
Stripe can make automatic LLCs but a wire transfer from Citi nearly ended me - awinter-py
https://abe-winter.github.io/2020/01/14/self-serve.html
======
mdorazio
The author here seems to have a pretty shallow understanding of how banking
infrastructure actually works (ex. ACH vs. wire vs. direct deposit), which is
the root of a lot of these complaints. The other misconception is why banks
continue to operate this way, which I personally believe comes down to
prioritizing risk aversion and fraud resistance over other attributes. If
you've never had to deal with large amounts of fraud as a business operator, a
lot of things banks do (like require in-person verifications/transactions)
probably won't make much sense or will seem really antiquated.

Edit: also worth noting is that a significant portion of a large bank's
customers are over middle age and still _want_ high-touch in-person and phone
interactions in a financial institution.

~~~
avianlyric
Yes this looks like a classic case of payment schemes not working anything
like how people think they work (or even working in a sane way).

With regards to the credit card payment, my guess would be that it went over a
dual message system. Which means one message reserves the money, and a second
one moves it.

This is important because the first message will generally cause the payment
to appear on your statement, and reduce your “available balance”. But doesn’t
impact your actual balance. The money’s still yours so you earn interest on
it, but you can’t touch it.

When the second message turns up the money moves and the transaction completes
(sometimes called “posting” or “clearing” or “presenting”).

However if the second message never turns up (or a reversal is sent instead)
then the money doesn’t move, it’s just un-reserved.

How banks represent this un-reversal is usually very confusing. Either the
transaction simply disappears or a back dated transaction appears. This is
because from the banks perspective the transaction never happened (it didn’t
present, so no money moved and thus no transaction).

ACH is also a very strange payment scheme. I believe that debit ACH messages
simply pull money from a bank account. The bank can’t stop this money movement
(they always to have pay the bill or get disconnected from the ACH network).
However in the case of fraud, your bank can send a message and claw the money
back within a certain time span.

All of this sounds ridiculous and is a result of history. But replacing it
would require hundreds or thousands of banks to agree a new standard, and
there’s a good XKCD about new standards.

~~~
Animats
This is really a user interface problem. Payment systems have distributed
state machines, but the state isn't exposed to the customer and the parties
may not be in sync. Banking is a "consistent eventually" system, with delays
in days.

The customer should be able to query "what happened with this transaction"
from their account and get back a graphic of what's going on. That information
is useful to fraudsters, though; some states are more vulnerable than others.

~~~
CaptainZapp
_Banking is a "consistent eventually" system, with delays in days._

But why does it work within the same day (or partially virtually instantenous)
with SEPA payments 1) between banks in different European countries?

Why isn't there such a thing as IBAN 2) outside of Europe, which really helps
to make bank transfers seamless and unambiguous?

It sometimes seems that regulation and standardization is not such a bad
thing.

    
    
      1) https://en.wikipedia.org/wiki/Single_Euro_Payments_Area
      2) https://en.wikipedia.org/wiki/International_Bank_Account_Number

------
yellow_lead
This post seems to have all the qualities of a highly popular HN post

* Anti-incumbents in large industry

* Poor customer experience / hit piece

* The new tech company does it much better

* Doesn't try to understand the intracacies of the industry being criticized (wire vs. ACH???)

I know very little about banking and even I know (roughly) the difference
between ACH and wire. My point is not that the author lacks intelligence, just
that they should, as other commenters point out, try to learn about banking
before you're so quick to criticize. I think us programmers suffer from
thinking "this is all too complicated, it could easily be done simpler and
better." That's not always the case and it can help us to understand how the
current system came to be before making these judgements.

~~~
jopsen
Trying to understand the basic primitives of banking is hard.

When I lived in the US I asked my bank for documentation on how their stuff
works.. I've done the same in Denmark.

I've never been able to get authoritative documentation that explains IBAN,
routing/account numbers, transfer types, checks, signatures, credit/debit
cards, etc.

I'm effectively left guessing, my bank can't even tell me if a given kind of
number is secret or security sensitive.

How do you find out? Where is the authoritative documentation? The man page?
The RFC?

~~~
robjan
They are all in various international standards. The specification for IBAN,
for instance, can be found here
[https://www.iso.org/standard/41031.html](https://www.iso.org/standard/41031.html)

------
AndrewStephens
Banking does have some strong regulations around it (with good reason, IMHO)
but I can corroborate the author's intuition about established company's
disdain for self-service customer interactions.

I worked on a product a few years ago that would have turned our sales-led
product into a turn-key hosted solution - just supply your credit-card and go.
It was nearing deployment with 7 figures spent on development when the sales
team got wind of it and immediately killed it.

Although I believe that the product would have been successful and brought in
more money to the company as a whole, it would have gutted the performance
bonuses for the sales team by bypassing a whole department. This could not be
allowed to go live.

That is why real innovation tends to come from newer, smaller companies.

~~~
swagasaurus-rex
This sort of behavior is why people hate the man.

~~~
shawnz
By "the man", do you mean any human with an established life and career that
they are willing to defend in spite of what's best for their employer?

