When no cheques how do you purchase over $10,000 items

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Ultimate Geek

#2483382 14-May-2020 09:01

SirHumphreyAppleby:

Of course cheques cost money. Getting rid of them allows banks to slash costs which will not be passed on to customers. ASB a few years ago stopped accepting cash via the Fast Deposit boxes, then months later removed the service altogether. Given cheques are still handled by the branches, along with other tactics such as automatically opting people out of paper statements and charging $0.20 for a verification text that costs a fraction of that, it's clear these changes are driven by profit, not practicality.

There is currently no substitute for cheques, especially for large purchases and business transactions. Even if the bank's savings were passed on to customers, the additional staffing cost to businesses, having to login to Internet banking to perform comparatively time-consuming one-off transactions, or waiting in line for manual transactions or to use ATMs, or making phone calls or visiting the bank to approve a transaction above whatever the bank arbitrarily decides is an acceptable limit, far exceeds those costs.

If you're happy to pay fees for alternative payment methods, go ahead.

It takes a couple of seconds to login to IB and set-up a payment.

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eracode

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#2483383 14-May-2020 09:02

SirHumphreyAppleby:

Handsomedan:

So you don't believe that cheques ever cost you or anyone else anything?

And you don't think that the massive infrastructure and staffing costs should be in any way covered by the very customers who use said staff and infrastructure?

Of course cheques cost money. Getting rid of them allows banks to slash costs which will not be passed on to customers. ASB a few years ago stopped accepting cash via the Fast Deposit boxes, then months later removed the service altogether. Given cheques are still handled by the branches, along with other tactics such as automatically opting people out of paper statements and charging $0.20 for a verification text that costs a fraction of that, it's clear these changes are driven by profit, not practicality.

There is currently no substitute for cheques, especially for large purchases and business transactions. Even if the bank's savings were passed on to customers, the additional staffing cost to businesses, having to login to Internet banking to perform comparatively time-consuming one-off transactions, or waiting in line for manual transactions or to use ATMs, or making phone calls or visiting the bank to approve a transaction above whatever the bank arbitrarily decides is an acceptable limit, far exceeds those costs.

If you're happy to pay fees for alternative payment methods, go ahead.

What you’re forgetting is that paper and ink need to be made, cheques printed and bound into books, shipped to bank, distributed to customers. Then sent by payee to their bank, processed through a dedicated machine, then stored for seven years. Not to mention the staff involved in each of these steps.

All this is highly inefficient and costly compared to an electronic transaction. If cheques were still such a favoured form of payment surely there would be more than the less-than-1% of bank customers still using them.

As for fees, I don't pay my bank any fees for everyday personal transactional banking.

Sometimes I just sit and think. Other times I just sit.

SirHumphreyAppleby

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#2483385 14-May-2020 09:04

eracode:

What you’re forgetting is that paper and ink need to be made, cheques printed and bound into books, shipped to bank, distributed to customers. Then sent by payee to their bank, processed through a dedicated machine, then stored for seven years. Not to mention the staff involved in each of these steps.

No, I have not forgotten that.

wellygary

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#2483387 14-May-2020 09:04

SirHumphreyAppleby:

No matter what the solution, I absolutely refuse to let the banks take any fees for doing so. Cheques have worked perfectly well for decades and current trends are entirely motivated by profit.

Until 2014 you paid 5c on every cheque you wrote to the government, so moving from cheques saves you money....

https://www.beehive.govt.nz/release/cheque-duty-be-abolished-july

Geektastic

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#2483389 14-May-2020 09:09

tomgeeknz:

I bought a house last year, and somewhat scarily can't remember how I paid the deposit... Wasn't a cheque though.

Transferred just under 50K from ASB to my lawyer it seems...

I remember my father buying one back in about 2000 and paying the entire amount in cash (about $500,000 equivalent) by bank transfer so it must be possible - it cannot be illegal or impossible to spend money otherwise what is the point of it?

You can still pay in actual cash. You would merely be expected to demonstrate where the cash came from and the withdrawal receipt from the bank should suffice.

BlinkyBill

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#2483428 14-May-2020 09:49

Correct me if I’m wrong, but if you want to pay for something >$10,000 in cash, aren’t there money laundering reporting obligations To comply with? What is the limit for bringing cash into the country - $10,000 otherwise declare it and explain?

