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Day to Day banking

In the US, if you need to send someone money, it goes like this:

  1. The recipient gives you his or her address
  2. You mail a check to the recipient
  3. The recipient carries around the check for a few days, and eventually takes it to his or her bank.
  4. The recipient's bank cashes the check and presents the check to your bank.
  5. Your bank sends the money to the recipient's bank.
In Europe, it works like this:
  1. The recipient gives you his or her IBAN and optionally, a reference number (equivalent to the "note" field on a check)
  2. You tell your bank (via their website) to send money to that IBAN and include the reference number, if there is one
  3. Your bank sends the money to the recipient's bank.
Now, the key thing to understand is that almost everyone only knows their own system. Europeans have no idea what to do with a check, and Americans have no idea what to do with an IBAN. 

Fortunately, the US is big enough that some of the European banks know how to deal with it -- sort of. Unfortunately, they use terminology that, while correct, is not the terminology used by the US. For example, do you know your Fedwire or ABA number? It's the first 9 digits on the bottom left of your checks, often called a routing number. Here, you'll be asked for your Fedwire number or your ABA number, not your routing number.

Many banks, in an effort to be helpful, will also have or be able to provide a Fedwire/ABA number. Unfortunately, that's all they'll provide. Their customer service people will have no idea what to do with it, or they'll assume that ABA plus account number is all that you need. If you tell them that you need an address where you can mail a check, they'll be confused or horrified. 

I'm learning all of this because the company that is helping with our move sent us a bill with almost, but not quite entirely, unhelpful information. They wanted us to pay $52.50 to a US bank (amusingly, a former employer), and gave us only account information and a reference number. To pay that bill, even though I have a US checking account, I had to do a wire transfer that cost almost as much as the bill itself.

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