7 ms·

It's pretty mental that the US still uses cheques for paying employees. I'm 26 and have never been given a cheque and all payments have been electronic.

Keverw 7y ago
Yeah, a lot of places offer direct deposit. Then some employers even offer like some type of prepaid debit cards with your pay loaded on it, I guess for the unbanked.
slovenlyrobot 7y ago
I'm 35 (I think!), the last time I received a cheque in the UK was 2001
- Normal_gaussian 7y ago
  At 25 the only check I receive is worth £24.82 from the second settlement (money held "in case") of a will. I tried getting them to just BACS it like the first settlement... but they won't BACS less than £25 They also refuse cash and donation as a settlement, so in the spirit of the deceased I don't cash it, and a new one arrives every six months. I guess I'll find know the Solicitor has retired when the cheque stops coming...
- walshemj 7y ago
  I get dividend cheques twice a year from some shares I hold and about four expenses cheques
- Matthias247 7y ago
  Little bit older. Never in my whole life used a cheque in Germany. Then I moved to canada, and learned it's a common thing here. Salaries are by default paid with cheques, people pay their rent with them, etc. I was genuinely surprised when I opened a bank account and they wanted to give me cheques (and even charge for them!). I however got around using them - things can also be paid electronically by setting up direct deposit. It however always feels like the non-standard way.
burnte 7y ago
The vast majority of paychecks are electronic transfers. these weren't physical checks that were stolen, it was a diversion of digital transfers.
- Operyl 7y ago
  Except that as a result of that, the people were actually debited their entire paycheck, or even two! So it was stolen in this case, even if temporarily.
michannne 7y ago
A cashier's check was required as my first payment for an apartment, every payment after can be done through online. I still don't understand what the purpose of the initial payment was.
- lostgame 7y ago
  Perhaps some form of bizarre ID verification, or the simplicity of handing that cheque back to you at the end (assuming it’s a security deposit?)
- wiredfool 7y ago
  A cashiers check is known good funds, online transfers aren’t.
- deleted 7y ago
  [deleted]
- yardie 7y ago
  A cashiers check is cut by the bank and not you. You pay the bank, bank writes the check, landlord gets a check they draw from the bank, not your account. It’s very hard to reverse cashiers check so the chance of it bouncing is extremely low.
tlrobinson 7y ago
I'm in the US and haven't been paid (payroll) by check in at least a decade. Also MyPayrollHR did have direct deposit: > This communique came after employees at companies that depend on MyPayrollHR to receive direct deposits of their bi-weekly payroll payments discovered their bank accounts were instead debited for the amounts they would normally expect to accrue in a given pay period. https://krebsonsecurity.com/2019/09/ny-payroll-company-vanishes-with-35-million/ https://krebsonsecurity.com/2019/09/ny-payroll-company-vanis...
nwallin 7y ago
By and large, the US doesn't use physical checks for paying employees. (we use the word "paycheck" colloquially) It's required by (possibly state?) law that companies allow direct deposit if you so choose. But it's an extra step the employee has to take, and many don't. It's technical debt for the employer to just give the employee a physical check and say "it's your problem now" than to pester them to provide their bank account information. My first paycheck from my first summer job in high school was a check, and my severance from my last company was by check. Other than that, it's all been electronic. My previous three jobs don't allow regular paychecks by physical check, you have to have direct deposit. Physical paychecks are definitely the exception, not the norm. There's also a lot of resistance to electronic banking in... certain circles. I'm not sure what they think "normal" banking when you speak to an actual teller is.
- DINKDINK 7y ago
  >There's also a lot of resistance to electronic banking in... certain circles In the USA as of 2017, 8.4 million households (6.5% of households) don't have any bank account. [1] [1] https://www.fdic.gov/householdsurvey/ https://www.fdic.gov/householdsurvey/
  - perl4ever 7y ago
    Undocumented immigrants are about 5% of the workforce, so that could account for most of them.
- mrguyorama 7y ago
  A lot of unbanked people are not crazy or freedom nuts or anything, but just dirt freaking poor. It costs a lot of money to run a bank account with only a few hundred dollars in it. Add to that the fact that many banks purposely reorder transactions to force you to take as many overdraft fees as possible, banking for those living paycheck to paycheck is not cheap
  - pitaj 7y ago
    > A lot of unbanked people are not crazy or freedom nuts or anything, but just dirt freaking poor. It costs a lot of money to run a bank account with only a few hundred dollars in it. Where? Everywhere I've banked offered checking accounts for completely free with no minimum balance, and I know many credit unions operate this way. If you're paying money to your bank, stop it. > Add to that the fact that many banks purposely reorder transactions to force you to take as many overdraft fees as possible, banking for those living paycheck to paycheck is not cheap This is really scummy but many banks allow you to, for debit cards, deny the transaction instead of overdrafting. That won't help with bounced checks or electronic transfers but it can make a big difference.
agoodthrowaway 7y ago
Most people get paid electronically. A lot of things people don’t realize is that at 330M+ people, the US has a lot of legacy systems due to the sheer size of the population.
- yardie 7y ago
  I don’t buy this argument at all. The EU is 500mm people across 24 different countries, speaking many languages, and I had no problem paying and receiving money from anyone in any of those countries. US banking is a decrepit mess because the treasury allows it to be.
  - xienze 7y ago
    > and I had no problem paying and receiving money from anyone in any of those countries. And no one in the US has problems sending and receiving money from anyone else in the US either... The parent's point is that legacy systems still exist in the US, as I'm sure they do in the EU. That doesn't mean that getting paid by a paper check is particularly common for regular workers. The vast majority of people are paid electronically. No one likes dealing with checks and for the most part no one really has to. The only times I ever do that is when I'm paying a contractor many thousands of dollars for e.g., work on my house. Usually those guys are older and self-employed, and either don't know how to accept money electronically or don't want to because of fees (and I don't blame them). In those instances I get a cashier's check made. That's the only time I have to deal with it. There are of course instances where an employer might not provide direct deposit because they find the added expense too much to bear (as another poster pointed out). We're not living 50 years in the past, as you might imagine. Checks are not particularly common.
