Google Scares Aussie Banks

mask.of.sanity writes "Google could be the biggest threat to Australia's big four banks because of the trust online users place in it and its ability to engage with customers, banking executives say. They told an audience from the finance sector that companies like Google and PayPal are more responsive and trusted than banks, and cited emerging technology with an emphasis on online applications as a means for the smaller credit unions to challenge the position of incumbent banks. It's welcome news for Australia's credit unions: the nation's banks have taken turns in being the first to lift interest rates above the official reserve bank rate, with others collectively following suit, leading some to speculate they are in collusion."

Comments

"Responsive and trusted"

[mr_mischief]

Perhaps there's some cause and effect going on there. Companies that are more responsive to customer demands and concerns are, in my experience, more trusted by the customers. Perhaps the banks have already figured out how to compete and just don't realize it yet because being competitive cuts into profit margins.

Re:"Responsive and trusted"

[Nursie]

Yeah, I'm about ready to jump ship at the moment. I applied for a credit card with ANZ a week and a half ago. They tried to call me the next day and I missed it. Since then I try to call back every day or two, to find out what they wanted, but every time I get put on hold and I'm afraid my patience runs out after 15 minutes of that. I've been to the local branch too, but all they can do is phone the credit card folks and wait on hold with me.

I don't actually need your credit card enough for me to put up with that nonsense, thanks.

Re:"Responsive and trusted"

[Barefoot Monkey]

Perhaps there's some cause and effect going on there. Companies that are more responsive to customer demands and concerns are, in my experience, more trusted by the customers. Perhaps the banks have already figured out how to compete and just don't realize it yet because being competitive cuts into profit margins.

Being uncompetitive is far more profitable until competition comes and ruins everything.

Re:"Responsive and trusted"

[Anonymous Coward]

Perhaps there's some cause and effect going on there. Companies that are more responsive to customer demands and concerns are, in my experience, more trusted by the customers. Perhaps the banks have already figured out how to compete and just don't realize it yet because being competitive cuts into profit margins.

You have to wonder just how bad these Australian banks are when PayPal is "more responsive and trusted".

PAYPAL?!?!?! "more responsive and trusted"!!?!?!

Is dealing with these banks like handing your money over to the first meth fiend you can find laying in a ditch?

Re:"Responsive and trusted"

[HungryHobo]

Paypal may be bad but the fact that they're still better than the majority is deeply depressing.

If they were subject to any kind of law other than their ToS and couldn't confiscate your money on a whim paypal would be even further ahead.

Re:"Responsive and trusted"

[mr_mischief]

That's the exact truth in too many markets. And that's what leads to uncompetitive companies being anticompetitive companies. They'd rather play the scared victim than return the threat by actually following the trends in the market.

Re:"Responsive and trusted"

[mjwx]

"Responsive and Trusted" does not mean in any way shape or form that PayPal and similar services are in any way responsive or trustworthy. All this story indicates is that they are _more_ trustworthy then they big four banks.

Some banks have effectively shut down operations outside of normal business hours making it difficult to impossible for some Australians to get to an actual bank, fees are hidden and slanted towards the banks favour to the point of outright fraud in some cases and the only method of appeal is to go via the ACCC (Australian Competition and Consumer Commission), basically a government enquiry (as much good as the ACCC does, it does it very slowly).

It's next to impossible to find a credit (or debit) card that will not charge a minimum of 2% on top for foreign currency transactions. Paypal is not in any way trustworthy, but they are better then Aussie banks.

Re:"Responsive and trusted"

[Charliemopps]

Come to the USA! It's so easy here it doesn't even have to be you that signs up for it. Half the time it's someone on the other side of the country that you've never met that sends in the application and the CC companies are more than happy to extend them credit in your name.

Re:"Responsive and trusted"

[drsmithy]

It's next to impossible to find a credit (or debit) card that will not charge a minimum of 2% on top for foreign currency transactions.

Just a point that there's nothing unusual at all about Australian banks doing this, and certainly all the banks I've ever used while living abroad did exactly the same thing (though the exact amount obviously varies).

I was fortunate enough back in the day to get a Wizard Credit Card, however, which has no additional fees or charges - nor exchange rate padding - for foreign transactions. Hands down the best way to get money out of the country. I'm amazed whoever-it-was that bought Wizard hasn't shut it down.

Re:"Responsive and trusted"

[mjwx]

Just a point that there's nothing unusual at all about Australian banks doing this

Never said there was anything unusual about it, in fact as we both pointed out it's quiet "usual".

As I was trying to point out, this is how Australian banks like to rip people off. Not only do they take 2% of a transaction when it's completed in a foreign currency (we are one of the _few_ nations where this is done, let alone the norm) but you also pay a $4 flat fee for using a visa cash advance and possibly a $2 fee for using a different banks ATM. Most people don't actually know about the % fee for using your debit or credit card for overseas purchases, banks like to bury this little detail deep down in their fee schedule so few people see it.

Re:"Responsive and trusted"

[TapeCutter]

From an Aussie POV the claims sound like absolute bullshit to me. People might use PayPal to transfer a few bucks over the net but they're not going to put their life savings into it. Who the fuck do you call if there's a problem with PayPal, where are their bricks and mortar branches? The big four may be arrogant, slow and greedy but they are big because most Aussie's know they are the safest bet going.

Re:"Responsive and trusted"

[drsmithy]

Never said there was anything unusual about it, in fact as we both pointed out it's quiet "usual".

I think you might be reading my comment with the wrong inflection. When I wrote it, I was trying to point out it's not unusual for banks to do this everywhere, not just Australia.

As I was trying to point out, this is how Australian banks like to rip people off. Not only do they take 2% of a transaction when it's completed in a foreign currency (we are one of the _few_ nations where this is done, let alone the norm) [...]

In what countries is this not normal (or any of the other fees you mention, for that matter) ?

Re:"Responsive and trusted"

[Anonymous Coward]

They're regulated in the UK by the FSA (Financial Services Authority), which sets some minimum standards they have to abide by with their UK customers at least. If Australia has a similar body overseeing them there, it could account for the disconnect.

Re:"Responsive and trusted"

[Yvanhoe]

I also used to complain a lot about paypal and the ridiculous fees they impose to some transfers and then I compared to what banks offers. It was in 2009. These banks apparently STILL DON'T KNOW THAT INTERNET EXISTS. Paypal may have exaggerated fees, but regular banks have blatant racketing schemes (that you have to sign for 4 years minimum). It is actually that bad and Paypal IS very competitive compared to the usual bank sharks.

Re:"Responsive and trusted"

[Anonymous Coward]

It's "normal" (read: pretty much everyone does it) for this to happen here in the UK, but it's certainly not difficult to find cards that don't add on charges - I know because I had to get exactly this type of card three months ago and I had a choice of at least four from, if not major, at least reasonably sized banks/building societies that I'd heard of and had no problem doing business with. Several more cards did add charges but these were still less than the norm (i.e. some only charged if you withdred cash overseas, not for direct card purchases overseas).

Re:"Responsive and trusted"

[Bill Barth]

It's 3% on my Citibank card here in the US. That's the normal rate for US-based banks for foreign transactions, BTW.

Re:"Responsive and trusted"

[Zeek40]

That's exactly what I thought. Why the hell are the four biggest banks so in bed with each other that they're having meetings to determine which of their other competitors is a threat? What is wrong with the govermnent oversight of the Australian financial industry that those banks have the balls to come right out and state that they're worried Google and Paypal are going to steal the market that they've divided up amongst themselves?

Re:"Responsive and trusted"

[Bigjeff5]

Who the fuck do you call if there's a problem with PayPal, where are their bricks and mortar branches?

From what others are saying, the brick and mortar branches just call the home office and sit on hold like everyone else.

Other than sharing the misery of waiting on hold, it doesn't sound like an improvement over PayPal to me.

Re:"Responsive and trusted"

[gknoy]

Trusted isn't the same as Trustworthy. It may just be that Paypal works as expected for so many people, and is so convenient, that many users forget (or disregard the risk implied by) the horror stories.

Re:"Responsive and trusted"

[greed]

In a number of non-US jurisdictions, PayPal is regulated more like a bank.

But when it comes to international transactions, the choices in terms of increasing cost are: mailing cash, using a credit card (which only works with merchants), then using PayPal (which works with everyone). Then there's a big gap, and you get International Postal Money Orders. If you can find a Post Office at both sides that know what they are. Then there's an even bigger gap (in costs) and you can start talking about wire transfer service, or negotiating a cheque in a foreign currency, or all that sort of stuff.

