Topic: Open questions to Jered and Alan of Tradehill - page 2. (Read 4895 times)

If you send checks out of your business account each check will have the routing number and account number on it.

How is this different than giving out the account # so people can make cash deposits?

Really? I know PayPal is risky, but I thought MoneyBookers didn't do chargebacks when we are talking simple "sending money to another MoneyBookers account"?

Guess I was wrong :/

edit: Why couldn't Tradehill give the possibility of withdrawing money to moneybookers? Unless Tradehill would demand a chargeback? But then they would be seen as fraudulent?

PayPal and other such services are far too high-risk.

Why not use something like MoneyBookers?

Setup a separate account specifically for deposits. This limits your risk, since your main account number(s) can remain hidden. Then it would simply be a process of transferring funds from the deposit account into your main account. Perhaps this process could be automated. If not, I assume it would be performed daily. The risk then would only be limited to the average daily balance in that account.

To further mitigate that risk, you could ask the bank to block all withdrawals/ACH from the deposit account. The only withdrawal that would be permitted, by anyone, would be transferring from that publicly facing account into the private main account.

Jered, I hope you have a $1000 withdrawl limit on your site.


Otherwise, someone who has all of Mybitcoin and Polands Bitcoins can wipeout your entire site.

It's not so much the deposits that I'm worried about. It's publishing the account number and then getting online transfers from phished accounts and those getting pulled back. There are a few other scams that can be done which I'll discuss in private and I'm sure the scammers already know anyways. If we can manage the risk we'll do it, see what bank number #2 and #3 have to say tomorrow.

As far as deposits in person I'd love it.

The bank really really doesn't want us to just give out the account numbers.

I think you're over-estimating the willingness of banks to make their security footage available to customers and third parties.  I also suspect that banks only keep their security footage for a very limited amount of time, just like other businesses.

The good part of being able to deposit into a bank is there are cameras. It's a nearly impossible to say " I deposited money to Tradehill but I didn't get credit" when they don't have a deposit slip and there is no video of them making the deposit.

I don't see how acccepting cash at the teller's counter to an account that is merely used as a feeder to your other account(s) could possibly fall victim to fraud. Just be sure that the depositor had a transaction number that can only be used one time to add those funds to his/her account. You will not be inventing the wheel here.

The biggest problem in the end for all of these things is fraud. If we accept these transfers we have to give our account numbers out and exchanges are extremely high value targets for fraud. If we can do it safely we'll do it. If we get a lot of fraud and run a completely legit business they can still shut us down though. It's a balancing act between ease of use and security.

Jered

You can probably also deposit into someone else's account through online banking if you can do it over the counter at a branch.  Here an online deposit to the same bank is instantly available, while a deposit to a different bank can take a couple of days to process.  Either way, there's no need to physically visit the bank.

Becoming a biller with a billpay platform would make things simple for exchange clients because they could deposit funds by phone, online or in person, but billpay schemes typically involve interchange fees for the billers who are part of the scheme.

I think one issue which has emerged is how different the banking systems are in the various places the exchanges do business. Things which are dead simple and low cost in one location are complex and expensive somewhere else.  There's no "one size fits all" solution for the issue of depositing and withdrawing funds to and from the exchanges. Implementing and maintaining different systems for different locations is going to be a serious pain in the ass and every extra step which is added to the process introduces another potential failure point. 

The exchanges need to stop rushing to market with half-assed bandaid solutions adopted on the fly and refrain from promising solutions until they're certain they can deliver.

BoA and Wells Fargo are the ones to start with. Regions is big here in the South East.

Good luck!

I spoke with the bank in person today. It's completely legal and at first sounds like a great option. The banker admitted that occasionally the slip doesn't get put in the system and it can be very confusing. I do this all the time to pay for things in Chile but in the US it's not quite as efficient in reality. I'm speaking with additional banks tomorrow and would really like to offer this service. If at all possible we will immediately. If the risk is too high we will have to leave it off the list.

Additionally the blog has been updated and we're now sending out checks on request.

Jered

I know some landlords that give their tenants deposit slips and have the tenant deposit it in the banks directly. Very good protection for the tenant. Yes this is in the US. It is no problem at all to deposit money in someone else's account. I'm baffled that it's illegal.

It many countries it is legal to deposit into someones else account and it is considered the norm in some countries (example: central/south america)

I mentioned this idea to Tradehill the ability to deposit say $100 at a local BofA. The bank gives you a deposit receipt (proof) and you can send it to Tradehill if anything.

I don't know how you do it in USA, but here in Israel it's illegal.. You can deposit only to your account ONLY. After this make transfers wherever you like.

That would be great if we could get that working. In the past we had to wait a really long time to verify it. When I speak with them on Monday I'll ask if we can fix that. I'm also going to speak with other banks on Monday and if they have a better verification process we'll use them for in person deposits. The idea is agreat and we would love to use it.

If you use bank of america cant I theoretically just go to any branch and deposit cash into your account? I thought my girlfriends mom used to do that for her all the time.

And we can then also walk up to the local counter and deposit cash directly into your acount.