    - Tuna-Fish 7y ago
      > The parent's point is that legacy systems still exist in the US, as I'm sure they do in the EU. And the actual point is that no, they don't, they were cleared away because their existence is a pox on everyone. Having seen both systems upclose, for the average consumer the European banking system is about a hundred years in the future from the American one, which is a steaming hot cesspit of legacy systems and banking institutions that spend all their time figuring out ways to milk more money out of consumers. Case in point: > or don't want to because of fees It's not okay to charge people fees to send or receive money. (Technically, European banks still can do that, but since the EU has forced all banks to accept transfers from each other using a common system, and that all money transfer are executed as "shared fees" where the sender pays the fee to their institution and the receiver pays the fee to theirs, free and open competition has driven the price of sending and receiving money to 0€.)
orky56 7y ago
We have a small business and print checks manually for employees. With 50+ employees and majority of them working less than 10 hours per pay period, the per employee cost to use a direct deposit/payroll service is cost prohibitive. With our employees being typically over 40, it's been rare to even have someone request direct deposit. Just thought I'd share a different perspective than the typical HN crowd.
- matco11 7y ago
  The issue is that the cost of direct deposits should be lower, so that they can be more widely adopted
- sidlls 7y ago
  Direct deposit has been a thing for literally decades. Someone over 40 has likely had direct deposit as an option their entire working life.
  - ghaff 7y ago
    Yeah. I've worked for many thousand person employers down to those with less than 10. I haven't had physical payroll checks to deposit since at least the mid-eighties. (Probably longer but I just don't remember.) Probably took longer for all expense etc. checks to go direct though as they're often through a different system.
- GhettoMaestro 7y ago
  Never dealt with finance/payroll. What is the typical per-user cost associated with direct deposit? I figured being as pervasive as it is that the cost was negligible.
  - orky56 7y ago
    We also have high turnover so maintaining direct deposit info doesn't make sense either. It ends up being around $10/mo per employee for a low-end payroll service which includes direct deposit/year end taxes/forms/etc.
anigbrowl 7y ago
It's just an idiom. When you hear a financier talking about being in cash it doesn't mean they have a giant stash of currency notes piled up in the corner of their office.
deleted 7y ago
[deleted]
novalis78 7y ago
The (retail) US financial system is archaic and competes with Healthcare in regulation creep and backwardness. The first time I ever saw a check in my life was in the US.
- Johnny555 7y ago
  Once I was buying a house, and my bank would write a cashier's check for free, but charged $50 for a wire transfer. So I walked a $300K check from my bank two blocks to my escrow company to save the $50. The check must have been more expensive for everyone to handle (even at the bank, they had to wait for a manager to operate the special "check typewriter" - not everyone was allowed to operate it), but for whatever reason, it was "free".
  - tonyarkles 7y ago
    When we bought our house, we also went the cashier's cheque route for the downpayment, but had a tremendous surprise: the cheque bounced when the lawyers tried to deposit it! I called the bank, and a manager met me at the door. He couldn't figure out what happened, but they re-issued the cheque and it all went through...
    - novalis78 7y ago
      I once tried to speed up a transaction and got a cashiers check. Only to find out that a hold was placed on it because it slightly was more than typical for the account. The hold was for 7 business days which turned out to be 2 weeks (it was a Friday). Of course they couldn’t reverse the hold not giving me back the check. I said ‘don’t you think people will start walking around with cash if you keep doing this’ - they said yes, cash would be faster. Meanwhile spacex is building starship. And Suntrusts wire fees are $60 last time checked and take an hour to complete (in the branch because you pay extra to have that as an online feature). Also, did you ever try to amend a wire transfer because of a misspelled letter? That’s a procedure. What a waste of capital in a digital age.
astura 7y ago
They don't (usually), you usually set up direct deposit to get your paycheck deposited into your bank account electronically. In fact, my employer actually requires direct deposit - it's the only way they will pay you. Also, the government no longer sends out physical social security checks, they stopped doing that like five years ago.
eli_gottlieb 7y ago
Usually, you fill out a form giving direct deposit information, and then they give you a paper check for your very first payment. Once you deposit that, verifying your account information, all further payments take place electronically.
lioeters 7y ago
I remember 10~ years ago when I worked in the U.S., every month I'd get an envelope with a check. I'd stop by my bank on my bike ride home to deposit it. Now that I think about it, not sure why it couldn't have been done bank-to-bank directly.. Possibly there was an associated cost that the employer couldn't be bothered to cover.
- tbyehl 7y ago
  ~21 years ago I worked for a small company who didn't offer direct deposit because of the cashflow implications -- having to transfer money to the payroll processing company several days in advance -- and often we'd be handed our physical checks before they'd put the money in their payroll account, so if I'd walk over to their bank at lunch they often would not cash them. All of which is disturbing to me now but I was young and dumb and didn't stay with them long. (A few years earlier, I had an after-school job at K-Mart and they paid everyone with actual cash in an envelope!)
cbhl 7y ago
Does Japan still give people cash in envelopes? Or are they electronic now?