Obviously, mailing cash has issues. But for, say, a $20AUD amount, I would have been happy to go to the money exchange here (Canada) and get a $20 Aussie bill and stick it in the mail. PayPal was the only other approach that had fees much lower than the transaction amount; a Money Order would have had a $5CDN handling charge, nearly 1/4 the amount of money.

For the wire transfer services that we could find, it was more like $40 or $60 handling.

Suddenly, PayPal's rates look really good.

If you are staying within a single currency, sure, there's more choices. But if you're going international, PayPal gets really good really fast.

Re:"Responsive and trusted"

[numbski]

I'm replying at the top for one reason - because if I haven't seen this in the first few replies, it's dying to be said:

If you're less responsive and even less trusted than PayPal - you my friend, are royally screwed.

Re:"Responsive and trusted"

[KingAlanI]

It's easy for people to overrate the actual concern that stems from vivid rare events like the PayPal horror stories.

Re:"Responsive and trusted"

[Anonymous Coward]

Yeah, PayPal is a really good option for my international sales [not eBay, but deals of that nature]; I've never sold anything more than a few hundred dollars.
The way my negotiations work, it's relatively straightforward to work the fees into my pricequote anyways.

Heck, it sometimes saves hassle with domestic customers as well, especially the smaller domestic sales.
69c+44c (to get and mail domestic money order) is higher than the fees on a domestic PayPal transaction of $28.62 or less, and PP for a bit larger might be worthwhile because it is somewhat simpler.
Also, the customers would be more annoyed with concealed cash and MOs than I would be with receiving them.

Re:"Responsive and trusted"

[KingAlanI]

That's also what my Chase card hit me with the one time I bought something form Canada.
(They probably made some money on the exchange rate as well, but so does PayPal)

Re:"Responsive and trusted"

[Falconhell]

I use Savings and loans credit uion in .au, low fees and good interest rates, electronic transfers and internet banking 24/7.

Re:"Responsive and trusted"

[TapeCutter]

"the brick and mortar branches just call the home office and sit on hold like everyone else."

I think that claim is utter bullshit, I've never expereinced it with any of the big 4 banks since I left HS 35yrs ago.

Re:"Responsive and trusted"

[mr_mischief]

I didn't say anything about anyone being absolutely responsive and trusted. I specifically said "more responsive to customer demands are, in my experience, more trusted by customers".

Notice the utter lack of superlatives.

Re:"Responsive and trusted"

[euphemistic]

This is pretty much exactly it. It's a matter of transparency, albeit perceived transparency and nothing necessarily to do with reality. With Paypal you transfer or get money, and upfront they tell you "this is how much is coming out of your bank account, we charge X for the exchange rate and Y for whatever other fee we have imposed.". The customer sees what the fees are, pays it, goes on their merry way and never hears about the issue ever again (in a normal case).

Banks on the other hand, well, they give you 5 pages of fine print which they can change at any time at their own discretion and tend to deal with longer-term money situations like loans and savings. Every quarter you get your statement in the mail with the 5 pages of fine print (or a hidden small sentence in 6pt font saying the fine print has changed and you should go look at it online) which may or may not have changed. Six months down the track you discover they now charge for using your bank account more than 5 times in a month, or the minimum account balance has doubled, or ATM transactions in certain random locations are liable for randomised penalties. And people get pissed because these are all essentially surprises. Sure, they were told in the 5 pages of fine print, but nobody carefully scours it for changes every single month - if they even realise something has changed in the first place. The banks know this, and they bank on it (pun intentional).

This has actually happened to me, and I'm always pretty careful about these things. I missed the small sentence saying the minimum balance has doubled on savings accounts - because it was surrounded by coupons for local businesses and information on home loans that don't apply to me at all. Suddenly I'm being docked every month for not being rich enough in one account.

Paypal may not exactly be the shining beacon of best business practise, but it's not hard to see why people are less fed up with them than the banks.

Re:"Responsive and trusted"

[Anonymous Coward]

Use their international customer service number instead. You usually get to talk to a person right away.

Re:"Responsive and trusted"

[jonwil]

I have found that if you (for whatever reason) cant or wont deal with PayPal and dont have any other options, Western Union is pretty good and their fees werent obscene last time I used them and its faster than sending mail (cash, money order etc)
Although it does require trusting the guy on the other end (but so does a money order or cash in the mail)

Re:"Responsive and trusted"

[Anonymous Coward]

PayPal... Responsive and Trusted? That's like saying "Obama, the bi-partisan, America loving centrist"

These would both be fine examples of oxymoronic journalism

The article author, "mask.of.sanity" should change his/her name to "veil.of. hallucination"

This whole article stinks like a rotten cheese ball, fermenting in a septic tank under a slaughterhouse...

Because they don't screw us as bad

[bgibby9]

Simple but true (for the moment) ;P

Not supprising

[XMode]

When you put up fees and interest rates well above the RBAs increase, make up some excuse about not having enough income and then post profits in the billions of dollars, people tend not to trust what you say.

Re:Not supprising

[John Saffran]

Agree entirely .. the really stupid thing about it all is that the only reason they do so is to pad the balance sheet and meet the unrealistic expectation that profits must go up each year. Anything less is a failure.

Because the big four banks are already so large, it’s impossible for them collectively to grow at a faster rate than the overall economy. For one bank to enjoy higher growth means that they have to market share off the other three, and the big banks appear deeply reluctant to do this.

It’s clear from recent comments made by the banks that they’re dissatisfied with the rate at which their lending is growing. And this is backed by recent statistics from the Reserve Bank which show that while total bank lending for housing is relatively strong, (rising by 0.6 per cent in August to reach a level that’s 8.1 per cent higher than a year earlier), total business lending actually fell by 0.4 per cent in the month (and was down 4 per cent from a year earlier).

Faced with weak lending growth, the big banks will only be able to continue to report increases in their profits year after year if they are able to maintain – and, preferably build – their interest margins.

But this means that the banks are inevitably on a collision course with the rest of the community.

http://www.businessspectator.com.au/bs.nsf/Article/CBAs-bold-move-may-backfire-pd20101103-ATSKH?OpenDocument

Re:Not supprising

[Anonymous Coward]

The fact that Aussie banks are extremely profitable is a good thing. It means the person running it knows something about business. That profit is a handy buffer if/when default rates go up, and it also means that your super is kicking along nicely (because almost certainly you have some in banks, probably 25% or so).

And the financing costs aren't imagined, they are real. The actual increase as been about 1.7 percent or so, and they've reclaimed about 1.4 percent through going above and out of sync with the RBA cycle. They aren't bad companies, they are just rubbish at communicating to anyone but each other.

Re:Not supprising

[MojoMagic]

Not just profits of 'Billions of Dollars', but RECORD profits year after year... During a financial crisis no less.

People aren't upset about the banks making a profit (that's what they're there for). They're upset because the banks continue to make huge profits and then hike fee/rates/etc all the while complaining that "It's getting more expensive to operate in this industry".

Boo hoo!

Re:Not supprising

[Anonymous Coward]

I want to know why the RBA's portion of the rate rise is good, wholesome and pure, but the banks portion of the rise is filthy, greedy capitalism.

If you want to run the country on credit (and there seems to be no intention of doing otherwise) then profitable banks would be considered a good thing, wouldn't they?

Re:Not supprising

[noisyinstrument]

Retail lending is only a small part of the business. And the cash rate targets set by the RBA don't reflect the capital costs of raising money internationally (where a fairly large amount of Australian debt is financed from).

Of particular note is that that the record profit made by Westpac of ~AU$6billion was on assets of ~AU$700billion. Which is a fairly terrible margin. Also Westpac has the worst debt to deposit ratio of any of the big 4 (aka it is most at risk). Maybe they'll keep some of that cash on hand to lower the risk or something?

I'm no expert but there is a hell of a lot of completely uninformed nonsense out there in the Australian public's mind.

Re:Not supprising

[quenda]

the record profit made by Westpac of ~AU$6billion was on assets of ~AU$700billion. Which is a fairly terrible margin.

It would be if it was their assets, but that number is depositors assets. Perhaps they fail to distinguish.

Re:Not supprising

[TubeSteak]

The fact that Aussie banks are extremely profitable is a good thing. It means the person running it knows something about business

In a competitive market, there's no such thing as "extremely profitable."
Competition is supposed to drive profits down from "extremely" to "normal."

Re:Not supprising

[Nazlfrag]

Aussie banks are extortionately profitable because they have been illegaly colluding for decades to monopolise the sector and marginalise any competition to the point they are scared of imaginary competition from two decidedly non-banks.