~~~
wayoutthere
Which is why collective bargaining and unions make life better for everyone in
the long run.

~~~
barry-cotter
Those are two different things, with different effects. Unions don’t make
things better for everyone except their members in the long run, or the short
run. They make things better for their members. Unions are economically labour
cartels. Like any other cartel they don’t make the economic pie bigger they
make sure their members get more pie. Pie either goes to consumers in the form
of lower prices, owners in higher profits or workers on higher wages. There’s
no free lunch.

Collective bargaining can actually make things better by reducing labor unrest
and allowing for industry wide coordination such as greater investment in
training or German style Kurzarbeit during periods of low demand, where more
people keep their jobs but their hours are cut.

~~~
wayoutthere
> Like any other cartel they don’t make the economic pie bigger they make sure
> their members get more pie. Pie either goes to consumers in the form of
> lower prices, owners in higher profits or workers on higher wages.

I agree with you completely, except owners currently take a disproportionate
slice of the pie. That is the cause of wealth inequality -- the power of
unions to demand a bigger slice of the pie ultimately impacts the entire
economy. Somewhat paradoxically, unions have much more of an interest in the
long-term survival of the company than shareholders, who often take a short-
term view of profitability. This ultimately leads to better decision-making.

------
hinkley
That Twitter thread touched a nerve. My Credit Union does the same thing. The
Fraud Dept calls me, and if I don't send them to voicemail they'll try to ask
for PII. Like Citi, the number is also not posted on the website, and getting
to them through the phone bank is harder than it should be.

Belonging to the Fraud Department does not mean you're in charge of creating
fraud. If they left "Prevention" out of the title that's because it's implied.
Don't train your customers to fall for phishing attacks, geniuses.

~~~
philipov
In fact, that's likely not your credit union's fraud department. It's probably
the fraud department of the provider of your debit card, which is a different
company.

~~~
hinkley
I'd be very surprised if you're wrong about that.

I think maybe the smartest thing I've ever heard Michael Dell say was related
to pulling the plug on a plan to outsource a tech support unit.

They realized the perverse incentive: if you get paid by the call or incident,
and some calls are cheaper than others, you "benefit" if there are more easy
calls. Even though it's better for the company if you recommend fixing the
root cause of those calls (eg, changing the packaging, documentation, or
design of the product so that people don't have to pick up the phone).

Outsourced Fraud seems like it would have some of the same moral hazards.

~~~
tal8d
Having worked in loss prevention for more than one company, I've only seen
cuts to that budget occur in one of two ways: departments working themselves
out of a job by solving the root cause, or vendors absorbing enough counter-
party risk to make in-house anti-fraud programs a net negative. I can't
imagine any decision-maker outsourcing LP without simultaneously outsourcing
risk, because it would not only be a bad idea - but would be nearly pointless
in even the best potential outcome.

------
tempsy
I completely disagree with this prediction. People have been betting against
large banks for awhile with record investment in challenger banks, but both
Citi and JP Morgan recorded their most profitable quarter in their entire
history this morning. And most of the big banks have actually invested very
heavily in their IT over the past decade.

If you are complaining about their customer service, don't hold your breath
when it comes to startup bank customer service. Chime, the largest funded neo
bank in the US, had a _3 day_ outage in the fall when nothing worked (app,
transactions, ATM) and could not handle the volume of calls or chat requests
at all. People were literally stuck at the grocery store or gas station. That
can't be the future of finance, either.

~~~
lol768
>but both Citi and JP Morgan recorded their most profitable quarter in their
entire history this morning.

Does this say anything about their ability to provide a decent user
experience, or good customer support though?

A few years ago, I had no choice but to use a bank like RBS for my business
account. It was rife with unreasonable fees, a terrible website and a
ridiculous sign-up process. They got my custom because there was no
alternative.

Monzo, Starling and e.g. Tide are doing pretty well here as a result of the
poor show that other banks have been putting on for years.

>If you are complaining about their customer service, don't hold your breath
when it comes to startup bank customer service. Chime, the largest funded neo
bank in the US, had a 3 day outage in the fall when nothing worked (app,
transactions, ATM) and could not handle the volume of calls or chat requests
at all. People were literally stuck at the grocery store or gas station. That
can't be the future of finance, either.

Not all challenger banks are like this, though. I've found Monzo to be much,
much more reliable that the various incumbents in the UK (who don't operate a
status page, don't inform customers properly when things are broken and
_still_ schedule multiple-hour maintenance windows every year when BST
begins/ends).

Customer support can be variable, unfortunately, but I think this is a problem
which has arisen mostly as the bank has grown. It's _still_ better, for me at
least, than a legacy bank.

~~~
tempsy
I assume you're not US-based. I'm a long time Chase customer and am completely
happy with the user experience and customer service. I've found the Citi,
Amex, and Capital One digital experiences to also be good to very good.

The app is fast with an intuitive UI and does the job. If you don't believe me
check out the app store rating.

My understanding is banks outside the US have not invested as heavily in their
IT, and totally understand why challenger banks in other countries might have
more success there. I've used in the HSBC app once, for example, and it's slow
and terrible.

