Most days the services of my local Credit Union work very well for moving around my money. There’s not much that I can’t do at the Credit Union that I could otherwise do at a bank, and the Credit Union has better hours, friendlier staff and more flexible policies than most banks (interesting sidenote: a Charlottetown businessman of my acquaintance told me he’s going to save more than a thousands dollars a year in fees by moving his business accounts to the Credit Union from a major bank).
There’s one thing that neither banks nor credit unions do particularly well, though, and that’s letting you easily move money beyond their institutional boundaries. Of course there are cheques (or “checks” as I’ve had to learn to spell this word for my U.S. customers), and regular old cash. But while it’s easy for me to transfer $100 from my own TD Bank account to my mother’s TD Bank account, it’s almost impossible for me to transfer $100 from my local credit union account to my brother’s local credit union account in British Columbia.
I say almost, because I was quoted a scheme whereby my local credit union could sent a message to Credit Union Central of PEI, which, in turn, would send a message to Credit Union Central of BC, which, in turn, would send a message to my brother’s credit union in BC. This would take several days, and I would never do it, if only on spiritual insanity grounds.
I thought PayPal was going to solve this problem once and for all, especially once they appeared to do away with onerous fees applied to international transactions.
So we did a test. I opened up a PayPal business account, and sent $700 to my brother in BC using my MasterCard as the vehicle for getting money to PayPal. He opened up a PayPal account, and prepared to withdraw what I’d sent. This looked like it was going to work wonderfully, and only cost us 55 cents to boot.
Then, clang, the idea imploded when BC brother was told that he had to upgrade to a PayPal Premier account to be able to receive the money and, in doing so, would be subject to a 2.9% fee (or roughly $20).
So while PayPal might be good for many things, it’s not good for this. In other words, PayPal ain’t no replacement for Western Union (which is expensive in its own regard).
Eight years ago when we were doing e-cash experiments at the PEI Crafts Council, I imagined that this issue — how to throw cash digitally — would be solved by now. Alas it’s not, and so to fling money across the country still requires traditional banking contortions.