Re:Not supprising

[Anonymous Coward]

The banks are some of our biggest companies, so you would naturally expect them to make some of the biggest profits. Also, coming off previous years down turn you would expect this year to be one of the biggest increases in profit. Also given that the economy tends to grow year after year, you should expect the bank profits to grow year after year and continually make new record profits. Also note that here in Australia we are no longer in financial crisis and for us at least it was relatively short lived, so you would expect bank profits to be back to normal. People make all these vague emotional pleas about bank profits, lay it out for me and prove it with numbers.

Re:Not supprising

[noisyinstrument]

The assets are loans. Customer deposits are liabilities.

It helps if you know a bit about what you are talking about before criticising.

Physical access

[MichaelSmith]

With most Australian banks I can walk into a branch to address issues with my account. There are plenty of examples of people dealing with paypal and google where something goes wrong (say their account is suspended) and there is absolutely nothing they can do to make contact and fix the issue.

I don't think Australian banks should worry until their competition set up "bricks and mortar" premises.

Re:Physical access

[Datamonstar]

Walk up into Paypal HQ and be all like "Yo, gimme my account back!"

Re:Physical access

[John Saffran]

There'll always be people who prefer walking into a building to do their banking, but for the rest it's entirely possible to have a non-physical bank.

To take the example of ING, they used to rely purely on online and phone banking (ie. no physical branches period) but have now added the post office network for physical needs and rely on other bank's ATMs for physical money withdrawal. Of course an online bank would need to have excellent reliability on their online systems and excellent customer service on their phone centres, but if you have both then what's the big deal?

Frankly, if a bank is untrustworthy it doesn't matter whether they're physical or purely virtual .. to follow-on from your example, there's nothing to stop a bricks-and-mortar bank from closing your account and giving you the run around, being able to walk into a branch won't change that one iota.

Re:Physical access

[Anonymous Coward]

Yeah right. Try living in a rural area - Far North Queensland. All the big 4 banks pulled out of town 10-15 years ago and haven't been a physical presence since. Fuck 'em, they only care about the shareholders. The customers are now just consumers.

Re:Physical access

[jimicus]

I don't know about Aussie banks but in the UK, "walking into a branch" to address issues is about as effective as "walking into a tree". You almost invariably find yourself face-to-face with a mindless drone who can do no more than what computer says.

So if you need help with something and computer says no, so does drone.

The only effective thing I've found is to write a letter. These normally go to the few people left in the bank who can still read and write, and they're generally quite helpful.

Re:Physical access

[MichaelSmith]

I don't know about Aussie banks but in the UK, "walking into a branch" to address issues is about as effective as "walking into a tree". You almost invariably find yourself face-to-face with a mindless drone who can do no more than what computer says.

Definitely not with the commonwealth bank here in .au. The people who work there know their jobs are hanging by a thread and go out of their way to be helpful. One branch I go to has a triage person near the front door who gets the gist of your requirements then forwards you to second level people. The last person I dealt with finished the exchange by asking me to rate their performance. It looked like a standard part of the process. I have never known a bank employee to be less than completely helpful. They are about 1000 times better than the web site.

Re:Physical access

[pelrun]

Careful about tarring both Google and Paypal with the same brush here - Paypal has a long and gruesome history of being extremely quick to freeze accounts and confiscate funds and extremely (or impossibly) slow to release them, though here in Oz it's less prevalent because they're forced to *actually be a bank*. I don't think Google has been nearly as nasty in their similar role.

Re:Physical access

[daid303]

Walk up into Paypal HQ and be all like "Yo, gimme my account back!"

If that won't work, try again but bring a shotgun with you.

Re:Physical access

[mjwx]

With most Australian banks I can walk into a branch to address issues with my account.

Seeing as NAB (National Australia Bank) doesn't have a branch open on a Saturday within cooee of where I live (15 minutes from a CBD) and CBA's (Commonwealth Bank of Australia) list of fees and charges are ridiculous compared to NAB's. It not that easy.

If I do take time from work in order to go to a bank all I'll get is a form to fill out. Tellers are handy for opening accounts, deposits, withdrawals and most other activities that are now online but they cannot make decisions (by bureaucratic design, tellers aren't retarded). After that form is lodged I have to wait up to 28 days to see any action on it.

I dot consider Paypal trustworthy in any way but it seems they are trying to shaft us in fewer ways then the banks are. I do a lot of transactions in foreign currency, there are few forex services in Australia that deal with SE Asian currencies with a low flat fee. I am yet to find a bank that will do ATM or POS transactions for less then a flat $4 fee and 2% of the transaction amount (CBA is 3%). I have a friend who lives in Spain, he finds it easier to use Paypal to move currency into and out of Australia.

It's not all bad, as many other posters have pointed out the online systems are fairly good, reducing the actual need for me to take time off of work to go into branches.

Re:Physical access

[Anonymous Coward]

I don't think its just because their jobs are hanging by a thread but I was going to make pretty much the same comment as you about the Commonwealth bank. Its my main bank, I used to be with St George but they screwed me over with a direct debit so I closed that account and never looked back.

But the Commonwealth bank has been nothing but useful with any problems of any sort. I had a credit charge come out months after I accrued it (at a doctor and their cc processing was down so they did it manually), since I wasn't expecting it there wasn't enough to cover it. They charged me a fee for it ($50 or so I think). I went down to the local branch, explained what had happened and the nice lady there fixed it up, refunded the fee and was very polite about it.

If they would stop cranking up the fees and charges then I would be extremely happy with them...

Re:Physical access

[drinkypoo]

With most Australian banks I can walk into a branch to address issues with my account.

I don't know if things are substantially better in .au, maybe your institutions are still afraid of you crims, much more scary than failed puritans I think. But seriously, being able to walk into a bank doesn't necessarily help you. When I was being dinged with intentional unfair overdrafts by Wells Fargo, which was playing these games with failing to clear deposits until a check came through on purpose more than ten years ago and never got said boo to about it, I could walk into the bank and complain until I was red in the face and all I would get is a nervous security guard. A nervous armed security guard.

With that said, I wouldn't go to a major bank now period. I left WAMU when they were aggressively, illegally taken over by Chase with the aid of the US Government. (Numerous banks were in worse straits than WAMU but they're the one that "needed" to be managed by another bank? Fuck you.)

I *do* use Paypal on a regular basis. If I didn't get paid in cash so often I would probably use x.com as my bank. I have a local credit union, but I don't really like them; they're completely incompetent when it comes to security (your initial web banking PIN, for example, is the last four digits of your SSN, you know, the ones everyone knows because everyone has been asking you for them for years) and the tellers are too nosy. We're not friends; we could be one day, but not if you pry into my shit at this phase of our relationship.

Banks suck, they have an attitude that it's their money, and I disagree with them over it. Paypal freezes accounts all the time, sure. But frankly, I've never seen it happen without some dickery involved, and every story I've heard about paypal closing someone's account has begun with some shady transaction.

Re:Physical access

[TapeCutter]

My exprience with the NAB is similar but some people just like to piss and moan about banks the same way they like to piss and moan about taxes.

Re:Physical access

[delinear]

You don't think that maybe the fees and charges are what helps to pay for the exceptional service? I suspect the reason most people have a miserable experience with banks, or any business for that matter, is because they value cheap over all else, and you pretty much get what you pay for (and let's face it, there's little to distinguish a bank until something goes wrong, so for most people they'll avoid the bank with the higher fees even though they might be glad of the higher level of service one day).

Re:Physical access

[Bigjeff5]

See Wal-Mart.

If you're low on cash, cheaper is always better. Service doesn't mean shit if you can't afford to pay for it.

Re:Physical access

[KingAlanI]

the local bank tellers aren't really like that (even though I'm a frequent visitor), but a counter guy at the local pizza shop - please be quite, I just want my slice. (I admit I fed into that by chatting with him in the past; have you pretty much ignored the tellers' small talk)

Haven't checked the CUs

I am tempted to agree that some of the 'who lives, who dies' decisions made during the financial mess seemed arbitrary

Australias net banking is actually damn good

[SpazmodeusG]

Australia's online banking systems are actually really good. Better than anything I've seen in the USA.

Now before any fellow Australians mod me down for saying that let me just say I've spent some time in the US. We really do have it good compared to what I've seen of their systems. In the US if you want to view the full history of your online banking you have to seriously pay a fee. Americans actually think it's normal to not be able to download the past years account transaction history with a few clicks without paying for it. You can't download PDFs or CSVs of an account via the online banking systems i used in the USA. Direct deposit to other accounts isn't nearly as easy as it is here either - I'm sure i'm not the only one who buys goods from Australian websites via Australian Direct Deposit rather than a credit card or paypal service.

