The biggest problem with the North American banking system is the reliance on the antiquated cheque system. In the EU I can send money to any other EU bank account quickly with little or no fee. You can pay bills and send money - and no need for an intermediatary like paypal. The inherently insecure concept of letting others pull money out of your account don't exist. Pushing money also reduces the whole range of service fees relating to bounced cheques and insufficient funds.
1. It's a 20% fee when you request $10, or a 2% fee if you request $100.
2. Overdraft fees are disallowed by law and are opt-in now.
4. Also, it's not typically the banks that cancel cards, it's the processing network that does.
Most problems people have with banks are user-error, plain and simple. When you misuse a computer program, you waste time. When you misuse a bank, they charge you money.
re #2: Overdraft fees are only opt-in for certain classes of transactions, namely ATM and non-recurring debit transactions.
Checks, ACH transfers, and recurring debit transactions can still generate overdraft fees without an opt-in consent.
re #4: The networks pulls the trigger, but the standing orders come from the issuing institutions. Fraud detection is often used as a differentiation feature by the networks to attract bank customers, the networks themselves don't have a direct incentive to prevent fraudulent transactions beyond this: they don't stand to take a loss.
Imagine a system where…
1. You pay a 20% fee to withdraw money from an ATM that doesn't belong to your bank.
2. The bank puts thru a charge they shouldn't, you run out of cash, and you get whacked with a $35 fee.
3. The bank charges you a monthly fee after that - another $35 fee.
4. The bank shuts off your card because you're in another city, meanwhile you're lost in the dark, and alone, and out of money, and can't get a cab.
And on and on and on…
Not to mention outright defrauding.