US banking from a foreigner´s perspective

  • Travel

I´ve been in the US for 8 months now and one thing that keeps bugging me is how old-fashioned my bank is. There are many things about it (and possibly the financial system in the US) that are different from what I am used to from home. Here is a list of the things I could think of at the top of my head. I hope it helps prospective long-term visitors and people intending to settle here.

Cash is (still) King

I haven´t used cash in years. In fact, I doubt that my children (of school-age) could describe what our coins and bills look like. But here, cash is still king. When we want to use a washing machine in our housing complex we need to get a roll of coins from the supermarket. If we want to buy some fruit from the fruit stand at the corner we have to pay with cash. But although the use is still common, most indoor shops accept debit cards and Samsung Pay solutions (and some even accept Apple Pay). Still, I always keep cash in the wallet, just in case. Actually, I had to buy a wallet with a zipper-closed pocket in my first weeks here so I could have someplace to store the coins I got as change because I only had a card-holder when we arrived here (true story!).

Cheques and Wire transfers

I have several overseas bank accounts with accompanying VISA or Mastercard debit and credit cards, but because many housing companies in the US still require a cheque when making payments, I needed a US bank account so that I could pay the security deposit for the apartment we wanted to rent. I have never issued a cheque before, as we pay using direct debit or wire transfer. But to get a bank account here, there are other hurdles to overcome- one thing is needing a social security number, which usually takes weeks to get (you need to be in the country for three weeks before being able to apply, and then it could take a couple of weeks to get the social security card). However, banks with branches on the university campus are used to accomodating foreign students and offer accounts, provided that you can prove that you are affiliated with the university (like a student or staff ID-card).

So, after I got my account, the bank gave me a sheet with blank cheques that I could use. It´s not convenient in any way, but when there are no other accepted modes of paying, those sheets of pre-printed paper are worth as much as the figure you want to put on them. But then it turned out that the housing company only needed the security deposit in cheque format. All actual rent payments could be paid through automatic wire transfer every month, which is great! But apparently, each wire transfer costs money, which to me is ridiculous. The bank gets to keep your money for free, but if you want to actually use it you have to pay! Luckily, my bank waives the fee, so after seeing it deducted, I usually see a deposit a couple of days later.

Transaction time

I am used to funds arriving the same day or early the next morning when I make a transfer, but here, it could (and often do) take more than 24 hours to receive a transfer through conventional banking. This has put us in a conundrum at times when money has been transferred out of one account but hasn´t arrived in the other account, which meant we couldn´t go to the store that day (for safety reasons we don´t keep a lot of money on the account we use for shopping). To get around this problem, there are multiple private institutions (banks are also private institutions or co-ops,) that can help friends and family send and receive money quickly. These include PayPal, Venmo, Zelle, and many more. The problem is that each company works within it´s own eco-system, meaning that you can´t send money from a Venmo account to a Zelle account. So, depending on what your friends, co-workers, or coaches use, you need to install that particular app. This seems natural here, but back in Sweden we have banks coming together and creating a common solution that makes it possible to instantenously transfer money or even pay in shops using one app, regardless of which bank you use. No VISA, Mastercard or credit card needed, just a bank account.

Online banking

So, apart from the hassle of using cheques, having to pay for every transaction, and needing to wait until the next day (or longer) for a transaction to go through, the greatest frustration for me is the process of logging on to the online bank to check my balance, make a wire transfer, or pay a bill. I´m used to having an external device or a mobile bank ID that can be installed in a mobile device to authorize me when I want to log in to my online bank. My US bank has something similar — a two-step authentication process that includes calling or sending an SMS to my phone with a unique login code every time I try to log in with my password. So far so good. But the problem is that sometimes (ok, most of the time) the code doesn´t arrive immediately after I have keyed in my password to log in. This means I have to wait until it shows up before I can proceed, but by the time I receive my unique code, the login session has already expired and the unique code can´t be used anymore! At that point, I usually try to log in again, and often (but not always) the login code will arrive faster. So far, I´ve had to wait anywhere between 5 seconds and 3 hours (!) for my code to arrive. So, this has made me re-think how I do my banking. I have noticed that the code usually arrives faster on weekdays during office hours (do they manually send them out??), but I mostly take care of my financial errands on the weekends or in the evenings (including checking my balance and making transfers). This discrepancy makes things extra annoying, especially when trying to make transfers before the weekend (so we can use the money during the weekend). I suppose I should be happy that they at least have an online portal, so I don´t have to go to the bank in person to take care of my business.

Conclusion

I am surprised to see that the supposedly most technologically advanced nation in the world is so far behind when it comes to financial solutions and bank technology. Currently, most people rely on cheques, cash (and if you are more well-to-do), VISA, and Mastercards, but there doesn´t seem to be much advancement in banking or in introducing technological tools to make financial decisions and functions easier for general bank customers. When comparing it with solutions in other countries, it seems so backward and often it feels like the US banking system is stuck in the 1990s (but not even at that time did I ever see cheques being used). This, of course, could be the reason why there are so many alternative financial tech (fintech) companies here.

To conclude, this was a list of obstacles that people who are not used to US banking could face when banking here. Did I miss anything? Please let me know in the comments!

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