Disclaimer: Most of my experience has been with Combank but i know the other Aussie banks are similar - the online banking systems here are pretty damn good. Now if only the home loan rates were a bit more reasonable here in Australia (currently pushing over 7% and rising).

Re:Australias net banking is actually damn good

[Ihmhi]

American here.

This is not true for all banks. We have hundreds of banks and at least a dozen "large" ones, all with differing policies on things like your transaction history.

Most banks offer at least 3 months - 1 year of your account(s) history through their online database. This is for a free checking account from my experience. Beyond that you can only get the document in paper and you have to pay for it.

Granted, this may seem like they're nickel-and-diming their customers, but banks generally make money from either interest on loans or fees. Hell, American banks used to rake in something close to USD$10bn every year just from overdraft fees; now that a new federal law requires explicit permission for "overdraft protection" to be used (i.e. let a charge go through and stick you with a USD$35+ charge, effectively a microloan with a very high rate), I imagine that this particular area of profit will go down.

Re:Australias net banking is actually damn good

[cheater512]

ANZ's electronic statements get stored for 7 years. While its not as good as the direct transaction history (3 month max), thats still pretty good.
Oh and the 3 month max also applies to exporting to a large variety of formats including csv.

Re:Australias net banking is actually damn good

[cyssero]

American here.

Most banks offer at least 3 months - 1 year of your account(s) history through their online database. This is for a free checking account from my experience. Beyond that you can only get the document in paper and you have to pay for it.

To put it into perspective - the Commonwealth Bank of Australia offer 7 years of statements online for free - even on fee-free accounts. They also allow you to search for previous transactions freely. They probably charge to print out a copy and send it to you, but with online statements going back that far and the ability to export to PDF and CSV - most people easily avoid the fee.

Re:Australias net banking is actually damn good

[SpazmodeusG]

Yeah that's still not exactly great by Australian banking standards. I just checked and went back 7 years on my statement history without any hassle on my net banking. I'd be pissed if there was a 1 year or 3 month limit.

Overdraft fees used to be an issue here but many Australian banks scrapped them after one did it and the rest followed.
http://www.abc.net.au/news/stories/2009/07/29/2639350.htm

So we have it pretty good here in some ways. The home loan rates being through the roof is the main issue though.

Re:Australias net banking is actually damn good

[metrix007]

Nah. I'm Australian and have a current account with ANZ and CUA, and used to have an account with Suncorp. In the US I have been with BoA and Chase. I can have transaction history for any period I choose, for free, and if I go into a branch the fee might be $2 or so, same as in Aus.

The main area the US is behind almost every other country in is direct deposit. I can't easily send money to someone elses account. Most countries have some equivilant of our BSB/account number setup, but not the US. Hell, they still have to use checks for most stuff.

The other interesting thing is that when paying with a visa/mc debit or credit card....no one checks for id, I don't need to put in a pin nor sign anything. If you steal someones card then its free reign till its called in and cancelled. I find that interesting.

Re:Australias net banking is actually damn good

[kramulous]

Ahh but you can't download a years history.

Since going debt free and actually earning interest rather than paying it (as well as share market), I have made a big mistake. I forgot (got sloppy) and stopped recording every bank transaction, credit card transaction and high interest savings account transaction I ever make. I have an issue with an energy company that I corrected in January but because another action has happened, the computer systems didn't register the original error. Now I have to prove it all again but this time, I have lost the transaction history. I'm missing the crucial 2 months. It will end up being a $161 error. The maximum I can get is 90 days.

I'm screwed. I realise that IT systems are 'challenging' but tracking a million transactions per customer can't cost more than the $5 per month I currently get charged (officially although I don't pay given I demanded they earn enough out of me anyhows).

Re:Australias net banking is actually damn good

[Anonymous Coward]

It's the opposite for me. I grew up in America and now have been in Aus for 2 years. And in my experience, American banking was superior (but not by much).
 
Australian Central Credit Union charged pretty high fees for just a basic checking account with a "savings" card. A few dollars per month for the thing, and you were allowed free transactions when using it on ACCU ATMs; using it at a store as an EFTPOS transaction cost $0.50 per transaction. We got a Visa debit card and used it as a credit card to avoid the per-transaction fee (were allowed to use it twice per month as EFTPOS at EFTPOS stations for free, after that it was $0.50 again). But we still paid a monthly fee for the card. I looked into some more of their different types of accounts but none of them were very good compared to ANZ, and that's who I'm with now.
 
In America I swore by credit unions: by default they were set up with customers in mind. I was with San Diego County Credit Union and paid I believe it was $10/year for a checking and savings account. A Visa check card attached to it was free. I could transfer money in between my accounts online, and could print out/save all my history in .xls or CSV. I could even see what transactions hadn't yet completely processed.
 
  Back to ANZ, I still can't right now see what transactions are being processed on my Visa debit card. I can see there's a difference between my "availible" and "current" balance, so I know things are processing, but I have to wait a few days before seeing what it was in my online statement. I can export my history just like most places. ANZ is charing me $2/month for my accounts (1 "EFTPOS enabled" savings, 1 5% interest savings, and 1 for the Visa), and I then I paid about $20 tax on the interest I earned last year. (I earned about $250 in interest last year). And that's all I'm paying in fees. I think ANZ is trying to add the ability to see what is being processed, but maybe it isn't working right just yet.
But I was doing all this stuff in America over 10 years ago. And in my situation, the big bank ANZ is offering much more for much less than a credit union. A sad state of affairs.
 
  I keep joking that ACCU should ditch their yearly christmas parade and instead offer lower fees to their customers. Oh well.

Re:Australias net banking is actually damn good

[drinkypoo]

Americans actually think it's normal to not be able to download the past years account transaction history with a few clicks without paying for it.

It's worse than that, less than a month ago I suggested that we should pass a law stating that the banks would have to permit this — I made the point that it's your data, after all. I got down-modded and called a commie. People seemed to think that it would be somehow arduous to store a few kB per customer on something web-facing. These are the fuckers who are stealing our money and taking it out of the country as fast as they can. And then there's the bailouts... No sympathy for the bankers.

Re:Australias net banking is actually damn good

[Arcorn]

I'm from Australia, using the same Internet banking service as SpazModeus which is the Commonwealth Bank's netbank. I can get, I think, 7 years of statements for free. They come as PDFs so I can print them up if I want a paper trail.

Re:Australias net banking is actually damn good

[drsmithy]

Australia's online banking systems are actually really good. Better than anything I've seen in the USA.

Australia's banking systems are so far ahead of America's it's not even funny - and that's before even getting into the absolutely bonkers US credit system.

Re:Australias net banking is actually damn good

[TapeCutter]

Aussie here, totally agree the online banking is pretty good but historically speaking, (last 30yrs), a 7% home loan is relatively cheap. If there is one thing I would change it would be to ban all fees, let them compete on interest rates alone, it would make it easy for the consumer to compare and would eliminate the main source of disputes and complaints.

Re:Australias net banking is actually damn good

[Greyfox]

The big name brand banks know they can get away with just about anything, and they usually try. I switched to a credit union about a decade ago and have been quite happy with them. I haven't seen any of the shenanigans that the big banks are known for, and they have branches all around the area with quick and easy customer support.

Given that PayPal isn't regulated, I'd be inclined to trust even a national name-brand bank over them. I trust local credit unions a lot more than that, though.

Re:Australias net banking is actually damn good

[kevinNCSU]

What American bank were you using and in what year? All the ones I've used have offered all the online services (other than free transactions between banks) including viewing old account transactions and statements in PDF format and viewing scanned copies of checks that you have written and have been cashed against your account. They also mostly all offer online bill pay so you don't have to mail the checks yourself, even to just a friends address if you owe them some money for a bachelor party or something.

The rarity of free online transfers between banks is somewhat annoying, but I think it's starting to catch on so hopefully it will become more common. But if you use ING you can use them as a go-between but it just takes longer so you have to plan things ahead of time.

Re:Australias net banking is actually damn good

[Anonymous Coward]

Aussie in the US here,
There's an amazing amount of culture shock with things that you wouldn't even think would be done differently.

The reason why Direct Deposit is virtually unheard of in the US is because their banks are really lacking in account security.
So much so that all you need is the account number, because the banks assume that only the account holder knows the account number.
As such, no one gives out their account number, so direct deposit isn't plausible, and they look at you like you're insane if you suggest it.

Additionally, it's virtually impossible to stop banks in the US from giving out account information to family members.
Hell, you don't even need to be a family member. "Hi, I'm Joe's roommate and I just wanted to check his balance before I cash the rent cheque he gave me" works fine.