~~~
manacit
I agree with you completely -- I switched from a local CU to Chase because the
experience was, almost uniformly, better:

\- The iOS app, website and other digital tools are significantly better. My
local CU's app is some whitelabeled third party app that barely works

\- With nationwide set of branches, I'm able to get individualized support for
whatever I need in most cities in the USA

\- Chase offers significantly more functionality in general - wiring money via
their website, longer transaction history retention, etc etc

OTOH, my local CU's customer support is horrendous, most of their branches
don't even deal with cash, and if you're outside of the metro they're based
in, you're SOL.

I've experienced the same with Amex, Capital One, etc. They were slow to ramp
up, but their digital properties and tools are excellent in 2020.

------
reaperducer
_On my way over, I noticed that there were a cluster of banks at the corner:
TD, citi, chase, and like one or two others, all within a one block radius in
a relatively high-rent district._

Servicing customers is just an ancillary function of most American bank
branches these days. If you go into one with a problem, in 90% of the
branches, the person helping you can only pick up the phone and dial the same
customer service number you would call on your own, and wait the same amount
of time you would on hold. It's been a very long time since bank branches were
allowed to handle anything but ordinary everyday functions.

The larger reason those branches exist is advertising and branding. You see
the brand everywhere you go in an average day and subconsciously put together,
"$bank is everywhere I go in an average day."

It's similar to how banks used to always be constructed to look like ancient
Greek and Roman temples: To make you think of banks as solid, trustworthy,
safe, and like they'll be around forever.

Now that we all know that banks merge, split, are born, and die like herpes
germs on an infected lip, they scatter branches all over the place to play the
same architectural influence game.

~~~
jeffmould
This is completely the case with Chase. I had several accounts with them over
the years and increasingly had issues (i.e. false positive fraud alerts,
unexplained account locks, etc...). At one point the closest branch was an
over an hour away from my home (I had moved since opening the account). When I
would call the phone support they would tell me I needed to go to the branch.
I would then make the drive to the branch only to have the branch manager call
the same phone support I had. It's so bad that I once was locked out of online
banking for over 6 months on one account and no one, both at the branch level
and corporate level, seemed to know how to fix the issue. When I would go to
the branch they would call support, support would tell them it is a branch
level issue with needing to verify my identity, and the circle continued. I
finally just gave up and closed all my accounts with them.

On the other hand, I have an account at BB&T, and their in branch help is
phenomenal. Most issues are resolved direct in bank without having to call
outside support. Only time they have contacted outside support is when they
don't know the answer to a question. On the other hand, if I call support they
are quick to answer questions and provide detailed explanations.

I have other accounts at another local bank and the same holds true. In branch
support is where it is at.

There is no question that as a bank grows in size and territory the level of
support at the branch level and via phone support seems to degrade rapidly.

~~~
VRay
That's interesting, about 5-6 years ago I had a great experience with Chase in
person. I lived in Seattle but was on a 2 week work trip in Cupertino, and I
forgot most of the contents of my wallet in Seattle. All I had on me was my ID
and a Chase credit card.

The Chase card got shut down due to someone stealing the number, so I was
suddenly in a tight spot.

I went into the local Cupertino branch, and the manager was able to put in a
rush order for a replacement card to be delivered directly to that branch for
me in 48 hours, and then he called my cell to let me know when it arrived. All
in all it worked out great.

On the flip side, I'd had TERRIBLE experiences with Chase when I was in
college years earlier. Just the classic situation of having an account with $3
in it, getting a "minimum balance fee" that pushes me negative, and then a
bunch of chained-together overdraft fees.

------
orf
It seems that without regulation and legislation, if left to its own devices,
the banking industry settles in a terrible equilibrium where you end up using
cheques and signing for card transactions in 2020. This extends deeper into
the technology that underpins the banks.

The USA has a _ridiculous_ amount of banking fraud compared to Europe, more
than an order of magnitude higher for some types.

So, say what you want about government overreach but Europe has legislated
lower fraud rates, better technology and even a banking API for
interoperability. Not to mention fostering a lot of new fintech startups and
challenger banks.

~~~
nerdkid93
Do you have a source for this "_ridiculous_ amount of banking fraud"? I have
seen stats around credit cards that show higher fraud now compared to Europe,
but that's because we were late to the chipped credit card game. To be fair,
until France switched to chipped credit cards, they had higher levels of
fraud. Source: [https://youtu.be/2IksSNiEo2g](https://youtu.be/2IksSNiEo2g)

~~~
orf
The one that comes to mind is the federal reserve report.

[https://www.federalreserve.gov/publications/files/changes-
in...](https://www.federalreserve.gov/publications/files/changes-in-us-
payments-fraud-from-2012-to-2016-20181016.pdf)

Tl;dr

For reference, according to the last ECB report in the EU the total value of
fraudulent transactions from cards issued by SEPA countries was 0.041% of the
total value of transactions (€1.8 billion - That's over 5x less fraud). Only
19% of that was point of sale fraud

$3.6 billion card fraud in the US is point of sale - 10x more than the €342
million point of sale EU fraud.

