MSE News: EU overhaul leads to faster electronic payments

Excellent news and about time too.

The main reason why transfers previously took 2-3 days (and they still do when transferring money back to a card i.e Visa) is that banks use to use our money on the stock markets or keep it to earn interest. They always could transfer money within 2 hours but chose not too so that they could increase their profits. Visa still do it, using the 2-3days to hold on to our money. I'm glad banks have been forced to do this but expect them to come out with all the previous threats about the end to free banking i.e they have lower profits and so need us to pay more to increase them again.

blades123 wrote: »

Excellent news and about time too.

The main reason why transfers previously took 2-3 days (and they still do when transferring money back to a card i.e Visa) is that banks use to use our money on the stock markets or keep it to earn interest. They always could transfer money within 2 hours but chose not too so that they could increase their profits. Visa still do it, using the 2-3days to hold on to our money. I'm glad banks have been forced to do this but expect them to come out with all the previous threats about the end to free banking i.e they have lower profits and so need us to pay more to increase them again.

I would not say they "always could" do it within 2 hours - their systems were designed to do batch processing overnight. Certainly, technology advanced to the point where near-real-time transfers became possible a long time ago. But the banks had little incentive to redesign their payment processing systems (and it required cooperation between all the banks).

Nationwide seem to have an interesting take on the legislation:

http://www.nationwide.co.uk/savingspsd.htm wrote:

Q: Will all banks and building societies’ sort codes be able to receive electronic payments?

A: To ensure that your payment reaches the payee’s account, you must provide us with a nominated account whose destination sort code is both Faster Payments and CHAPS reachable. Failure to do so will result in us being unable to accept that payment instruction.
The financial services industry is working to ensure that all sort codes that currently receive BACS payments can receive Faster Payments.
However, some banks and building societies will not be enabling some of their sort codes to receive Faster Payments and as a result Nationwide will not be able to make payments to these accounts as we will be in breach of the regulations.

i've NEVER been able to use faster payments despite my banks telling me a long time ago that its 'now available on the account'. Every payment i've sent has taken 2-3 working days even though the money is taken immediately. I always receive in the same time.

BAA1 wrote: »

Will the transaction be sent using CHAPS free of charge ?
OR
Will it go by FP ignoring the RBS transaction limit ?
OR
Will the transaction be rejected ?

The banks are either increasing their FPS transaction limits or setting their online payment limit at or below their FPS limit.

luckwudaveit wrote: »

I'm unclear though about a one-off to payment from a current account to a credit card - is this now a next day transfer?

It has to arrive by no later than the next working day, but in practice FPS means it will arrive the same day. However, your card issuer must credit the amount to your card account immediately upon receipt. They cannot post-date it until the next day for example.