What is Giro? Word Giro is a Latin word that means to circulate. It is suggested that the origins of the Giro concept itself dates back to "at least Ptolemaic Egypt in the 4th century BC. A Girotransfer is a payment transfer from one bank account to another bank account and instigated by the payer, not the payee. Equivalents in other countries are the United States Automated Clearing House for direct deposit and the Australian Direct Entry system.
History and concept Giro systems date back at least to Ptolemaic Egypt in the 4th century BC. State granary deposits functioned as an early banking system, in which giro payments were accepted, with a central bank in Alexandria. Giro was a common method of money transfer in early banking. The first occurrences of book money are not known exactly. The Giro system itself can be traced back to the "bancherii" in Northern Italy, especially on the Rialto (the Wall Street at the time). Originally these were money changers sitting at their desk ("bancus" = table) that customers could turn to. They offered an additional service to keep the money and to allow direct transfer from one money store to another by checking the accounts in their storage books. Literally they opened one book, withdrew an amount, opened another book where the amount was added. This handling was naturally a very regional system but it allowed the money to circulate in the books. This led finally to the foundation of the "Banco del Giro" in 1619 (in Venetian language Banco del Ziro) which gave the blueprint for similar banking systems. The usage in German language can be seen in the Banco del Giro founded in Vienna in 1703 (to extend the financing business that Samuel Oppenheimer had brought from Venice in 1670).
Modern electronic bill payment is similar to the use of giro. Advantages include: * Instant access to the funds via an ATM, debit card or cheque card. * There is no paper cheque that can be lost, stolen, or forgotten. * Payments made electronically can be less expensive to the payer; typically electronic payments may cost around 25¢ (US) whereas it could cost up to $2 (US) to generate, print and mail a paper cheque. Banks may not even charge for the service at all; for example in Finland banks charge nothing for electronic payments inside the country.
In the United States, the Automated Clearing House (ACH), regulated by NACHA-The Electronic Payments Association and the Federal Reserve Bank, handles all interbank transfers, including direct deposit and direct debit. In entirely electronic bill payment, the payer receives a bill either physically by mail or electronically from a website (electronic billing). Then, the payer reads in the information from the bill, either manually or by using the barcode on the bill, enters it to the form on the bank website, and submits the form. The payment is immediately deducted from the account balance.