Overall there is $2.62 billion of counterfeit card fraud, $3.46 billion of
"Fraudulent use of account number" (whatever that is), $810 million "lost or
stolen card" fraud (not an issue with chip and pin), and $360 million
"fraudulent application" fraud.

------
tribune
Ok this is bad but maybe shitty customer service and slow processes are the
price of a functioning financial system. Say what you will about the dated
technology and opaque processes - legacy big banks work, your money is safe
there, and there has not been a significant, system-wide technology error.

Not that things should never change - pieces of this puzzle should be
replaced, but very carefully. A major technology exploit or bug at a major
bank would be apocalyptically bad. The stakes are too high to rapidly entrust
financial infrastructure to whichever fintech startup comes knocking. Consider
the recent case of Robinhood, a big-leaguer as far as fintechs go,
accidentally offering infinite leverage. This was enough to convince me not to
want fintechs near the bones of the banking system for quite some time.

~~~
ForHackernews
For those who are unfamiliar with the Robinhood "infinite money cheat code":
[https://pennystocks.com/featured/2019/11/12/robinhood-
left-u...](https://pennystocks.com/featured/2019/11/12/robinhood-left-
unlimited-margin-glitch-unfixed-for-nearly-a-year/)

------
0xff00ffee
I don't follow Abe Winter's logic: he had a good experience with an online
service and a bad experience with a bank, and the bad experience required
significant time to correct. Therefore: banks are bad. To make an accurate
comparison, he would need to document a fraud alert on his Stripe side.
Otherwise this comparison is meaningless.

Anecdote: I had a massive issue with PayPal payments being held up due to a
changing my business to a different state. It took literally 2 months of
losing 80% of my online purchasing revenue (paypal vs. CC). I had a very
difficult time getting in touch with a human, let alone a human with
authority. I felt like I was never making progress.

So from my perspective, talking to a chatbot or sending emails to anonymous
mailboxes is equally fraught as OP's experience and I could enumerate a
similar list of gripes.

Bottom line: complex systems fail spectacularly when you encounter a new bug,
regardless if it is some <10year old online startup or >100 year old banking
system.

~~~
coredog64
I swore off PayPal for ~5 years for something similar. I was part of a group
buy of something, and PayPal got overzealous in recognizing fraud. They locked
the target account for months, preventing the buy from completing. But they
also decided that they couldn’t refund the money either. In the end it took a
heroic effort by the guy doing the buy. TBH, I think he had fronted the money
for the buy, and so had to do the work to recover it.

~~~
chipperyman573
FWIW he probably did eventually get the money, paypal has a policy that
they'll release your money in a maximum of 180 days from when they freeze it.
But it's very likely he had to wait the full 180 days to withdraw it.

Source: Happened to me a few years ago as well

------
boh
The author is comparing two different things, forming an LLC vs
initiating/executing transfers. Banks are highly regulated with tight
fraud/AML restrictions. The risks are severe enough to demand caution over
client experience. I'm sure creating a banking infrastructure from scratch can
be done in a more effective way, but regardless of the firm tasked with
executing the transfer, they currently need to comply with the existing
structure. If, as the author mentions, fintechs will purchase banks for
pennies, then they'll be banks and you'll still have your transfer problem.
There's a reason why tech firms are making very limited strides towards
financial services.

------
nemothekid
I relate to the OP's frustration but it's clear why these Banks get away this
- there doesn't seem to be any money in retail banking at all and as a result
most banks do the absolute bare minimum unless you are very high net worth
individual.

With Stripe, you are the customer and treating you right is it their best
interest. Retail Banks try their hardest to charge you $50/mo for the
privilege of maintaining a database row.

I would imagine for CitiGroup retail banking makes up a small percentage of
their revenues. The engineers CitiGroup hires that would rival stripes aren't
working on Retail Banking products - those products are probably fully
outsourced.

~~~
hello_marmalade
Reasons to use a credit union. People should be moving away from all these
banks that essentially only abuse people on every level and move toward
cooperative financial institutions.

Alternatively, better banks like Aspiration, which is a B Corp, but I wouldn't
put all my money on that.

~~~
reaperducer
_Reasons to use a credit union_

Reasons to use _some_ credit unions. Just as there are good banks and bad
banks there are good credit unions and bad credit unions.

When I wanted to buy my first house, I called the biggest local credit union
to find out what the process would be like. Nobody would speak to me on the
phone until I went to their web site and filled out a "pre-qualification" form
that would then decide if I would be given a different phone number to call
and speak to someone to set up an appointment to meet someone in person.

No thanks. I took my real money to a real bank.

------
aj7
There’s a tremendous amount of “analysis” below on just how the convoluted
payment systems work. Keep in mind that their first design principle is to
maximize profit by limiting customer liquidity. At a certain point, as a
consumer, I do not care about the problems within a system designed to reduce
my utility to increase your profits.

