I initiated a discussion in a Facebook editors’ group earlier this week, prompted by someone in the US saying they wanted to move away from clients paying them by cheque (‘check’ in the US). Because I haven’t written a cheque in all the years I’ve been in business (25 this year!) and have rarely received a cheque as payment (the last was in about 2000?), that got me wondering about how people in other countries send/receive money WITHIN their own country. For international payments, most seem to use Wise or PayPal.
Almost 100 editors responded. I’ve summarised their responses below, alphabetically by country.
Australia
- Bank-to-bank transfers (also known as electronic funds transfer [EFT]). Payment is typically instantaneous. No extra fees other than normal transaction fees, which vary depending on the bank and the type of account.
- A more recent option in the Australian banking system is PayID, where we can link an email address or mobile phone number to our bank account and someone only needs that to pay us—no bank account details required (I doubt I’d use this for my business, but can see it being a good personal option when out with a group at a restaurant and someone says they’ll pay their share later!)
- Australia will phase out cheques fully by 2030—currently, cheques are used for less than 0.5% of payments.
Canada
- e-transfer through the Interac system (started in 2003 and jointly owned by participating banks). You can send funds to anyone’s email address and the recipient follows a link in the email, logs in to their account, and deposits the funds (you can set up autodeposit for that last step). The same system allows access to your account from any ATM. Interac now accounts for more transactions than cash.
- Direct deposit [into bank account] for payments from companies and organizations. And there’s a no-fee bank transfer system in Canada that businesses often use for one-off payments from customers.
- A few corporations (both US and Canadian) still pay me by cheque.
France
- Many continue to use cheques.
Germany
- American living in Germany: In the EU you can transfer bank-to-bank for free (transfer is usually next day or up to 3 days). Nobody uses checks as far as I know.
Ireland
- Bank to bank transfer, with no charge. Same between here and Britain.
Israel
- Bank transfers, phone-based apps that may not be known elsewhere (e.g. Paybox). We stopped using checks for most person-to-person transactions quite a bit before the US did, I believe.
- Everyone pays by bank-to-bank transfer. If they use the same bank I do, then the transfer is immediate. If a different banking company, there’s a delay of 1 to 2 business days.
Malaysia
- Bank transfer, 100% of the time.
New Zealand
- Bank transfer; New Zealand stopped using cheques in 2021.
Pakistan
- I usually get paid through Payoneer, which works like PayPal. Some clients do bank transfers to my bank account but the banks are sometimes suspicious so they need proof of our contract or something. I don’t really have many local clients but if I do they use mobile wallets like easypaisa or jazzcash.
Portugal
- I don’t work with local clients, but here in Portugal we have an app called MB WAY that allows payments to be made using the other person’s phone number. They also need to have the app installed. The most common payment method between businesses is bank transfers. We generally don’t use checks.
Singapore
- Mostly via bank to bank transfers, or payment through the banks’ phone apps.
South Africa
- Bank transfers (EFT); South Africa jettisoned cheques in 2021. A major shopping group just announced that they are now cash-free. Here we tap a card or use an app.
United Kingdom
- Bank to bank transfers are free if sending to other UK accounts, and sometimes European accounts. When I invoice UK clients, I have the option of B2B transfer or debit/credit card payment through my website.
- Cheques are pretty much obsolete. Even tradesmen expect a bank transfer.
United States
The responses from the US showed a wide variety of methods being used. Bank to bank transfers, while they exist, don’t seem to be widely used and certainly don’t seem to be as easy to use as in other countries (this comment was common from those Americans who’ve lived in and experienced the systems in other countries). Cheques are still used quite a lot, although their usage is reducing as younger generations embrace electronic methods. Some comments:
- Zelle (not an app) is a common bank to bank transfer method in the US, but some US banks aren’t using it yet
- I get about half my payments by check, a quarter through direct deposit, and a quarter through apps like PayPal and Zelle or via credit card.
- I still get checks from time to time. I prefer to be paid with PayPal, Venmo (owned by PayPal and more popular with the younger set) or Zelle (a free bank to bank transfer that apparently some US banks don’t have yet).
- Bank transfer in the US is also called direct deposit, ACH or EFT and I’m not sure why it’s not as popular as in other countries. If I pay someone via ACH it usually takes one business day for the money to be deposited in their account. We also have apps that make the connection for us and are instantaneous, like Zelle or CashApp, but those aren’t used for business as often. I’m still surprised when businesses accept (or prefer) checks, but it’s not uncommon, especially for local service providers like a plumber, housekeeper or yard maintenance company.
- ACH is not the same as a bank transfer in other countries. It’s far more complicated and takes a lot longer. With bank transfers elsewhere, anyone with a bank account can transfer to any bank account they have details for and it’s instant because there is no third party involved. There’s also no signing up or fees.
