How does that add up? If I send money via my internet bank too person or company the bank has to do zero work (other than maintain their servers). Anything that requires manual work has to be a lot more expensive for the bank!?
Here, transfers are free and any "paper" business such as check cashing/bill payment has steep fees.
How can your banks provide you with the labor intensive service for free and charge for what is cheaper to provide? Aren't they creating a customer behavior they don't want?
Well, it's kind of interesting. The billpay system leverages the fact that most payments for most folks go to companies, and those are all electronic links; the checks are somewhat rarer in the big picture and only to small businesses or people. The checks in this case are not "certified" in that they are not a guaranteed transfer; like any other check, they can bounce. But yes, they are printed and mailed, and there is a cost to that vs. the electronic thing.
The wire, however, including the account (the routing number can be looked up by your bank; it just saves time if you already have it) is a very specific approach to transferring money in a certified manner. It's older, and has some overhead and history in how it's tracked and managed, if for no other reason than that the funds are guaranteed. As such, there are still fees on it (and that's probably true in most countries, btw, unless you have a balance over a certain amount).
Most folks paying their babysitter $40 aren't concerned about a certified transfer, and assume they will have funds to cover the check when cashed, so they don't need to pay any fees and will just do a regular "check". And I would bet that the banks are working on ways to do a better job of making electronic links to reduce their need to print those checks (for example, perhaps if I keep paying my babysitter 2 or more times, the bank could automatically check the clearning house for the deposited check, and, in the future, autonegotiate a direct link with the babysitters bank and account for payment or something clever like that; I don't know if that would really work but sounds cool).
Bottom line is still that any manual work (cashing a check, mailing one, cash-paying a bill at a bank...) must be one or two orders of magnitude more expensive than wiring.
I'm not sure what the costs are for wiring as it is usually packaged. I pay $30-40/year for Internet bank w unlimited wiring including p2p through phone number (yes guaranteed/negotiated transfer to the babysitter!). Meanwhile cash-paying a bill or cashing a check is probably $10 a pop, simply because banks are trying very very hard to get rid of two things: cash and staff. that makes a lot of sense from a business perspective.
Here, transfers are free and any "paper" business such as check cashing/bill payment has steep fees.
How can your banks provide you with the labor intensive service for free and charge for what is cheaper to provide? Aren't they creating a customer behavior they don't want?