~~~
bagacrap
I've heard this claim before and I think it's plainly false. They're mostly
worried about fraud, which is far more rampant that anyone who believes in
crypto currency likely realizes.

------
Symbiote
> why didn’t ATMs reduce the number of bank branches

At least in the UK, the number of branches has halved in 30 years:

"Over the past three decades, the number of bank branches has fallen steadily.
In 1986 there were 21,643 bank or building society branches in the UK. In 2014
there were 10,565. Over this period, the total number of bank and building
society branches fell by 11,078 or 51%."

Did this not happen in the USA?

[http://researchbriefings.files.parliament.uk/documents/CBP-8...](http://researchbriefings.files.parliament.uk/documents/CBP-8570/CBP-8570.pdf)

~~~
kube-system
It hasn't.

It looks like the US peaked in 2009 and has had a tiny (~5%) decline since
then.

[https://www.fdic.gov/bank/analytical/quarterly/2015-vol9-1/f...](https://www.fdic.gov/bank/analytical/quarterly/2015-vol9-1/fdic-4q2014-v9n1-brickandmortar.pdf)

~~~
mixmastamyk
Still using paper checks here! Not far from where the internet was invented.
Branches aren’t going anywhere until that is fixed.

~~~
mrep
What do you use checks for? My rent comes out of my bank account, I bought my
car with zero down so I didn't need a check then, and everything else goes on
my credit card. Thus, I've never written an actual check in my life.

~~~
twothamendment
Property taxes, car registration, school lunch. Those are the most common for
me. The first two can be paid with a card, but they tack on a fee.

------
therealmarv
In Europe we have really innovative Fintechs which build awesome apps like
e.g. Revolut (which are also in beta in USA) or N26. But guess what: Also
fintechs have to comply with regulation and need to comply with AML (Anti
Money Laundering) with their software and you also can get in trouble there.
When you have problems there then sh*t hits the fan too: You don't have a
branch were you could go, not even a telephone number, only chat in the app
and maybe twitter. It's like Google for finances.

Ideal would be a combination of both worlds I guess.

~~~
fogetti
Exactly, this is a recurring theme regarding Revolut which hits the media
headlines frequently, how Revolut also sucks when the shit hits the fan. I
guess there are also similar stories in case of Stripe too.

------
Keverw
> The chase operators told me a few times that ‘something is weird about these
> payments’ but couldn’t be more specific

Wonder if it got flagged as suspicious? Some banks aren't even legally allowed
to tell you some things about your own account.

But it does seem banks are still brick and mortar. There's a bank that won't
let you reset your pin online or over the phone, so have to psychically show
up and show your ID to someone who presses something in their computer and
tells you to type a pin into the USB key pad facing you on the other side of
the desk. I guess it's just a small annoyance if you live near by, but the
same bank doesn't have branches all over the place so if you end up moving
across the country probably should get a new bank anyways. I guess tech wise
could be done online as they could let you scan your ID and do a quick picture
or video chat or something to make sure it's really you maybe. Plus some of
the online only banks seem to pay higher interest too but not sure if people
really care about interest as not sure if it really makes a big difference to
some people. The local bank doesn't even pay 1% and hides the interest rate in
the fine print somewhere while some of the online banks pay 1% and openly
advertise such.

------
elric
Banks, especially big ones, are a special breed. I've recently had the
misfortune of working with people who work for a large US bank ... boy was it
eye-opening! I've worked in fintech for nearly a decade, most of our clients
are in the EMEA region. And while banks generally don't seem to attract the
biggest talent, and usually don't seem to be organized in a way that makes any
sense to an outsider, at least they're somewhat functional.

The US bank, on the other hand, is the single most dysfunctional organization
I've ever dealt with. Every single person I've worked with borders on
incompetent. There are so many useless layers of organizational abstraction
that everyone is always on the phone trying to make sense of their own
organization. And when things go wrong, Someone Has To Hang™, so when they're
not trying to figure out whose job something is, they're trying to cover their
own asses. Doesn't leave much time to get actual work done.

As near as I can tell, the only reason many of these big old banks are still
around, is because reality hasn't caught up with them yet. And, of course,
because they're sitting on a pile of money.

~~~
BlueTemplar
Wasn't the 2009 crisis caused by big banks' biggest fintech talent believing
their ~~astrology~~ math a bit too much ?

------
twothamendment
When I was 18 I had saved about $10k. I noticed on my statement it said I was
being taxed. What? I went into the branch to ask about it and they couldn't
tell me why tax was being taken out or when it would stop. I asked for a
cashier's check for the full balance so I could close my account. The teller's
jaw hit the desk. What did they expect?

A bank that can't explain their own statement to me is no bank of mine.

------
stantaylor
> I’ve never understood how branches can be profitable. My theory after this
> week is that some unknown force is sabotaging successful self-serve systems.