Keverw 7y ago

Yeah, a lot of places offer direct deposit. Then some employers even offer like some type of prepaid debit cards with your pay loaded on it, I guess for the unbanked.

slovenlyrobot 7y ago

I'm 35 (I think!), the last time I received a cheque in the UK was 2001

Normal_gaussian 7y ago
At 25 the only check I receive is worth £24.82 from the second settlement (money held "in case") of a will. I tried getting them to just BACS it like the first settlement... but they won't BACS less than £25 They also refuse cash and donation as a settlement, so in the spirit of the deceased I don't cash it, and a new one arrives every six months. I guess I'll find know the Solicitor has retired when the cheque stops coming...
walshemj 7y ago
I get dividend cheques twice a year from some shares I hold and about four expenses cheques
Matthias247 7y ago
Little bit older. Never in my whole life used a cheque in Germany. Then I moved to canada, and learned it's a common thing here. Salaries are by default paid with cheques, people pay their rent with them, etc. I was genuinely surprised when I opened a bank account and they wanted to give me cheques (and even charge for them!). I however got around using them - things can also be paid electronically by setting up direct deposit. It however always feels like the non-standard way.

burnte 7y ago

The vast majority of paychecks are electronic transfers. these weren't physical checks that were stolen, it was a diversion of digital transfers.

Operyl 7y ago
Except that as a result of that, the people were actually debited their entire paycheck, or even two! So it was stolen in this case, even if temporarily.

michannne 7y ago

A cashier's check was required as my first payment for an apartment, every payment after can be done through online. I still don't understand what the purpose of the initial payment was.

lostgame 7y ago
Perhaps some form of bizarre ID verification, or the simplicity of handing that cheque back to you at the end (assuming it’s a security deposit?)
wiredfool 7y ago
A cashiers check is known good funds, online transfers aren’t.
deleted 7y ago
[deleted]
yardie 7y ago
A cashiers check is cut by the bank and not you. You pay the bank, bank writes the check, landlord gets a check they draw from the bank, not your account. It’s very hard to reverse cashiers check so the chance of it bouncing is extremely low.