Re:Australias net banking is actually damn good

[Bigjeff5]

We really do have it good compared to what I've seen of their systems. In the US if you want to view the full history of your online banking you have to seriously pay a fee.

Uh.. Born and raised in America here, and I've never heard of this. I'm not sure how far I can go back, but I must assume it's the full history. I've done more than a year at once before. No fee at all. All but my yearly statements come in through my email, too.

You can't download PDFs or CSVs of an account via the online banking systems i used in the USA.

No PDFs, but PDFs aren't very useful. I can download my account history in MS Money format, three different Quicken formats, two QuickBooks formats, and good 'ole CSV.

Direct deposit to other accounts isn't nearly as easy as it is here either.

I don't get this, all the depositor needs is the bank account and routing number for the bank. It's stupid easy.

On top of that, free checking, free check card (or debit card if you prefer), free automatic bill pay (especially easy if the biller has a relationship with the bank, but it will mail checks for you if not), free check images, etc. Honestly I don't pay any fees at all. Oh well, there is a fee if you drop below $5 in your checking account (which hasn't happened since I was in high school), but otherwise none. I guess they make all their money on loans and credit cards (both reasonable, but not the lowest rates I've ever seen). I even have my auto insurance through my bank, and it's a pretty good rate.

I really have to wonder what kind of hellish bank you used while you were here. I'm sure such banks exists, but I've never used one.

Re:Australias net banking is actually damn good

[Cimexus]

Australian and American dual citizen here with multiple bank accounts in both countries.

You are right. The banking SYSTEMS in Australia are light years ahead of those in the US:

- In Australia you can send money via online banking, for free, to any other Australian bank account (direct deposit). All you need to know is the account number. It's how I paid my rent and some bills for many years. It's not instant but typically the delay is only 1 day for an account at the same bank and 2-3 days for any other bank.

- In Australia you can pay virtually any bill with Bpay. There's no real equivalent in the US. Sure there are a couple of similar systems I've come across ... but they are each completely unrelated to the other, have no interoperability, and virtually noone uses them. You end up having to sign up to several of these systems just to pay a single bill. What makes Bpay work in Australia is the fact that it's THE bill payment system, and EVERYONE uses it.

- EFTPOS in Australia (i.e. payment via debit card + PIN): much more widely accepted in Australia than the US. Even someone sitting in a temporary stall on a street corner accepts EFTPOS in Australia, whereas in the US it's really only medium to large stores, in my experience. And many won't let you do 'cash out' (i.e. pay for a $50 item with a $100 debit, and get the remaining $50 in cash, avoiding a trip to an ATM).

- Due to the above, cheques/checks have gone the way of the dodo in Australia many years ago. I had never SEEN a check in my life before I started living in the US. My parents got rid of their checkbook in the 80s. But in the US they are still very common, and in some areas, almost ubiquitous (I see people using them at supermarket checkouts for God's sake!). It's ridiculously antiquated but Americans seem to love them.

BUT ... Aussie banks do make ridiculous profits and the focus of this article is more that they have higher fees than in most countries, and tend to nickel and dime you any chance they get. Which is very true. The big four banks certainly could use some more competition. But it's not like they have none - there are plenty of smaller banks and credit unions that are competitive in Australia. But the downside of that of course is that their ATM network is far smaller. I think that's why most people stay with the big four in Australia - free ATMs everywhere you go. Whereas if you sign up with, say, Bankwest or Bendigo or something, you really have to plan ahead when you want to take cash out. Case in point: I am in Canberra quite a bit and I have a Bankwest account. The nearest Bankwest ATM is in Wollongong (lol). Sure I can use Commonwealth ATMs for free for cash withdrawal, but for anything else (e.g. changing my PIN, deposits etc) I have to travel a looonnng way ;)

Oh and PS, as an Australian, I will NEVER trust PAYPAL with any significant amount of money. They have twice frozen my account for no reason other than the fact that I had logins from different countries within a day or two of each other (did you know that there are these things called PLANES?). Once I can understand. But it took a week to get it unfrozen and I even told them explicitly on the phone that I was a dual citizen and flipped between the US and Australia all the time. And they STILL locked my account for the same reason less than a month later! Argh. PAYPAL are scum.

Re:Australias net banking is actually damn good

[Cimexus]

Regarding not being able to see Visa debit transactions for a day or two: this is normal in Australia, and nothing to do with the banks. Visa simply hasn't provided the information yet. My bank (Bankwest - which isn't a credit union but has much lower fees than the big four, even though it's actually owned by Commbank) simply shows it as 'VISA DEBIT PURCHASE $x.xx' for a day or two before the real details appear.

Use proper EFTPOS (i.e. swipe, select Savings, enter PIN) rather than Visa debit (which is really just presenting itself to the system as a Visa 'credit' card - the system doesn't know or care that the funds are actually coming from a savings account rather than credit). EFTPOS transaction details show up instantly on online banking. As in, by the time you've walked out of the store, across the road and into your office again, you can log in and it will have the full transaction details already there and accounted for.

Re:Australias net banking is actually damn good

[jonwil]

Not all .au Credit Unions are bad.
I am with Police and Nurses and the only fees I pay are a $1.50/month fee for having a visa debit card and a 0.75c/month fee for Netbank.
I can make as many transactions as I like via EFTPOS, online transfer, Visa payment or withdrawal from any ATM that says "RediATM" or "NAB" on it.
I do have to pay a fee if I go to someone elses ATM but the RediATM network is so large (especially since they joined up with NAB) that I can usually find one.

Oh and I believe I pay a fee if I buy something with the Visa card that isnt in AUD but I think Visa charge that, not the bank.

Re:Australias net banking is actually damn good

[Anonymous Coward]

" In Australia you can send money via online banking, for free, to any other Australian bank account (direct deposit). All you need to know is the account number."

You don't even need an account number these days! Check out ANZs mobile app- Go Money.. you can now transfer money via mobile number.. and instantly for other users of the app..

bloody brilliant really.

What?

[LordLucless]

This article doesn't even make sense.

If Google got up and said we are going to offer a savings account, for me, that would be very difficult and confronting

Yeah, well, if Google said they were going to offer a used car service, that'd probably be difficult and confronting for a whole bunch of used car salesmen. There appear to be no plans in that direction, and it's an industry that makes absolutely no sense for Google to get into.

Moreover, comparing banks to PayPal is disingenuous. They don't do nearly the same things. PayPal is a transaction broker. They compete with VISA and MasterCard, if anyone. They don't offer investment accounts or mortgages - and those are the functions that people most seem to care about. Transaction accounts? Barely a blip on most people's radar, I think.

Re:What?

[nospam007]

"PayPal is a transaction broker. "

Paypal is a bank.

"As of July 2007, across Europe, PayPal also operates as a Luxembourg-based bank."
https://secure.wikimedia.org/wikipedia/en/wiki/Paypal

Re:What?

[Anonymous Coward]

Yes, and there are many reasons it is in Luxembourg and not other EU countries.
Sorry, I prefer a bank which at least has a subsidiary based in my own country and has to comply to local banking regulations.

Re:What?

[rudy_wayne]

"PayPal is a transaction broker. "

Paypal is a bank.

"As of July 2007, across Europe, PayPal also operates as a Luxembourg-based bank."
https://secure.wikimedia.org/wikipedia/en/wiki/Paypal [wikimedia.org]

"In the United States, PayPal is licensed as a money transmitter on a state-by-state basis. PayPal is not classified as a bank in the United States, though the company is subject to some of the rules and regulations governing the financial industry including Regulation E consumer protections and the USA PATRIOT Act."

https://secure.wikimedia.org/wikipedia/en/wiki/Paypal

Re:What?

[Captain Hook]

There appear to be no plans in that direction, and it's an industry that makes absolutely no sense for Google to get into.

No, I can't see any reason why a company would like to be able to see all the transcations that a person makes, online or offline. Nope, no reason for google to get into that market at all.

Re:What?

[jonbryce]

I'm pretty sure they are an electronic money issuer rather than a bank, which means you get less protection, and also means they aren't allowed to take so many risks with your money.

Re:What?

[MichaelSmith]

Yeah, well, if Google said they were going to offer a used car service, that'd probably be difficult and confronting for a whole bunch of used car salesmen. There appear to be no plans in that direction, and it's an industry that makes absolutely no sense for Google to get into.

Google checkout seems to put them in the same market as paypal.

Re:What?

[LordLucless]

As PayPal, yeah. But PayPal isn't in the same market as banking. People's transaction accounts are a minuscule part of a bank's operations. There core business is more money management - loans, mortgages, investments, speculation - that's where the money is. And that's nowhere near Google's core competencies.

