Sending Money: Comparison Shopping Not for Everyone
Walmart’s disruptive move into the money-transfer niche is attracting plenty of attention from the media.
However, in the payments sector, there remains a conservative streak about the way money can be transferred reliably and safely.
Those with that mindset stick with sending money through their checking account at their own financial institution, be it a bank or credit union.
And that’s that.
They wouldn’t consider comparison shopping for a cheaper, more convenient and faster deal. That default trumps marketplace developments. Walmart can promote its innovation brilliantly.
Users fall into two categories of use cases.
As example use cases, one family will seek out the service on a one-time basis. Their son needs $240 to take advantage of a bargain on purchasing a horse for riding. The owner will only hold the offer open for 24 hours. The other type of user makes regular payments. It could be to their family overseas. Those funds would be taken from their paychecks which their employer deposits directly into their account.
Both kinds of transactions have a fee for the sender. International transfers costs more than domestic. There may or may not be a fee for the recipient. That should be found out ahead of time from the participating financial institution. If there is and the recipient can’t afford it, then that should be factored into the amount transferred. How long the process takes varies. Part of this will be time differences, both domestically and internationally.
The first step in establishing this service is finding out if their financial institution, bank or credit union, offers it. Not all do. Also, some which do only provide this service during certain hours. If the service is provided, here are two of the ways in which the money can be wired from a checking account.
Brick and Mortar Account
There is the option of sending money from a traditional checking account housed in the brick and mortar location of the financial institution. For the first time transfer of funds it will likely require the sender to appear in person. After that initial process, transactions can be handled by phone or online. Financial institutions are cautious about possible money laundering. Although there is no limit on the amount sent or the frequency, significant sums will trigger scrutiny.
The necessary documentation includes official identification and proof the checking account is their own. In addition, they have to furnish the unique transit routing code for the recipient’s financial institution and the number for the recipient’s own account. This should be verified since wrong numbers will delay the transfer and cause endless frustration.
The last step is arranging for confirmation that the funds have been received. This can be done through the sender’s financial institution or by directly contacting the designated recipient. If that hasn’t happened, the first line of inquiry is to check the numbers for the recipient’s financial institution and specific account.
Online Accounts
When the sender has an online checking account, some financial institutions allow the complete electronic transfer of funds. It goes by the general name of “personal payment service.” However, financial institutions will give it a branded title.
To activate the process, senders have to register. After that they can use a personal computer, tablet or smartphone to send money to anyone in the U.S. who has an account with a financial institution, a mobile phone or an email address. They do not have to go to the bank or even swing by an ATM. There is a fee. But it tends to be lower than that billed at brick and mortar financial institutions.
Some people change their approach to financial transactions at a glacial pace. That’s why these two are still options that are regularly used. Financial literacy isn’t just a matter of access to information. Often obstacles to more affordable, better service are based in both habit and rigid notions about security.