In the US you only need a name and bank account number (and to know which bank it belongs to to find the routing number) to make ACH withdrawals. That's why.

I'm not aware of any reforms in the banking system to change this awful system, so these online services are the next best thing. I am still waiting to find a good opportunity to use Square Cash.

ACH is far more complex then being able to withdraw money from someone's bank account with just their account number. To be able to initiate an ACH transaction bank level authentication is needed and it can only be done from an authorized bank. Can you give me a use case where someone can withdraw money from my bank account using just my bank account number ?

Any ideas ?

There is no logical reason for someone not to give out their bank account number anymore than their Credit/Debit card number. In both cases consumers are indemnified by federal regulations. However perception is bigger than reality - just like in the early days of the Internet/e-commerce people were afraid of using their credit card numbers online so are they wary of using their bank account numbers online.

We do have something closer to what you're talking about though. Most large US banks offer the ability to transfer money to other members of the same bank with simply an account number. Such as Bank of America to Bank of America, or Wells Fargo to Wells Fargo. There are fees associated with going Wells Fargo to Bank of America though which is a turn-off.

The other problem with these kinds of transfers is that there is no API for integrating that technology into a 3rd party service. I would have to go onto Wells Fargo's site to transfer money to another Wells Fargo customer. If those banks had any sense at all they would innovate and release APIs to enable that kind of transaction.

The US economics are pretty simple - banks know they can charge for it.

TL;DR: regulation

* http://en.wikipedia.org/wiki/International_Bank_Account_Numb...

* http://en.wikipedia.org/wiki/Single_Euro_Payments_Area

You can also withdraw money if you have the bank account information. A famous example is Don Knuth, who had to stop offering rewards checks: http://www-cs-faculty.stanford.edu/~knuth/news08.html

"You see, sending money across state lines is not easy. There needs to be insurance in case wild natives attack and steal the leather bag containing those money orders... It's only fair that we pass that cost on to the customer."

edit: If people are curious, its this: https://home.capitalone360.com/p2p

Wire transfers are (almost) real-time and use Fedwire (domestic) and SWIFT (international) for communication in real-time. Usually banks charge hefty fees for this.

ACH is a batch network that takes minimum of 2 business days and generally costs mush less - often free too if you go through the bank's site.

The 2 are separate networks and regulated completely differently and hence different charges. Bottom line: if you want money transferred ASAP i.e. real-time/same-day it's likely to cost you. If you can wait for 2-3 days its likely to be free

That's an odd thing to say. For those of us that aren't Capital One customers, we do have to pay, because the Capital One service you use is not available to us. It's not some web service like PayPal we can sign up for on a whim either; opening a 360 account with Capital One requires an application, a credit check, an existing checking account with another bank, etc.

http://www.mybanktracker.com/news/2013/03/20/ways-send-money...