Re:What?

[Machtyn]

Who cares what Europe and the US think! This article is about Australian banks. How does the Australian government classify Paypal?

i.e. you're both right, Paypal is a transaction broker in one place, a bank in another place, but neither of those places is the subject of the current article. ;^)

Re:What?

[Anonymous Coward]

But what about on Mars?

Re:What?

[Bigjeff5]

True, but this is an American website, so we always frame the discussions from an American perspective.

Re:What?

[Nazlfrag]

From their product disclosure page: "PayPal is licensed by the Australian Prudential Regulation Authority as an authorised deposit-taking institution authorised to provide purchased payment facilities." So yeah, they're whatever that means.

Re:What?

[Nazlfrag]

From further down it states:

... If you hold a balance in your PayPal account, your funds will be pooled with money from the PayPal Accounts of other customers and deposited by us with a licensed bank in Australia. This does not effect your rights to withdraw funds from your PayPal Account. We will hold your funds separate from our corporate funds and not use your funds for our operating expenses or any other corporate purposes.

So it looks like they aren't quite a bank, they just need to keep any deposits in a real bank, seperate from their corporate account.

Google is no threat

[Anonymous Coward]

If Google's non existent support of the Nexus One is anything to go by, the Big4 have nothing to fear from Google.

All I can say is...

[SeaFox]

Australia's banks must be pretty bad if people trust PayPal more.

Re:All I can say is...

[Ihmhi]

Paypal: we keep your money so safe, sometimes we don't even let you touch it!

Re:All I can say is...

[TheTurtlesMoves]

Paypal: we just keep your money.

Re:All I can say is...

[ushere]

obviously you don't live in australia ;-(

Re:All I can say is...

[garry_g]

My thought exactly ... I still don't see how PayPal got their status of being a Bank in the EU (Luxembourg to be exact). The way recipients of money are treated sucks big time ... (as someone who to date has only sent money through them, I do not have any complaints yet, luckily ...)

Re:All I can say is...

[jimicus]

They didn't have a lot of choice.

Though I would point out that a big problem (in the UK at least) is that while banks are regulated in theory, it would appear that they can be as damn useless as they like and as long as there are processes in place to deal with it, it doesn't matter.

Even if the processes themselves are damn useless, it still doesn't matter.

Even if the processes are still damn useless after several years have gone by with ample opportunity to fix them, guess what? Doesn't matter.

Re:All I can say is...

[drsmithy]

Australia's banks must be pretty bad if people trust PayPal more.

Based on my experiences in Australia, the UK, Switzerland and the USA, Australian banks are _excellent_, relatively speaking.

This is just another aspect of a recent media beat-up of the banks in Australia, spurred on by sob stories about people irresponsibly over-extended in their mortgages. Most people have no concept of how lucky they are in Australia, from a banking perspective.

Re:All I can say is...

[Bigjeff5]

Yup, as long as they technically comply with the regulations it's just bad service and they can't be punished. They might get in trouble if it can be proven that they are using poor service as a way to harass their customers, but it's extremely difficult to distinguish poor service from intentionally poor service as a means of harassment.

Re:All I can say is...

[jimicus]

Indeed. I've worked in big, regulated companies before and the attitude to almost anything significant was more likely to be "What is the minimum we need to do to comply with the letter of the regulation?" rather than "How can we best do this to serve the customer while remaining competitive?".

Of course they are in collusion.

[VShael]

They are BANKERS.

Why it isn't a given that Bankers will break the law to make money? It is universally true by observation, even if we can't figure out how to prove it empirically.

Re:Of course they are in collusion.

[Celarent Darii]

[quote] It is universally true by observation, even if we can't figure out how to prove it empirically[/quote]

I don't know if you are serious or joking, but it's funny in any case:

<citation = "http://en.wikipedia.org/wiki/Empirically">The word empirical denotes information gained by means of observation, experience, or experiment.</citation>

Re:Of course they are in collusion.

[VShael]

As much as I might hate bankers, yeah, it was supposed to be a joke. Sorry, it's early, and I haven't had coffee yet.

Re:Of course they are in collusion.

[Crypto Gnome]

Only a joke in the sense of being TRUE , but still funny.

While they might not have colluded in the legal sense, they have colluded in the practical sense.

Why the law defined it as "all of their CEOs had to get into one physical room at the same actual time and at least verbally and preferably written down on some kind of physical medium, they agreed to follow a common set of practices in order to screw the market over".

The end result is the same, The Banks have NO REAL COMPETITION and NO LEGAL ENFORCEMENT preventing them from SCREWING THEIR CUSTOMERS *to an unreasonable extent*.

Seriously folks, I'm all for "they're a business, they need to make a profit" but continuing to make *record profits* during the GFC AND still continuing to whine about HOW HARD IT IS BEING A BANK is just a tad unbelievable.

Australian Banks Are Terrible

[Anonymous Coward]

I lived in Australia for a couple of years in the late 90's, and of the few things (the only thing?) that I would say was worse in Oz than in the States were the banks. I can't say how things are now, but at that time the banks actually assessed a fee to make a deposit! And that was pretty representative of how they operated. I hated our bank, but others were just as bad.

Re:Australian Banks Are Terrible

[MichaelSmith]

How much is the US Bank bailout costing you, personally?

Re:Australian Banks Are Terrible

[MojoMagic]

Hmmm... Yeah. That used to be true.
It's a lot better now, though.

My current bank (well, credit union. But they are aesthetically the same to me.) doesn't charge me any* fees on my normal accounts and offers ~5% interest on my online-only savings account**.

Though, I keep my savings and credit accounts with separate institutions because I'm paranoid...

--
*At my usage levels, which are pretty normal-use.
**Transferring between both accounts is free.

Re:Australian Banks Are Terrible

[Cwix]

http://online.wsj.com/article/BT-CO-20100930-716142.html

Looks like only 50 billion.

It also looks like we might actually make money from tarp

http://www.nytimes.com/2010/10/01/business/01tarp.html?_r=1

the $700 billion lifeline to banks, insurance and auto companies — will expire after Sunday at a fraction of that cost, and could conceivably earn taxpayers a profit.

Re:Australian Banks Are Terrible

[pelrun]

Yup, aussie banks treat us customers like walking cash machines. Deposit? Fee! Interest? Fee! Showing up at a branch? Fee! Record profit for nth year running, literally a not-insignificant fraction of our total GDP? Fee increases across the board!

Re:Australian Banks Are Terrible

[Arcorn]

Wow, you sound like you are with a crap bank. I have a general savings account at the Commonwealth, the only fees I get against my account is when I don't use a Commonwealth ATM(Inconvenient, like really.) and on some direct debit transactions. I don't have any account keeping fees and I have the option to have a 6% interest savings account on the same account.(Which I am going to make use of once I get my cheque for unused insurance)

Re:Australian Banks Are Terrible

[Cimexus]

It has got better since then, but as someone who has accounts in both Australia and the US, let me ask you this question:

Which would you prefer:

- An account where you might be paying $5 of fees per month, but is generating interest at a whopping 5%+ right now, even for a standard transaction account; or

- No fees but zero interest.

My Aussie accounts are generating me $600+ a month PURELY in interest! I can overlook a couple of small fees. My US accounts pay nothing. Now of course this is partly because official rates right now in the US are essentially zero ... but even in the good times, US banks simply don't pay any/significant interest for standard transaction accounts. Even their 'high interest' accounts aren't as nice as the Australian ones (even if official rates are identical in the two countries). Bonus: at the moment, the AUD is worth MORE than the USD (1 AUD = 1.015 USD). This is a far cry from the 90s when the Australian dollar was only worth 50-70 US cents.

And as a matter of fact, many banks in Australia now attract no fees at all (I use Bankwest, and provided I keep a token minimum balance in there, I have no account fees, no deposit fees, unlimited withdrawals). Things ARE a lot better than the 90s (not just in banking either - Australia has boomed during the 2000s, as a country it has progressed an unbelievable amount in the last 10 years and is still booming - no financial crisis here!)

Re:Australian Banks Are Terrible

[Anonymous Coward]

Back then we weren't getting any interest either, or it was abysmally low. This was at Commonwealth Bank. I really loved Australia and there were very few things that I would have said worked better in the U.S. than in Oz. In fact, I'm having a hard time thinking of anything but the banks right now. But the banks were just bad, awful, atrocious, horrible, soul-destroying, as-bad-as-my-current-cable-and-cell-phone-companies. I'm happy to hear that they at least pay interest now.