- American but lived in the UK for years: My parents still use checks to pay bills and occasionally at the supermarket though I think that practice is finally dying. Bank to bank isn’t easy or cheap though.
- By check (both publishers and independent clients, though becoming less common), direct deposit (larger clients), PayPal, Venmo (independent clients). I still use personal checks, though less than I used to.
- A couple of my clients pay by check, but most use ACH direct deposit.
- Been paid by a number of universities and some publishers this last year—majority by check, a few by ACH.
- I get paid in all sorts of ways: checks, credit card or debit card (using square.com), PayPal, Wise, Venmo, and even CashApp. Bank to bank transfers only work if the client has access to Zelle; otherwise, the bank fee is problematic.
- Most clients are companies/publishers. About a third use PayPal, my biggest client mails me checks in response to my emailed invoices (they do ACH for staff but not contractors as a matter of policy), and the others use ACH. If I worked with individuals instead of organizations, I imagine there might be more checks.
- American living in the UK: US banks do not allow bank transfers like they do here in the UK. When I tell Americans that, they try to tell me about all the third-party apps that allow them to send and receive money.
- We can transfer. EFTs aren’t unfamiliar. It just wasn’t considered safe for a while, or at least I never thought it was. But I have done some bank transfers. It’s not disallowed. Just not as common.
- Most bank websites have the option online to “transfer to another bank,” and you just need the other bank account’s information to do that.
Other comments
- Bank account details:
- [American] This could be wildly dated or generally inaccurate, but I have this vague sense that I was taught that keeping your bank account details secret is important because if people have them they can withdraw money, not just deposit it? like that they could impersonate you, I guess? if that’s a thing in the US, I’m unclear about why it isn’t elsewhere.
- [American] That’s how I grew up as well. What you describe is accurate as far as I know, unless things have changed in the last 5-6 years. Banks in the US are less security conscious than those in the UK and Europe, whose systems allow for safer transactions.
- [American] I grew up in the US and was not taught that. It doesn’t make sense to me because our checks all had our account information printed on them. Every check had the bank routing number and account number on it as well as an authorized signature. Things have changed now with check washing and such, but someone would need much more than our account number to remove funds from our account.
- [American] It’s true, we treated our bank account number like some secret private thing, but it’s printed right on every check we send anyone. Nobody can do anything with just that, but I didn’t realize that until relatively recently from discussions in groups like this.
- [Australian] My bank account number has nothing to do with my personal bank identification number nor password nor two factor authentication code (when used, this 2FA code lasts for no more than 5 minutes). People can transfer money into it but they’d need a lot more info to deduct from it.
- Miscellaneous:
- Several friends work in banking and they all say the US banking system is shockingly behind. Apparently, there are too many small, independent banks (a concept foreign to Canadians).
- This conversation is a good example of how Americans with no experience with the convenience of bank transfers as done in other countries don’t really understand how much better it is.
- I had a cheque for a job recently. Thankfully the banking app on my phone allowed me to pay it in from home without a problem. Technology can be wonderful!
- I was in Australia recently and had to explain checks to a 13-year-old. “You write how much you owe a person on a piece of paper and give it to them. Then they take that paper to their bank, their bank gives them the money (maybe), then their bank gets the money from your bank.” He seemed (rightly) skeptical.
- I solely use PayPal for the security of it. I’m a business lawyer by day, and I won’t use anything that doesn’t automatically come with some sense of protection and a good paper trail.
- When people in countries with more developed banking systems [than the US] say “bank transfer” it means something super simple and super fast, often within seconds (we call it e-transfer in Canada). I use it to pay hairdressers, tradespeople, my neighbour when I buy honey from her, to send money to family, etc. It’s basically like sending an email with money. The US, unfortunately, has an unwieldy banking system.
My final summary to contributors to the discussion
Thank you all for your interesting comments. I’ve travelled a lot to the US (except in the last 5 years, thanks COVID) and it’s always baffled me why so many people used cheques to pay for almost everything not paid for by cash or credit card. I remember explaining to someone in the US about bank transfers and they were equally surprised that I could transfer money to someone else’s account without using a cheque.
From the comments, it seems that a lot of countries use direct bank-to-bank transfers and/or email/phone number to transfer money within their own country. The US seems to be an exception, and while there are now some mechanisms to do these things, it appears they aren’t universally known, used, or implemented by the banking system, but are available through 3rd party vendors. Some countries have already phased out cheques, while others are in the process of doing so. And in Australia more and more venues (such as bars and restaurants) are cashless too (I think that transition was accelerated by the measures taken during COVID lockdowns). Even though I didn’t ask about international transfers, it seems Wise and PayPal are the main services used.
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