Handsomedan

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#2483480 14-May-2020 10:05

BlinkyBill:

Correct me if I’m wrong, but if you want to pay for something >$10,000 in cash, aren’t there money laundering reporting obligations To comply with? What is the limit for bringing cash into the country - $10,000 otherwise declare it and explain?

For AML/CFT reporting the $10k limit no longer applies...it's less and not disclosed.

Also there's the "suspicious transactions reporting" protocols too...

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mudguard

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#2483519 14-May-2020 10:08

BlinkyBill:

Correct me if I’m wrong, but if you want to pay for something >$10,000 in cash, aren’t there money laundering reporting obligations To comply with? What is the limit for bringing cash into the country - $10,000 otherwise declare it and explain?

As far as I know, there are list that have to report the transaction. But say you withdraw $15K to pay for a used bike/car, give it to the seller, when they deposit it the bank will report it. The AML rules had a massive shake up, and I thought it was supposed to capture more services, but ultimately most of the money is stored in banks. For example the company I work for will not accept payment from a third party. Only approved accounts, otherwise there are AML requirements (NB we have to comply with some overseas AML requirements).

As for cheques, I have one here for $25US, that will cost me $15NZ to deposit. That is to reflect the risk and the cost of processing. And probably the reason why it's close to expiring. I just can't be bothered. I used to get reparation cheques from maybe the Justice Department from a burglary about fifteen years ago. They'd be for less than $5 every couple of months, I don't think I ever deposited one, it was just so stupid.

BlinkyBill

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#2483520 14-May-2020 10:10

I sold my Pajero for $10k a couple of years back. I was majorly surprised that the guy paid in cash - he wouldn’t do a transfer for some reason, came from Wanganui to pick the car up, went to his bank in my local area, pulled out the $10k, gave it to me; and I went back to the same branch the same day and put it back in again. Was a bit of a pain actually.

In hindsight I should have kept the Pajero, was a fantastic vehicle except for the petrol costs.

eracode

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#2483522 14-May-2020 10:10

BlinkyBill:

Correct me if I’m wrong, but if you want to pay for something >$10,000 in cash, aren’t there money laundering reporting obligations To comply with?

The AML law cash transaction reporting requirements are not applicable to the general public - just applies to those mentioned in an earlier post.

Sometimes I just sit and think. Other times I just sit.

Geektastic

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#2483544 14-May-2020 10:35

There are rules and they will no doubt report the transaction.

However, that does not mean you cannot spend $1 million in cash if you so wish - as long as you can demonstrate where it came from if asked. It's not illegal to use real money.

PolicyGuy

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#2483622 14-May-2020 11:46

gbwelly:

Last one I sold, the person came with over 10K in cash. That can't be a better system than a bank cheque?

And when you deposited it, your bank will have reported that transaction under the Anti-Money Laundering laws.
Did you get a 'please explain' phone call from the bank's head office?

I'm not sure how that works, maybe you are now on a 'watch list'

SirHumphreyAppleby

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#2483654 14-May-2020 12:21

PolicyGuy:

And when you deposited it, your bank will have reported that transaction under the Anti-Money Laundering laws.
Did you get a 'please explain' phone call from the bank's head office?

I'm not sure how that works, maybe you are now on a 'watch list'

We often get phone calls from the bank regarding cheques, including for payments to the IRD, which you'd think wouldn't be questioned. Since these are business cheques, they usually call two signatories to confirm the details. They definitely keep an eye on where the money is going to, and if you do send a few thousand dollars to someone a few times, even if over several months, they'll probably pick it up.

rugrat

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#2483758 14-May-2020 13:26

Lol, all these posts about getting phone calls of please explain. I understand $10,000 plus has to be reported.

I received about $17,000 direct debited into bank account 5 years ago, then wrote cheque out week later for $20,000, never heard anything from any body.

Transactions probably reported, but it didn't effect me in any way. If they want to waste their time having people on watch list then good on them. Life as normal for me.

mudguard

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#2483761 14-May-2020 13:31

rugrat:

Lol, all these posts about getting phone calls of please explain. I understand $10,000 plus has to be reported.

I received about $17,000 direct debited into bank account 5 years ago, then wrote cheque out week later for $20,000, never heard anything from any body.

Transactions probably reported, but it didn't effect me in any way. If they want to waste their time having people on watch list then good on them. Life as normal for me.

I think it's more when people question why transactions can't be instant. I'm wondering what the repercussions of the Westpac 'micro transactions' that had been paying for awful things. The amounts were so small that it can't have been laundering so probably didn't even register.

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