Re:Australian Banks Are Terrible

[Cimexus]

Yeah now that I think about it, you are right. You used to get essentially no interest in AU banks in the 90s.

In 2002, ING Direct came to Australia though. They shook the market up massively with their high-interest, online-only account. They were the first well-known such account in Australia ... I remember signing up in 2003 and was sceptical at first but, wow, it was awesome.

In the next few years a bunch of ING-like competitors surfaced. And by around 2006-07, EVERY bank offered such high interest accounts. The big four were the last to offer them, but they had to cave into pressure eventually. Commonwealth Bank's is the NetBank Saver: http://www.commbank.com.au/personal/accounts/netbanksaver/

So your assessment of Australian banks in the 90s is pretty accurate ;) They sucked. But they are a hell of a lot better now.

Raise Rates?

[ikkonoishi]

Is high interest bad? Doesn't that mean that they give higher returns on deposited money or is this just the interest on loans?

I can see that if the banks can raise the interest they charge on the money they loaned out alone that collusion would be a problem since otherwise the customers would just refinance with another bank with lower rates. If they all work together the customers don't have anywhere else to go, but I would think that if they all raised rates then unless there was some legislative block on credit union type places popping up to attract customers away that they would be limited by the chance of bank runs.

Re:Raise Rates?

[kramulous]

I'm currently earning a 6.51% on the cash that is not invested (probably will raise another 0.25% at least in the next few weeks). So, you are right. I am earning a nice, guaranteed rate on idle cash deposits. Not as good as shares, after the biggest drop in 80 years, but a bankable rate.

It's a predictable two edged sword ... those that are debt addicted suffer, those that are not are happy.

Re:Raise Rates?

[Fantastic Lad]

those that are debt addicted suffer, those that are not are happy.

Everybody is 'debt addicted'. Even you, though it sounds like your vision might be too narrow to recognize it.

Money creates debt through its very existence. It's impossible for crippling systematic debt not to accrue. That's just how it is. It sounds like you've managed to be among the small percentage able to dance a little faster than everybody else on the shrinking number of ice cubes, but as the whole thing slides under it will have been wise to make sure you weren't too smug or Darwinian in your thinking to have created bonds of trust and support among the members of your community.

-FL

Re:Raise Rates?

[Mr0bvious]

Please tell me who gives you this rate? I'm wanting to move my deposits as my bank has just dropped my rate to 4.6% pffft!

Re:Raise Rates?

[kramulous]

ubank

It is one of the few sites that can be entirely setup online (no posting of signatures). Their online site and internet banking is not that great but they do offer the good rates.

The base rate is ~6% but if you setup automatic debit from another account you can get the extra 0.5%. I have it automatically transfer $300 to an account that then automatically transfers back into ubank to get the extra basis points.

Re:Raise Rates?

[Mr0bvious]

Ah, thanks... Moving my deposits asap!

Re:Raise Rates?

[Anonymous Coward]

Question: is a person who doesn't have a spare $300,000 sitting around to buy a house and takes out a mortgage to pay for it now debt addicted?

Re:Raise Rates?

[kramulous]

In my view ... yes. You will save 300K faster than you will pay off a 300K loan (and that includes renting, bills, etc.). You will save 25K faster for that car than pay off a 25K loan. So why do it? It has to be addiction. If it isn't then the only other thing I can think of is stupidity.

Just because going into debt to buy a house was the way our parents did it and their parents did it doesn't mean it is still a good idea. Yet parents will still continue to tell their kids that buying a house is the best thing you can do with your money. Well, it was, for them. I think a few things need to change in the Australian mindset ... the idea of "The Australian Dream" has been marketed to us ad nauseam. For the benefit of who? Not you and me, that's for sure.

The financial landscape has changed considerably in the last decade. I have been on both sides (rented and mortgage) and have examined *every* dollar involved (and cent - got down to needing to know at what time of the day the bank charges/pays the daily interest) and there was a clear winner ... save money in the bank and earn whatever interest you can given your level of risk and pay rent. I have my target number that when I reach it, I'm pulling out of the rat race. I want to reach it as fast as possible and paying off a mortgage will mean that I won't ever hit that number (not before I'm 67 anyhow).

But people continue taking out loans that will cripple them for years. Everyone I know who has gotten married in the last 10 years have had this in mind ... "Must have a car, must have a nice wedding (average Australian wedding costs $36,000), must have a house". No actual in-depth bookwork is done that would reveal that it is much better to earn interest than to pay interest. Every time the rates increase, the difference between the two camps widens by 2x the increase (now the opposite was also true, but how long did that last?). When will the penny drop? Probably never given how bad at money management everybody I know is.

Oh, and I don't have any stress. That baseline stress level of knowing that I owed that much money just isn't there. The stats don't lie ... the number one reason for relationship breakup is financial. I refuse to be part of that statistic. /End Rant ... Sorry :)

Errrrm...

[Stooshie]

Aren't the banks kind of daft on this one? Trust has always been the main issue with banks since the first bank was ever set up and asked to look after your valuables/money.

Different expectations

[dugeen]

People trust Google more (if indeed they do) because they expect less from them. Google's free services promise nothing (in a legal sense) but usually deliver an acceptable service; banks have definite legal obligations which they often fail to meet. If you have to deal with Google in an IRL sense (trying to get them to fulfil their data protection obligations, for example) you'll form a different impression - you might well prefer to be on the phone to a bank's Indian call centre, staffed by people who can't understand you and couldn't help you if they could.

Paypal ?!

[nstlgc]

You know something is wrong when Paypal is more responsive and trusted than your own bank...

I trust Google...

[aceofspades1217]

more than banks hands down. My family are invested in a regional bank and I just got an e-mail stating that they are ending my free checking and that if I don't deposit more money they will charge me $5 a month.

Google may not be perfect and they screw up sometimes but they are the kind of screw ups you glance at shame on you and move on. I mean sure they were taking public wifi data but cmon' it was public data and it was just random packets so that they do location services. Heck, I have an incredibly hard time finding unsecured networks as almost all routers nudge users to security a lot more then they used to. My friend's aptartment has no internet and there are 15 wifi networks and all of them are secure.

Anyways, how can credit unions be shamed for "collusion", they aren't even a for-profit company. Credit unions are the closest thing the banking sector has to a charity so saying they are colluding is like saying the United Way, Red Cross, and Goodwill are colluding for holding joint event.

Google already work like a bank

[jlebrech]

They are agressively investing in smaller firms that have the potential to make a profit.

They just need to open that strategy to smaller ideas and the banks are in trouble.

Google Store!!

[TaoPhoenix]

You just found it!

Can you imagine going into a mall to a Google Store to fix settings on your gmail, try out Something In Beta(tm), get a 10 second really weird search result printed out for you in some nifty way ...

Re:Google Store!!

[MichaelSmith]

Google sent a letter (on paper!) to my wife's business. It had a real letterhead with the google logo on it. They were trying to sell advertising. It was the first physical "google" thing I ever saw and it caused a moment of cognitive dissonance. Very strange.

Paypal "responsive and trusted"?

[Ritz_Just_Ritz]

Those aren't words one would usually hear associated with Paypal. Their customer service is rather poor in my experience so I shiver to think what bank customer service must be like in Australia.

Re:Paypal "responsive and trusted"?

[phorm]

Hmmm. I had some friends comes from Aus to Canada and they commented on how good the customer-service was here. Since the last couple times I went to the US customer service was fairly similar to here (possibly better in US restaurants, they depend a lot more on tips), I'd guess that Australia tends to run into sucky service in a lot of places.

I've been to Aus once and it didn't seem that bad, though a bit hurried and less polite, but as with anywhere I'd imagine that YYMW depending on where in the country you are.

Re:Paypal "responsive and trusted"?

[Bigjeff5]

YYMW

Ok, I could not find this anywhere, what the hell does it mean? It's obviously synonymous with YMMV, but I can't find the acronym anywhere.

Re:Paypal "responsive and trusted"?

[phorm]

It goes along with TLCTSC (Too Little Caffeine to Spell Correctly). Just a typo on my part...

Banks?

[Anonymous Coward]

More "...responsive and trusted than banks..." really? hands up if you trust a bank

PayPal? Trusted? Huh?

[creed_nmd]

If PayPal are more trusted than the banks that makes it very clear just how bad the banks are. I wouldn't trust PayPal with toy money my nephew left down the back of the sofa.

Wait a sec...

[Syberz]

People think that banks are in collusion? But... that's unpossible!

Pfft, next they'll tell us that big oil is doing price fixing at the pumps...

Collective noun problem

[kipling]

The scenario

... all of their CEOs had to get into one physical room at the same actual time ....

will never happen. Bankers are cautious of the collective noun "Wunch" becoming common. So they avoid any situation where it may be appropriate.