If the Wells Fargo clusterfuck of several years ago is any indication, that
"unknown" is very well known: upsell opportunities (or, in the case of WF,
just surreptitiously adding services and hoping the customer doesn't read
anything when they sign)

------
privateSFacct
It's really not clear what happened here.

Some misconceptions though I'm seeing.

1) Banks always pay ACH debit requests (that draw money from your account).

No - you can sign up for ACH positive pay if you want.

This generally gives you till 11AM PST to accept or reject an ACH request. You
can set rules by originator -ie, always pay up to $X from originator ID $Y.

You can also set a default to either pay unless rejected or reject unless
approved.

You can also put an ACH block on accounts that shouldn't have ACH activity.

All this costs money.

2) Wire transfers

Hard to rewind these, so lots of extra hoop jumping. New accounts may limit
your ability to wire large amounts of money.

3) Fraud is real.

Consider your parents and their retirement account. How would you feel if
someone wired out or transferred out their entire brokerage balance? Think of
how they authenticate with bank - could someone fake this? YES! Your parents
re-use their passwords, write them on sticky notes, and their PII is
everywhere.

Many more (sad) examples here.

------
nisten
From a UX perspective there's one great service that the banks provide and
that is identity managament.

In my opinion this is the main reason why things like cryptocurrencies have
not taken off, and that is because their identity & fraud management truly
sucks.

There's no person to talk to when you loose your access keys or forget a
pin/password.

It's extremely hard to automate all that purely in software, and the very few
that have succeeded in managing it(i.e. apple & google) have leveraged their
hardware infrastructure plus partnerships with telecom providers and all their
physical braches.

Yes old-school banks are inconvenient, can be hell to deal with, however it's
very hard to scale fraud when you need to physically show up in person at a
branch and I feel like this factor is very underappreciated.

~~~
Waterluvian
For me it's that they're CDIC insured and government regulated. The Government
of Canada would have to collapse in some apocalyptic event for me to lose the
money in my accounts.

They're also very stable (the regulated Canadian ones at least).

------
markvdb
I guess it's different in the US versus outside. Banks in the EU work
relatively well.

Recent progress includes much improved and cheaper SEPA payments thanks to EU
legislation, and transparent "the customer owns his data" EU legislation
pushing financial innovation.

~~~
ab_testing
Banks in the US also work relatively well. The problems happen when somebody -
anybody can find your name, date of birth and ssn from the internet. With
these 3 pieces of information, they can call any bank and pretend to be you.
That is why banks jump through hoops to verify your identity. That is where
questions pop up like

1\. What is your mother's maiden name that you gave us when you opened the
account

2\. What is the phone number listed on your account - so that we can verify
that it is really you.

And when all else fails.

3\. Banks ask you to go to a local branch with your id before they will unlock
your account.

That is what happened with the author in this case. However he thinks that
just because he is calling - the banks know that it is him when the bank can
never be sure.

------
miki123211
I feel like European banking is so much better than the U.S. You can do so
much on line, and everything is way more secure.

~~~
nraynaud
It really is, because the regulation is strong, faster and cheaper transfers,
common account numbering system, nobody bats an eye if your money crosses the
border (it was a nightmare in the US, BoA would reject my client's wires all
the time without explanation), etc.

~~~
BlueTemplar
"Crosses the border", how exactly? (Countries = States, Schengen = Federal)

~~~
nraynaud
I have no issues sending money from the continent to the UK or the US if
that's your intellectual model. But I don't think you're on the correct track.

edit: this sentence is weird, on the US, the money is blocked on the American
side according to the EU bank.

~~~
BlueTemplar
mental model : USA as one gathering of states, EU (Schengen) as another.

------
vonseel
This is a fun article, and I’m still reading it, but my immediate thoughts are
that

1) self-serve is a relatively new thing enabled by tech.

2) even in 2020 there are still clusters of people who aren’t great at using
computers, smart-phones, and apps and prefer doing things in person or on the
phone; yeah, you have some older people in there, but there are young people
who still do things the old way, because they never had an interest in
technology or just don’t know about other options.

3) Health-care and banking aren’t the only industries that don’t have slick
self-service portals like Stripe. I’d argue the opposite; only companies built
after the advent of recent web tech usually offer that, many of them, in fact,
are tech companies.

Think about United Health, this company employs some 300,000 persons. CEOs at
both United and Aetna are paid around $20M annual comp. Why does an insurance
company need 300k employees? Google itself apparently has around 100k - and
they do much more than just pushing paper. Why are these guys paid _so_ much?
To resist change perhaps, embrace too big to fail culture, and keep their
300,000 employees employed?

If private industry can seem this wasteful and inefficient, I don’t even want
to know about the dark corners of government where people are paid to sit at
desks and make photocopies on 30 year old Xerox machines everyday.

~~~
BlueTemplar
Not to mention that self-serve can suck, and in-person interaction can be
great. In both cases it's about effort (money) put into it. And into
maintaining it once it's not "shiny-new" any more...

------
aj7
Walked into a Chase branch with a $43,000 Wells Fargo insurance claim check.
Informed there’d be a 10-day hold. I exploded. (I didn’t need the $
immediately. It was the principal of the thing.) Went back to the car and
drove 1000 feet over to the WF branch. Same crap. 10 days. Even if I opened a
WF account with a WF CHECK! Went back to Chase, giving up. Silver lining. I
manage all my cash better today. It’s hand to hand combat, so you get good at
it.

