BACS Transfers

Milarky

Caped_Avenger wrote:

The thing that concerns me is how it will affect customers. Banks can currently afford to not charge the customer for BACS transfers (the banks have to pay a subscription to BACS), because they can cover their subrscritions using the money they make off the float. Once the banks can no longer rely on this source of revenue, how will they cover their costs? Will we see a charge for transferring money?

Possibly they could charge for making more than a certain number of withdrawals in a given month? Or they could stop paying interest on bank accounts at savings account rates - which they have done for a while, now?. A deposit account should attract a higher rate because it gets less use than a bank account. Banks used to charge you for the use of a bank account unless you left £100 in there [an interest-free loan in other words] at all times. Cahoot gives you a £100 interest-free loan!

No, my moneys on the even-higher fees than now to pay for the value in the float. [But wait a minute, the OFT is pressing credit cards to lower their fees on the basis that they are basically illegal! Banks will get off for a bit longer if only because it is the FSA that is 'regulating' them and carries no remit whatever for defending the customer's interests. [Or am I cynical?]

Dagobert

If you transfer money to an account which is held at the same bank, does the payment still go through the BACS cycle therefore taking as long as if it was sent to another bank?

Dagobert

Is there any means of finding out which clearing bank a particular sort code relates to?

Milarky

Dagobert wrote:

If you transfer money to an account which is held at the same bank, does the payment still go through the BACS cycle therefore taking as long as if it was sent to another bank?

This occurred to me too - in connection with a payment to Egg I wanted to make. They bank with HSBC - as it happens at the same 'branch' as Capital One does. But payments from C1 to Egg still take the requisite 2 days and therefore appear to go via BACS.

For some reason a recent BT from C1 to cahoot (which uses a different bank to them) went through in a single day - the day after requested as well. I've also found that payments from First Direct (current a/c) went through to cahoot in a single day. Now I don't understand how payments between banks can go through in a single day if they necessarily go through BACS - whereas it doesn't break any laws of physics for a payment which could go more quickly to be sent via a slower delivery system.

If you go into an HSBC (or do it online) and transfer money from a personal current account to another also held at HSBC/FD then this is instantaineous and they get their money in the same day. But if you pay it over the counter (or online) to a collection account held at HSBC there is no such immediate transfer. This is peculiar and may be because they would 'batch' process all payments into the (say) Egg account - including those from non-HSBC accounts. It makes senses to apply these all together and I imagine they just upload to BACS and wait two days (i.e. Egg may not actually get the money any quicker because of the type of account they keep for collection of payments)

YorkshireBoy

Dagobert wrote:

If you transfer money to an account which is held at the same bank, does the payment still go through the BACS cycle therefore taking as long as if it was sent to another bank?

My son and I share the same bank (same branch but different sort codes). Transfers between our accounts seem to take the standard 3 days.

Is there any means of finding out which clearing bank a particular sort code relates to?

A quick google returned http://www.postcodeanywhere.com/demos/happy/validator.aspx

Coupon-mad

Dagobert wrote:

Is there any means of finding out which clearing bank a particular sort code relates to?

Ages ago I worked for HSBC, so forgive me if things have moved on technology-wise, since I served my time there!

Banks used to have a Sorting Code Directory (was in paper form but is probably online now, but I don't know if it's available to the general public. Could try a Google search?).

Standard numbers were, e.g., HSBC starts with 40- , Barclays with 20-, etc. (with some exceptions), but after so many takeovers I bet it's even more complicated now. If you wanted to find out which bank a particular Sort Code relates to I guess you could ask at your Bank branch's enquiry desk, but does anyone know a quicker way online?* EDIT - THANKS YORKSHIREBOY!!*

Milarky

Could try a Google search

Industry Sorting Code Directory

Another example for the collection of 1 day transfers:

A payment from Nationwide current account to HSBC credit card took 1 day this week (sent 31st May, arrived 1st June - and I'm looking at today, the 2nd so it is 'geniune')

If anybody does have current industry knowledge of how certain BACS payments are going through in a single day that would be very interesting

Thanks

ING Direct
As you may know, to credit an ING direct account you can also send a payment via BACS - quoting the sort code and account number. As the sort code is held with HSBC and a/c number is the quoted reference can you make your payment there go any quicker simply by using an HSBC/FD bank account? I suspect the answer is 'no' - for the same reasons as gone into before - namely that any such transfers will come from all banks and therefore HSBC probably sweep such requests through BACS - and the two day cycle.

Dagobert

Milarky wrote:

a recent BT from C1 to cahoot went through in a single day

Milarky wrote:

payment from Nationwide current account to HSBC credit card took 1 day

I make dozens of BACS transfers each month between dozens of different banks; not once have I seen a one day payment.

I notice that both your examples involve credit cards. I wonder whether that is the clue to the mystery here although my understanding is that these payments are made via BACS, too.

Milarky

It only takes credit cards about 1 day to charge your account I've noticed. This is like debit cards where the balance is 'released' straightaway via a shared network - eg to point-of-sale (POS) authorisation for card purchases. The details of the transaction - whose account to take the money from - then gets polled overnight and the reconcilliation process begins. Some cards have a 'pending transaction' entry on their online statements which eventually gets applied to the account (with the 'correct' date for interest-charging purposes.) Pending transactions on HFC cards (eg beneficial, marbles) are actually updated in real time - ie you do an online transaction, give your card details and when you go to your account summary the amount you have just spent is displayed - albeit as a running total. I was most impressed!

However, whilst paying money onto credit cards involves essantially the same process as BACS, it could be advanced in exactly the same way - you would have a 'pending credit' - the amount immediately reflected in your balance but the details of the payment unknown until the next batch cycle - presumeably overnight.

None of that explains how a customer orignated BACS transfer gets picked up and identified in a single day however, unless certain bank-to-bank transfers are now being batched with the previous days batches for some reason - which implies the banks are fowarding the information to BACS instantly and not overnight. (Hmmm!)

Joe_Bloggs

@Milarky
How are debit card transactions different from BACS ? They tend to be very fast and get the similar jobs done.
J_B.