sure all internationally operating banks have tried this. So why are they not successful?
The US is huge and diverse. Many of our states are larger than many European countries. California's population is about the same as Poland's, New York's is a bit bigger than the Netherlands/about the same as Romania.
But for more than two centuries, the US has, by Constitutional mandate, had one integrated market. Changing banking in the US means changing more than 300 million people, millions of businesses, and thousands of financial institutions with enormous inertia.
There is no way to do that quickly without Congressional intervention. Which brings us to gerrymandered congressional districts and half the country cleaning guns and stockpiling ammunition every time a new law is proposed that isn't to force the religious right's (im)morality on the country, especially when the law might cost anyone other than their political opponents money in the short term, no matter what the long-term benefits are.
There's a reason every minuscule step the US makes toward real health care reform is a big deal, decades after the rest of the western world had already figured it out.
It's mainly a result of the morass of outdated banking regulations in the US.... any "new" bank would have to follow the same rules and would end up with the same problems.
In Canada you can email people money up to $2000 but it costs $1.50 per transfer so I tend not to use it. You can also pay most bills from large institutions online (utilities, credit cards, tuition, taxes, etc).
I've paid rent using cash, checks, and pre-authorized debit (you give them your bank account number and sign a contract and they withdraw from your account every month). For vehicles or property it's usually a certified check. Anything else goes on my credit cards.
I believe you're a UK but no offense intended if you're not. As an actual american I only write about three or four checks per year, everything else is online.
We do pull and push.
Pulls are an unholy PITA to set up where you give them all kinds of personally identifiable information which they hopefully won't lose, then they make multiple couple cent deposits to your account, then you tell them what the amounts were and they tell the bank, which creates a certain relationship which in the Future is very historical trust based. So click here on your car insurance site to make your biannual car insurance payment exactly like the last 20 payments (well, slightly different amounts, but ...) Ditto the mortgage website, the electric bill, a couple others. Basically very long term relationships, I'm unlikely to just randomly stop paying the monopoly electricity provider. This is a direct acct to acct transfer.
Pushes are easy to set up but more of a pain to use on a monthly basis. No one has control over pushes other than yourself. You send money to a postal address, and who knows what they do on the back end, individual old fashioned checks or batch up or wire transfers who knows. This is more for credit cards or temporary less formal associations. You go to your bank website, tell them the postal address (they'll save it for later use) tell them how much, click send, off it goes.
Speaking generically, most USA people use credit cards or paypal or the zillions of small time competitors when someone wants money from them, and they interface with the bank for you. So Paypal can eat money directly out of my checking acct to send cash, up to certain limits. This is vaguely ATM like, sort of a web interface to a ATM. Or it just gets added to the CC balance. So it would be really weird for me to pay directly for gasoline or even food, I generally CC that, and then send one very large "push" bill payment from the bank to the CC per month.
So Americans mostly do electronic pushes, pulls, and aggregators online, although we do have checks for non-electronic people.
I write a check to the school district for book + other fees, like $50 per year per kid. Technically its illegal to demand payment for free public schools but the PTO spends it on "free" after school activities so its kinda a donation and I think we get our monies worth. Also my wife buys an organic grown fraction of a cow from a local farmer every year or so, and the butcher shop takes electronic for processing but the old school farmer still does paper checks. Some tradesmen (plumber, carpenter) only take old fashioned paper checks, although that is very rapidly changing as they all get smart phones. I switched to a CU probably 7 to 10 years ago and since then I've written a couple dozen checks total, I'd have to find it to verify because I keep it locked up.
Some really old people, like non-computational, obviously write a lot of checks. I have an elderly uncle who had to pay an extra bank fee for writing more than two dozen a month, which seems weird to me.
Poor people with serious legal / financial issues are unbanked and mostly go pure cash. There's a whole industry grown around ripping off those people when they try to interface semi-legally with the financial system. This is probably less than 1/4 the population. Like if you owe child support or a court judgment, all your electronic money will simply disappear, but not your cash, leading to some peculiar behaviors.
Wow, this sounds insane. Here in the UK they have recently improved the electronic transfer system so that money appears in the other account (clears) in 2 hours or less (practically instantly for accounts at the same Bank). I do not know whether large bank transfers using BACS or CHAPS incur a fee but most people happily send money to other people electronically as few people have cheques anymore. The banks seem to have stopped issuing cheque books, and no shop that I know of will accept them, so it effectively killed cheques. The older generation probably struggle without them.
They have recently pushed out the mobile payment system called PAYM (someone obviously got paid a fortune to think of pay + mobile, eg. pay + m ... . . paym) where you can send money to anyone else with their mobile number. They need to have registered their mobile number with their bank for this to work (and not all banks have signed up to the system) but it should make sending money really easy.
People seem to use Paypal a lot for sending money around but they're greedy with fees so I am keen for this PAYM system.