~~~
bullfightonmars
This is most likely relates to the Bank Secrecy Act and IRS regulations for
deposits over 10k.

[https://en.m.wikipedia.org/wiki/Bank_Secrecy_Act](https://en.m.wikipedia.org/wiki/Bank_Secrecy_Act)

------
avmich
> the yubikey is the possession that gives me the most delight. I savor the
> click when I plug it in. I take it out and look at it sometimes, tipping the
> gold USB contacts towards the light, muttering about how it was a birthday
> present. One day someone will win it from me in a riddle contest.

Yeah, just don't try to follow the winner having gamer remorse. Rumors are
Mordor Security Agency gets serious searching for used keys...

------
immad
I am the cofounder of Mercury.co. We built a modern bank to support US
businesses.

I am somewhat surprised by the negativity on HN to this post. I think the
author is on target with issues he identifies at incumbent banks.

The future is going to be customer centric, technology driven banks and the
incumbents are going to have a very hard time adapting to that change.

------
chx
Speaking of going to branches, in the beginning my branch manager was awesome.
He set up everything for my small business, many of which I had no clue
existed which is no surprise since I was a new immigrant to Canada. He left
and handed my matters over to someone else who was also quite competent.

And then the next contact answered my email with the subject "Issues / meeting
tomorrow around 4pm?" with "Yes, I will assist you with all the issue, when is
good time to meet tomorrow afternoon?"... things didn't improve from there
(she prepared no paperwork for all the issues I detailed in my email and
wasted an hour of my time) and only got slightly better when I escalated to
the branch manager and got a different contact.

You can't explain this sort of attitude with being conservative etc. Nope,
banks these days just suck.

------
kevindong
Citi is notorious for having some of the worst tech in banking. It's bad by
even banking standards.

Anecdotally, I opened up a consumer Citi checking account. The account has two
distinct web UIs for transferring money via ACH. One looked modern but
outright didn't work (as I recall, I couldn't get any of the dropdowns to
populate with my account info so I couldn't use any of the web forms). The
other was clearly ripped straight out of the late 90s/early 00s, but it did
indeed work. The new version was the easily findable version, the older
version could be hunted down with enough effort.

Additionally, it was actually impossible for me to find my routing number
initially. I had to actually start a live chat with a customer service
representative to get it.

~~~
stevula
I just got one of their retail credit cards and it is the only card I own at
this point that doesn’t work with Apple Pay. Even my local credit union has
figured this out. I can believe Citi has some bad tech debt.

------
therusskiy
Russia is far from being the most developed country out there, but our banks
are infinite times for progressive than in other parts of the world. I can do
every single thing from their app or their site, never need to visit my bank
(aside from getting from an ATM).

~~~
muzika
American banks are targeted by fraud more than most banks based in other
countries, so they have to have more protections against fraud.

~~~
wnoise
[citation needed]

------
novok
Out of all the large banks, citi has the most obtuse, sensitive and brain dead
'anti-fraud' systems out there. I opened a credit card with them and had such
a bad experience with the anti fraud (which involved waiting for a letter for
2 weeks to be able to use the card again) that I won't open an account with
them again.

Chase, schwab, capital one, discover and amex I've never any issues with like
I did with citi. Even BoA was better.

I think my experience is a reflection of systemic issues at Citi, which is
reflected in how they are doing fairly bad compared to the other big banks.

------
peterwwillis
Incidentally, TIL that Citi Commercial Cards' password policy is ">=1 letter,
>=1 number, 6-9 characters".

Banks have zero incentive to modernize. They have a lot of customers that are
never going to move their money, and they don't need to constantly release new
products or compete for customers. All they have to do is not piss off their
existing customers so much that they move elsewhere. And because that's
usually a non-trivial (and potentially costly) process, they don't have much
to worry about.

------
rolltiide
A lot of misunderstanding on the author's part. Not only would the author not
have felt they were being gaslighted, they also wouldn't have had a nervous
breakdown dealing with it.

Yeah, the user experience sucks, its an art to deal with though. So was Citi
or Chase the brokerage firm, or was there a third brokerage firm like TD? Some
people like the author's writing but some of the "who and what" is not clear,
let alone the piss poor understanding of how the US banking system works.

------
jotakami
I just read _The Phoenix Project_ so I feel like they just need more DevOps
lol. But seriously, banking is a sales-and-marketing-driven industry and those
are the least likely to understand and embrace the process improvement
revolution that transformed manufacturing and is currently transforming IT. I
think the author’s comment about the lack of technical expertise in management
explains it most succinctly.

------
jijji
automation of an LLC seems like a pretty dangerous thing considering you are
trying to automate dealing with 1) secretary of state and 2) irs and 3)
creation of a business bank account.... does this really need to be automated?
it seems like a solution looking for a problem. It also seems like a minefield
from an automation perspective because there are too many errors that can
happen through automation at each step in this process. Its mostly an
information gathering process for step one and step two, step three is
information gathering and verification of what you submitted... it takes a few
hours to this by yourself online and in person at the bank, and when it fails,
you will need various humans in each step to figure out what went wrong. For
example, IRS.gov will block on SS4 filings for various reasons, i.e. only one
filing per day.. Seems too error prone to try and automate, and I bet they are
using screen scrape tools to do it and so its probably going to break when the
endpoint changes any form variables too..

------
juskrey
US banks are simply not suitable for remote problem solving. I once have run
US company remotely, which was completely blocked for three weeks after one
typo in outgoing transfer. Never remotely again. I thought Stripe Atlas have
solved this problem.. Turns out not..

------
nottorp
Hmm yes we know. US banks suck.

However, I'd tone down the Stripe praise a bit. I bet that if you had a need
that isn't covered by their script you'll be in even more trouble than with a
traditional bank.

------
xvilka
I like the approach of Chinese banks here - almost everything can be done from
the mobile application, way more than in US or EU banks apps (apart a few
exceptions). There is another problem though - they are riddled with
advertisement on every screen. I wish more innovation in that sphere. It
applies to both personal and corporate experience.

------
BlueTemplar
Why is this guy still not using an online-only bank in 2020 ?!?