tlrobinson 7y ago

I'm in the US and haven't been paid (payroll) by check in at least a decade. Also MyPayrollHR did have direct deposit: > This communique came after employees at companies that depend on MyPayrollHR to receive direct deposits of their bi-weekly payroll payments discovered their bank accounts were instead debited for the amounts they would normally expect to accrue in a given pay period. https://krebsonsecurity.com/2019/09/ny-payroll-company-vanishes-with-35-million/ https://krebsonsecurity.com/2019/09/ny-payroll-company-vanis...

nwallin 7y ago

By and large, the US doesn't use physical checks for paying employees. (we use the word "paycheck" colloquially) It's required by (possibly state?) law that companies allow direct deposit if you so choose. But it's an extra step the employee has to take, and many don't. It's technical debt for the employer to just give the employee a physical check and say "it's your problem now" than to pester them to provide their bank account information. My first paycheck from my first summer job in high school was a check, and my severance from my last company was by check. Other than that, it's all been electronic. My previous three jobs don't allow regular paychecks by physical check, you have to have direct deposit. Physical paychecks are definitely the exception, not the norm. There's also a lot of resistance to electronic banking in... certain circles. I'm not sure what they think "normal" banking when you speak to an actual teller is.

DINKDINK 7y ago
>There's also a lot of resistance to electronic banking in... certain circles In the USA as of 2017, 8.4 million households (6.5% of households) don't have any bank account. [1] [1] https://www.fdic.gov/householdsurvey/ https://www.fdic.gov/householdsurvey/
- perl4ever 7y ago
  Undocumented immigrants are about 5% of the workforce, so that could account for most of them.
mrguyorama 7y ago
A lot of unbanked people are not crazy or freedom nuts or anything, but just dirt freaking poor. It costs a lot of money to run a bank account with only a few hundred dollars in it. Add to that the fact that many banks purposely reorder transactions to force you to take as many overdraft fees as possible, banking for those living paycheck to paycheck is not cheap
- pitaj 7y ago
  > A lot of unbanked people are not crazy or freedom nuts or anything, but just dirt freaking poor. It costs a lot of money to run a bank account with only a few hundred dollars in it. Where? Everywhere I've banked offered checking accounts for completely free with no minimum balance, and I know many credit unions operate this way. If you're paying money to your bank, stop it. > Add to that the fact that many banks purposely reorder transactions to force you to take as many overdraft fees as possible, banking for those living paycheck to paycheck is not cheap This is really scummy but many banks allow you to, for debit cards, deny the transaction instead of overdrafting. That won't help with bounced checks or electronic transfers but it can make a big difference.

agoodthrowaway 7y ago

Most people get paid electronically. A lot of things people don’t realize is that at 330M+ people, the US has a lot of legacy systems due to the sheer size of the population.

yardie 7y ago
I don’t buy this argument at all. The EU is 500mm people across 24 different countries, speaking many languages, and I had no problem paying and receiving money from anyone in any of those countries. US banking is a decrepit mess because the treasury allows it to be.
- xienze 7y ago
  > and I had no problem paying and receiving money from anyone in any of those countries. And no one in the US has problems sending and receiving money from anyone else in the US either... The parent's point is that legacy systems still exist in the US, as I'm sure they do in the EU. That doesn't mean that getting paid by a paper check is particularly common for regular workers. The vast majority of people are paid electronically. No one likes dealing with checks and for the most part no one really has to. The only times I ever do that is when I'm paying a contractor many thousands of dollars for e.g., work on my house. Usually those guys are older and self-employed, and either don't know how to accept money electronically or don't want to because of fees (and I don't blame them). In those instances I get a cashier's check made. That's the only time I have to deal with it. There are of course instances where an employer might not provide direct deposit because they find the added expense too much to bear (as another poster pointed out). We're not living 50 years in the past, as you might imagine. Checks are not particularly common.
  - Tuna-Fish 7y ago
    > The parent's point is that legacy systems still exist in the US, as I'm sure they do in the EU. And the actual point is that no, they don't, they were cleared away because their existence is a pox on everyone. Having seen both systems upclose, for the average consumer the European banking system is about a hundred years in the future from the American one, which is a steaming hot cesspit of legacy systems and banking institutions that spend all their time figuring out ways to milk more money out of consumers. Case in point: > or don't want to because of fees It's not okay to charge people fees to send or receive money. (Technically, European banks still can do that, but since the EU has forced all banks to accept transfers from each other using a common system, and that all money transfer are executed as "shared fees" where the sender pays the fee to their institution and the receiver pays the fee to theirs, free and open competition has driven the price of sending and receiving money to 0€.)

