If banksimple.com is not a bank, what is it?
The model itself is fairly common for serving particular niche markets. A few other organizations which operate in similar setups: prepaid card providers such as NetSpend, GreenDot, AccountNow, etc; startups such as SmartyPig, PerkStreet, WePay, and HigherOne. Still, nobody else seems to be providing full-service online banking to mainstream customers the way we plan to.  We plan to have much better security than most banks, which isn't hard given the current sorry state of online banking in the US. And having an intermediary who's looking out for your interests can be a good thing. David, my co-founder Josh lays out our launch plans and why we are invite-only in his latest post. In short, we made a decision to build our own call center rather than outsource it, and that limits how quickly we can bring people on. Looks more like an idea for a business rather than an actual business -- especially since it hasn't even launched. That said, it does have its merits. What bank actually holds the deposit funds becomes irrelevant, and may actaully change from time to time as they forge better partnerships with different banks.  Think of it like a mutual fund -- the individual stocks (if there are stocks) in the fund are less important than the balance of risk vs. income and the leveling of change over the course of time. It offers services banks offer, without fees (at least that is the proposal) with the addition of budgetting capability as well. It does have downsides as well There is an increased level of indirection between you and your money. They propose to simplify the banking business model, but in fact are only hiding it from you.  The same complexity that was there before is still there, with the added complexity of their service on top of it.  It's just a matter of how much of that complexity you would have to deal with directly. With that in mind, I would reiterate that they are not a business yet -- just a proposed business model.  Even the sign up process is a red flag for me.  I understand they need to gauge interest in order to forge initial relationships with various banks, but I don't see the need for the 'invitation only' sign up method.  It just sounds like a way to increase interest (who doesn't like feeling exclusively invited), and is a bit too 'gimmicky' for my taste. But, like I said, the idea has merit -- I have my reservations, but will reserve full judgement until they are an actual operating business. "I don't see how this concept takes off. First and foremost, BankSimple is NOT a bank but a tech company masquerading as one. BankSimple leaves industry regulation and treasury management -- the CORE of banking, to outside parties.  Call me old fashioned, but I prefer to have as few stops between me and my money as possible. If not for a fear of losing it in a robbery and inability to earn interest, I'd shove it under a mattress. So why would I want to bank with an intermediary, who admittently doesn't understand how the process works? How is that ""looking out for my interests""? And how is your security better than other institutions that offer 128-bit encryption and multiple security questions to test a customer's identity?  I'd like to add that not charging overdraft fees and providing lines of credit to help customers out in the event they spend more than they have is nice in concept, but what happens when those same customers do not make deposits to cover their shortfalls? When it comes to money, people will take advantage of any opportunities they have to circumvent the system. Especially if funds are tight."
"This is not a problem. SWIFT does not need the Beneficiary Account Currency. The settlement account [or the Instruction amount] is of interest to the Banks. As I understand your agreement with client is they pay you ""X"" EUR. That is what would be specified on the SWIFT along with your details as beneficiary [Account Number etc]. Once the funds are received by your bank in Turkey, they will get EUR. When they apply these funds to your account in USD, they will convert using the standard rates. Unless you are a large customer and have special instructions [like do not credit if funds are received in NON-USD or give me a special rate or Call me and ask me what I want to do etc]. It typically takes 3-5 days for an international wire depending on the countries and currencies involved. Wait for few more days and then if not received, you have to ask your Client to mention to his Bank that Beneficiary is claiming non-receipt of funds. The Bank that initiated the transfer can track the wire not the your bank which is supposed to receive the funds." On a summary level, there are three conceptual ways of clearing money electronically. Immediate clearing, where banks (often, but not necessarily) with support of the supervisory entities, send immediate drawing rights against their own cash reserves, and dedicate this right to the account of the receiving customer. This is rather expensive, as it limits the banks ability to use their cash reserves for their own banking operations (crediting etc). This is often the only way to wire significant (in comparison to the bank size) amounts of money.  Internal clearing, where the money actually never leaves the bank - it's just moved between accounts of two different customers of the same bank. It's usually free, as the bank is still free to use your money to do it's banking, and it's usually immediate since nothing actually needs to happen besides a change in the banks entries.  