More responsive than Google? than PAYPAL?

[thisisauniqueid]

...if so, then banks have a very, very big problem.

I feel bad for Australians.

[Shoten]

I gotta say, if Australian banks are LESS responsive than PayPal...holy crap. I'd rather keep my money stashed up a crocodile's butt than give it to PayPal. It'd certainly be easier to get at.

Threatened by their own Bastardy, primarily.

[Anonymous Coward]

"Lack of responsiveness" is a bloody euphemism. Australian Banks are threatened by their own bastardry,
particularly to their least powerful customers.

They charge the worst fees to the people least able to afford it, people who must use them to receive wages or welfare.

One bank even tried to rig a satisfaction survey by getting their own employees to vote positively for it!

A Taiwanese friend remarked that if Taiwanese banks behaved the same way to *their* customers, it would not be tolerated.

They deserve the contempt they get. Thankfully there are now class actions happening.

The trouble with non-bank banks

[Animats]

The problems with PayPal are well known. PayPal should be regulated as a bank in the US, so customers have recourse to banking regulators when PayPal is holding the customer's money against the customer's will.

Not that PayPal's competitors are better. WePay got press by putting a block of ice with money inside in front of the PayPal conference. But they have miserable customer terms, like PayPal:

• You may not transfer or assign any rights or obligations you have under this Agreement without WePay's prior written consent. WePay reserves the right to transfer or assign this Agreement or any right or obligation under this Agreement at any time. That's backwards, since they have your money, and you don't have their money.
• You agree that WePay, in its sole discretion, for any or no reason, and without penalty, may suspend or terminate your Account (or any part thereof) or your use of the WePay Services and remove and discard all or any part of your Account at any time. Discard your account? With your money in it? That's what they're saying. Banks have to immediately refund your money if they close your account.
• IN NO EVENT SHALL WEPAY, its EMPLOYEES OR SUPPLIERS BE LIABLE FOR LOST PROFITS OR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN CONNECTION WITH OUR WEBSITE, OUR SERVICES, OR THIS AGREEMENT (HOWEVER ARISING, INCLUDING NEGLIGENCE), UNLESS OTHERWISE REQUIRED BY LAW. Banks can't get away with that.
• WePay reserves the right to change, modify, add, or remove portions of this Agreement (each, a "change") at any time by posting notification to the WePay website or otherwise communicating the notification to you. That's out of line for a bank-like service.
• Any Claim between you and us shall be resolved, upon the election of either you or us, by binding arbitration. So you can't sue them. Banks have been in trouble for that, even for credit cards, where you owe them money. Remember, WePay is a depository institution - they hold your money. You never owe them money.

As for having a "brick and mortar" location, when I run WePay.com through SiteTruth, it reports the address of a house in San Jose. That's the address they gave the U.S. Securities and Exchange Commission as their place of business.

Re:The trouble with non-bank banks

[Anonymous Coward]

"That's the address they gave the U.S. Securities and Exchange Commission as their place of business"

A while ago, which I assume was before they raised $9M+ in venture funding or opened their doors to customers.

Never used WePay (or experienced it's customer service), but I don't see how linking to the TOS is a reflection of service. I've ever read Zappos' User Agreement, but I can safely say that I LOVE the customer service.

The desk employees

[KingAlanI]

The brick and mortar branches' non-teller employees seem good at providing information; I haven't had any major problems to work through, and I don't want to rely on what I've overheard form bits of other peoples' conversations.

Doesn't surprise me...

[jonwil]

Being an Aussie, it doesn't surprise me that the big 4 banks (institutions I have as little to do with as humanly possible) are less trusted than even PayCrap.
Good to see the mention about Credit Unions, I think they are a viable alternative to the big banks (I bank with one myself)

I trust my bank

[dcl]

As an Australian and a client of the Commonwealth Bank I'd say this article had me a little bit surprised. No one I know (even the technically savvy) would trust any online service such as PayPal, Neteller, Moneybookers or what have you more than one of our big banks.

My netbanking experience is great, I can pay bills, even traffic fines on the net instantly. Transferring funds domestically is also a breeze. The ability to transfer funds between savings and everyday accounts instantly is handy too.

The only is issue I have when visiting a CBA branch is that they always ask me to rate their service. Apparently anything below an 8/10 counts as a 0, which is rubbish. I'm never going to give a 10, unless they give me free money, and they certainly ruled out me giving them a 9/10 by asking such an annoying question.

That being said, I don't owe my bank anything. I don't have any loans that might cause me to be part of the many who are disgruntled by interest rate rises. When you think about it, this free service I get (at least while I'm a student) is fairly amazing. Free storage and growth of money, free electronic transactions, free cards that let me spend money remotely in person or via the internet! Amazing!

Someone needs to beat PayPal at their own game

[jonwil]

Soemone should create a paypal clone where they DONT freeze your account for ANY reason unless required by law (i.e. the way a true bank would do it). And they DONT take money not authorized by you (again, same as a bank)

I think if PayPal stopped freezing accounts for unspeicifed "suspicious activity" they wouldnt have such a bad reputation.

Aussie Banks - are Greedy Thieving Lying ARSEHOLES

[dogzdik]

"Oooo over draw your account by $1, According to OUR POLICIES that you agreed too, that entitles us to charge you a $45 overdrawn fee"... (when in fact it only costs 3 cents to process it).

.

Despite the laws of the land saying "You cannot charge a person any more than is reasonably necessary to recoup the losses".

.

Thieving cunts the lot of them.

YOU BETTER HURRY

[LINM]

The US figured out that excessive regulation can wipe out competition for the up-and-coming banks. Australia's probably not far behind if the "big 4" actually feel any pressure. Not to be cynical, but.......

WePay "discarding your account"

[Animats]

Here's where WePay got the contractual language which allows them to "discard your account". They seem to have copied their terms of service from a non-financial site:

WePay TOS (2010):
You agree that WePay, in its sole discretion, for any or no reason, and without penalty, may suspend or terminate your Account (or any part thereof) or your use of the WePay Services and remove and discard all or any part of your Account at any time. WePay may also in its sole discretion and at any time discontinue providing access to the WePay Services, or any part thereof, with or without notice. You agree that any termination of Your access to the WePay Services or any Account you may have or portion thereof may be effected without prior notice, and you agree that WePay will not be liable to you or any third party for any such termination. Any suspected fraudulent, abusive or illegal activity may be referred to appropriate law enforcement authorities. These remedies are in addition to any other remedies WePay may have at law or in equity.

ClickPass (2008):
You agree that Clickpass, in its sole discretion and for any or no reason, may terminate any member or customer account (or any part thereof) you may have at the Clickpass Service or your use of the Clickpass Service, and remove and discard all or any part of your account, at any time. Clickpass may also in its sole discretion and at any time discontinue providing access to the Clickpass Service, or any part thereof, with or without notice. You agree that any termination of your access to the Clickpass Service or any account you may have or portion thereof may be effected without prior notice, and you agree that Clickpass shall not be liable to you or any third-party for any such termination. Any suspected fraudulent, abusive, or illegal activity that may be grounds for termination of your use of the Clickpass Service may be referred to appropriate law enforcement authorities. These remedies are in addition to any other remedies Clickpass may have at law or in equity.

CampassCompass TOS: (2008)
You agree that CampusCompass, in its sole discretion and for any or no reason, may terminate any account (or any part thereof) you may have with CampusCompass or use of the Service and remove and discard all or any part of your account, at any time. CampusCompass may also in its sole discretion and at any time discontinue providing access to the Service, or any part thereof, with or without notice. You agree that any termination of your access to the Service or any account you may have or portion thereof may be affected without prior notice, and you agree that CampusCompass will not be liable to you or any third-party for any such termination. Any suspected fraudulent, abusive, or illegal activity that may be grounds for termination of your use of the Service may be referred to appropriate law enforcement authorities. These remedies are in addition to any other remedies CampusCompass may have at law or in equity.

For the other two services, an "account" is just a login and some files. But with WePay, an "account" has money in it. And WePay can "discard" it any time they want to, given this language. That's worse than PayPal.

Re:WePay "discarding your account"

[Anonymous Coward]

Just commented on your other post about WePay as well - you got me curious enough to read their TOS.

It seems like you are misreading it.

They define "WePay Account" as a "login and some files" as you describe. It's not a financial account. Your PrePaid Account (not "WePay Account" as it is defined in the TOS) is held by a "Partner Bank". They cannot "discard" that account, as it is governed by the other TOS on the site (provided by the "Partner Bank").