~~~
mrep
What's better about an online-only bank? From what I have seen, I could get
some interest on my checking account but that wouldn't be much as I only keep
enough in there to autopay my rent and credit cards. Other than that, my
checking account is free, they have ATMs everywhere, and there are tons of
banks I can go to if I need to.

~~~
BlueTemplar
Well, _I_ don't know, I'm still using a traditional credit union (?) bank, but
_this_ guy certainly seems like it should have been an early customer of those
?

------
lewsid
I just feel compelled to share that this was a delight to read. This Abe dude
can write. Especially enjoyed the bit about Chase gaslighting him.

~~~
notyourday
I call B.S. on Chase gaslighting him. For a bank to do what he is describing
is a one sure way for the OCC to get involved and there's not a single bank
regulated by the OCC that wants folks from OCC poking their nose in it.

Simply put - bank has zero upside backdating transactions and an enormous
downside.

~~~
gamblor956
I don't think it's gaslighting so much as it is him not understanding how
transactions work.

There's the posting date, which is when the transaction appears on the
statement. However, the details of the transaction, such as the amount or even
whether the transaction should be cleared, have not been finalized, so they
are still subject to change by the merchant. Paypal used to use this to
authenticate bank accounts, and other merchants also use this to pre-authorize
payment accounts (i.e., credit cards) or payments.

Then there's the _clearing_ date, which occurs after the merchant finalizes
the transaction. Legally, this is when the money actually leaves your account.
Generally, the amount at clearing is the same as the amount at posting,
however for restaurants, the amounts are usually different because the final
amount includes the tip, if any.

~~~
viraptor
There's unfortunately no standard on which date is shown in the UI. I've used
banks showing either one of those and also some that show both. You can
sometimes also see both when downloading the transaction in some more
structured file format.

It's useful to understand which one is being presented by default.

------
anonymoushn
I'd like to use this version of Stripe's product. The one I used makes you
wait a month or so until you give up and use LegalZoom.

------
Justsignedup
To note, Taxi Medalions server a good purpose, but are also corrupt.

There should be NO ABILITY TO TRANSFER a medallion AND requiring proof that it
is actively being used. You shouldn't be able to sell it.

Taxi medallions actually keep city streets clear of massive cabs, which is
exactly the problem that happened in nyc once uber/lyft moved in.

------
chrono3d
The gaslighting comment really resonates with me. It's one of the reasons why
I find the push to paperless everything a little disquieting - sometimes I
want to keep records in case my dispute is with the record holder!

I had an issue with a credit card company a few years ago, in which I had to
request a new card. Apparently, as part of the new card issuance, they also
"helpfully" moved my payment due date -- which I found out about when I
received a past-due notification via the mail. Had I not had a paper statement
with the correct due date on it, I probably could have been convinced that I
had just missed making a payment, especially as the initial customer service
representative insisted there was no way a new card could change my payment
due date. Only after escalating a couple of times were they able to figure out
that I in fact hadn't requested my monthly cycle only be 18 days long.

Now my wife makes fun of me because I still receive and file away paper
statements, just in case.

Edit: removing names since it's not relevant to the story.

~~~
ryukafalz
I’m still a fan of email for this reason. Once someone sends me an email, the
copy in my inbox is _mine_ , and the sender can’t later hide it/take it
back/etc.

~~~
michaelhoffman
If I could get banks to send me financial statements as PDFs in an email I
would sign up in a second.

~~~
viraptor
If it's really important to you, you can use one of the companies which
receive and scan your post into emails. Then change your bank correspondence
address to them.

~~~
michaelhoffman
That's a good idea. Thanks.