Batch clearing, where banks submit outstanding requests against each other, and calculate the net settlement. Basically, when you from bank A wire money to me in bank B, there is a high chance that a similar amount of money is wired between two other users it the opposite direction. After a bit of accounting the net imbalance is computed (and often drawn via immediate clearing) but the bulk of the money actually never leaves any of the banks, it just is reassigned between each banks customers as per agreed books.  There are also additional ways where companies decide to open accounts in each of the banks and provide some sort of immediate clearing backed by the operators cash reserves rather than the banks.. and so on.. How does it happen in Indonesia? I have no idea, but I think a good overview of how it happens around the world is a publication by a partner entity of ours; http://pymntsreportstore.com/products/global-wire-transfer-choices If you are really curious, I'd research under what legal form does Paypal Indonesia operate (it should be somewhere in the archives) and figure out what other wiring options are available. Questions:   When you say feds inject money into the system, what do you mean?  What system?  the commercial banks?  Or Government so they can pay govt salaries?     And can commercial banks such as chase, bofa  create money out of thin air regardless of FED(and i dont mean by frac reserve either)??  Meaning giving out credit cards, or lending money they don't have.  Coz it seems banks don't need to have savings in the bank to lend/create debt money.   M2 increase regardless to M1 or Mbase money proves that.    there needs to be a federal govt nationalized franchise of utilty banks to compete with commercial banks.  let com banks speculate, and average conservative savers go bank with the nationalized utility banks. "Your reply is an ad hominem, which would be fine if that wasn't all it was.  I'm waiting for a refutation of any of the facts I've put forth that paint the system in a critical light.  Things that would make this system okay:  - Banks being allowed far less money creation power, or none at all, forced to literally lend out only the money they have on deposit, and not create any through a pyramid of leveraging which starts at the Fed, coupled with a currency backed by a basket of diversified goods.  - A truly nationalized national banking system, without the inherent conflict of interest inherent especially in the New York Fed, which has as its board members and shareholders the very Wall Street banks it regulates.  The NY one is the worst example of this because it is the most powerful.  - Banking regulation power removed from the Federal Reserve completely and back to Congress.  - Stronger federal oversight of markets and corporate governance, which would help prevent the very malfeasance that produced the panics which justified creation of the country's central banks down through the years (the Fed is the fourth central bank, and the third of this kind of scheme in the nation's history).  Dude, I mean, the Federal Reserve was started by a bunch of robber barons, is owned and controlled by the very banks it purports to regulate, and it is the largest factor in the character of the national economy.  What's not true in any of what I've said?  Seriously, what's not true?  I mean, I'm pointing out a conflict of interest in a very serious area, and you're like, ""TINFOIL HAT!""  What a fuck is wrong with you." "To the average consumer, the financial health of a bank is completely irrelevant.  The FDIC's job is to make it that way.  Even if a bank does go under, the FDIC is very good at making sure there is little/no interruption in service.  Usually, another bank just takes over the asset of the failing bank, and you don't even notice the difference.  You might have a ~24 hour window where your local ATM doesn't work. I also really question the ""FDIC is broke"" statement.  The FDIC has access to additional funding beyond the Deposit Insurance Fund mentioned in your link.  It also has the ability to borrow from the Treasury. If you look into the FDIC's report a bit closer, the amount in the ""Provision for Insurance Losses"" is not just money spent on failing banks.  It also includes money that has been set aside to cover anticipated failures and litigation.  Saying the FDIC is ""broke"" is like saying I am ""broke"" because my checking account balance went down after I moved some money into a rainy-day fund. Failure of the FDIC would signal a failure of our financial system and the government that backs it.  If the FDIC fails, your petty checking account would be meaningless anyway.  The important things would be non-perishable food, clean water, and guns/ammo. That said, it will be interesting to see the latest quarterly report for the FDIC when it is released next week.  The article implies things will look a little better for the FDIC, but we'll see." I'd say it's a limitation of your bank. Every bank I've ever used had instant transfers between accounts at the same bank. It sounds like you've found a decent bank. I suspect some may not realize they don't have to bank with the big 8 (or however many there are).  Once enough people start moving their money elsewhere the banks will begin to wake up and change their behavior. &gt; ...but more fundamentally, there are two factors that exclude banks from ponzi scheme membership:  It has nothing to do with either of those actually.  What separates them from ponzi schemes is that they're paying back creditors when they pay interest to depositors.  They are not paying back equity holders (which is what a ponzi scheme pays returns to).