orky56 7y ago

We have a small business and print checks manually for employees. With 50+ employees and majority of them working less than 10 hours per pay period, the per employee cost to use a direct deposit/payroll service is cost prohibitive. With our employees being typically over 40, it's been rare to even have someone request direct deposit. Just thought I'd share a different perspective than the typical HN crowd.

matco11 7y ago
The issue is that the cost of direct deposits should be lower, so that they can be more widely adopted
sidlls 7y ago
Direct deposit has been a thing for literally decades. Someone over 40 has likely had direct deposit as an option their entire working life.
- ghaff 7y ago
  Yeah. I've worked for many thousand person employers down to those with less than 10. I haven't had physical payroll checks to deposit since at least the mid-eighties. (Probably longer but I just don't remember.) Probably took longer for all expense etc. checks to go direct though as they're often through a different system.
GhettoMaestro 7y ago
Never dealt with finance/payroll. What is the typical per-user cost associated with direct deposit? I figured being as pervasive as it is that the cost was negligible.
- orky56 7y ago
  We also have high turnover so maintaining direct deposit info doesn't make sense either. It ends up being around $10/mo per employee for a low-end payroll service which includes direct deposit/year end taxes/forms/etc.

anigbrowl 7y ago

It's just an idiom. When you hear a financier talking about being in cash it doesn't mean they have a giant stash of currency notes piled up in the corner of their office.

deleted 7y ago

[deleted]

novalis78 7y ago

The (retail) US financial system is archaic and competes with Healthcare in regulation creep and backwardness. The first time I ever saw a check in my life was in the US.

Johnny555 7y ago
Once I was buying a house, and my bank would write a cashier's check for free, but charged $50 for a wire transfer. So I walked a $300K check from my bank two blocks to my escrow company to save the $50. The check must have been more expensive for everyone to handle (even at the bank, they had to wait for a manager to operate the special "check typewriter" - not everyone was allowed to operate it), but for whatever reason, it was "free".
- tonyarkles 7y ago
  When we bought our house, we also went the cashier's cheque route for the downpayment, but had a tremendous surprise: the cheque bounced when the lawyers tried to deposit it! I called the bank, and a manager met me at the door. He couldn't figure out what happened, but they re-issued the cheque and it all went through...
  - novalis78 7y ago
    I once tried to speed up a transaction and got a cashiers check. Only to find out that a hold was placed on it because it slightly was more than typical for the account. The hold was for 7 business days which turned out to be 2 weeks (it was a Friday). Of course they couldn’t reverse the hold not giving me back the check. I said ‘don’t you think people will start walking around with cash if you keep doing this’ - they said yes, cash would be faster. Meanwhile spacex is building starship. And Suntrusts wire fees are $60 last time checked and take an hour to complete (in the branch because you pay extra to have that as an online feature). Also, did you ever try to amend a wire transfer because of a misspelled letter? That’s a procedure. What a waste of capital in a digital age.

astura 7y ago

They don't (usually), you usually set up direct deposit to get your paycheck deposited into your bank account electronically. In fact, my employer actually requires direct deposit - it's the only way they will pay you. Also, the government no longer sends out physical social security checks, they stopped doing that like five years ago.

eli_gottlieb 7y ago

Usually, you fill out a form giving direct deposit information, and then they give you a paper check for your very first payment. Once you deposit that, verifying your account information, all further payments take place electronically.

lioeters 7y ago

I remember 10~ years ago when I worked in the U.S., every month I'd get an envelope with a check. I'd stop by my bank on my bike ride home to deposit it. Now that I think about it, not sure why it couldn't have been done bank-to-bank directly.. Possibly there was an associated cost that the employer couldn't be bothered to cover.

tbyehl 7y ago
~21 years ago I worked for a small company who didn't offer direct deposit because of the cashflow implications -- having to transfer money to the payroll processing company several days in advance -- and often we'd be handed our physical checks before they'd put the money in their payroll account, so if I'd walk over to their bank at lunch they often would not cash them. All of which is disturbing to me now but I was young and dumb and didn't stay with them long. (A few years earlier, I had an after-school job at K-Mart and they paid everyone with actual cash in an envelope!)

cbhl 7y ago

Does Japan still give people cash in envelopes? Or are they electronic now?