Business bank account: card payments taking twice as long to arrive

cottager

I was unsure whether to put this here or to the Credit Cards forum, but as it's about payments in to a bank account this seemed best. I'm hoping anyone with a business account in a similar situation may be able to help.

OH is self-employed with a small business, and has accepted card payments (debit and credit cards) for many years. His terminal was leased from Cardsave to whom he paid a quarterly rental; but the actual transactions and the means of crediting his account with the payments were handled through Streamline. They charged on an agreed percentage basis (which varies, depending on which type of card was used for the payment), and billed him monthly based on the value of transactions put through the terminal over the previous month, all detailed very precisely per type of card.

A few weeks ago he was approached by another provider who offered lower charges -- both for terminal rental and for the transaction percentages. With the financial situation tightening lately this seemed attractive. OH asked what he thought were sensible questions and, suitably convinced, 'signed up'. He received his terminal a week ago and transactions have been going through it since.

What we have only just become aware of is that card payments now seem to be taking twice as long to reach our account than they did through Streamline.

The length of time always did vary sometimes, so you could never say across the board that without fail it only took 2 days or whatever for the amounts to reach the account -- but it was almost always 2 working days, and would never normally take more than about 3 or 4 in certain cases. The 2-day period applied to all the most common types of card: Visa, Mastercard, Maestro, Delta etc.

As with any bank statement, a transaction type is noted (such as BACS, cheque, Direct Debit etc). For card payments credited via Streamline it was always 'POS' which I believe indicated Point of Sale.

The first two card transactions through the new terminal were last Monday 8th (one Visa, one Maestro), then the next on Tuesday 9th (Visa again), and they have just filtered through to our account. Monday's went in on Friday 12th, and Tuesday's came in today. Others taken later last week haven't arrived yet.

The transaction type noted is no longer POS, but BACS. This has a 3-day cycle, so it seems to me that payment to OH was not instigated until 2 days before he received it... in other words Friday's credit was instigated on Wednesday, and today's on Thursday. This was unexpected: after all, the payments were taken through the terminal 2 days earlier, and on past performance we would have expected Monday's to be credited on Wednesday, and Tuesday's on Thursday.

I'm thinking it also suggests that from our terminal the payment is now going 'somewhere else' and being held (possibly until it clears?) before it's then sent on to our account. It didn't appear to work that way with Streamline, as although they were the facilitator they didn't seem (to us, anyway) to be an obstacle or a delay... yes transactions went through them, but it was still essentially a straight-through process to our account.

The name of the payer on the BACS credits is BOS, and this ties in with the agreement received (from First Data Resources Ltd, who the terminal lease agreement is with). As well as the lease term, monthly payments and other details are:
Leased Equipment: T4220 - BOS
Merchant Channel: HBOS

So what I'm trying to establish with your help, based on the limited evidence so far, is exactly what has changed here, and why, and whether it is indeed likely to be having an impact on payment times.

# What is different about the way transactions were handled through Streamline, such that payments through them invariably arrived in our account in 2 working days?

# Why no longer POS, and why employ BACS? OH tells me BACS was never mentioned, and the payment mode (to us) wasn't something which occurred to him to check.

# Does this look as though our card payments are now going to a sort of 'middle man' which didn't exist before, and being held there till authorised before being forwarded on to us?

If we can understand what may have changed 'behind the scenes', we can take it up with the new provider. Any advice about how to convey this, and the relevant points to put forward, would be much appreciated.

Have to say I'm quite concerned, as this has only just come to light and -- if it came to it -- we are now past the cooling-off period of 5 days for the agreement.

Thank you.

bitterSTAR

Atleast it's not as bad as when I was using Barclaycard, we received payments from them a whole month after the transaction! But cause we had signed up for a 2 year contract we just had to live with it.

Knowing how long payments took to clear we just budgeted to accomodate it. Can't you just do the same? After all it's only 6-7 days and you are making a saving - we had to wait a month for our payments, so atleast you're not in that situation!

cottager

bitterSTAR wrote: »

Knowing how long payments took to clear we just budgeted to accomodate it. Can't you just do the same? After all it's only 6-7 days and you are making a saving - we had to wait a month for our payments, so at least you're not in that situation!

Very true, and I'm afraid I didn't know card payments could still take so long to come through.

Well, yes I guess we could budget around it, and we may have to, but would still like to understand why this new arrangement seems to work in a different way from Streamline's... the mechanics of both, if you will.

We've always been with Streamline till now, even in the old paper docket days before terminals came in (when you had to bank the slips so it took longer). But since having the terminal some years ago we've been accustomed to payments going through speedily; and with Streamline being the only outfit we have ever dealt with, we weren't even aware there was 'another way' of handling card payments. It's ironic that through most of the years we've been able to accept cards it wouldn't have mattered too much if payments didn't come through quite as quickly as they always did... as you say, you can budget. With the general downturn it's now starting to matter.

We'd like to know why they need to go through what's looking like an additional step (the BACS route) at all. It seems there's more than one method of processing card payments, which we didn't realise, so we're trying to find out more to understand what's going on.

hippey

I might of missed it but who do you actually bank with?

Card aquiriers who use FDR for the polling or online handling of transactions do normally take 4-5 working days for the transactions to be credited and it will be by BACS, it is in the T&C's and the operating guides as well.

You not really using a middleman as such, FDR handle the transaction on behalf of a number of banks.

We used to use HSBC for aquiring, the terminal was 'polled' overnight we would normally receive the value before 11am in the bank as an uncleared amount into our HSBC account. However when we were with Lloyds for banking it took 3 days to reach the account, so some will depend on the internal workings of the various banks as well.

Another thing to look at to make sure you are credited quickly - if you terminal is online always do your banking in the window you have been told to, if you don't you will be 1 days late in crediting. If it's a polled terminal, try to get it polled as early as possible, 10pm is normally the earliest.

cottager

hippey wrote: »

I might of missed it but who do you actually bank with?

It's NatWest.
(As background, in the scheme of things his business is tiny. He never takes more than maybe 4 or 5 card payments a day, max. Some days none.)

Then you start to lose me... so sorry, but ashamed to say we're just not up on the terminology or the procedures you describe, even OH who takes the payments and uses the terminal. AFIK all he's ever done or had to do is basically what I would see if I was using my card in any shop: card's swiped, customer enters PIN, and the slips are produced, one for the customer and the other for us. That's it. Everything else just 'happened' without any further action on his part. (And judging by what bitterSTAR has said, it happened and worked very quickly for us, with payments usually credited in 2 days.)

I'm quite sure this will sound unbelievable, but if we needed to prove that he did absolutely nothing else while we were with Streamline, then our ignorance and lack of knowledge would be the proof! Prepare to be shocked...

Till reading your post neither of us even knew what polling was -- though having looked it up we do now. The explanation says it's for off-line terminals. We don't know if the previous terminal and the new one are off-line or online. It also mentions an "end of day" procedure needing to be completed correctly. We don't know what that means either... never done it whatever it is, never needed to.

You say (if online) 'always do your banking in the window you've been told to'.
Apologies again... haven't a clue. Since he never actively did anything beyond take a payment which then magically appeared in our account a couple of days later, I don't understand what 'do your banking' involves; nor aware he should have done it during a certain time period.

If any of these procedures, or lack of, are having an effect on payment times compared with what he's been used to till now, it certainly looks like a learning curve!

Streamline, I've just remembered, is part of NatWest... their name is certainly at the bottom of the SL monthly invoices in small print. Could this be why we received the payments so quickly, as it's part of our bank? And also maybe why POS was noted as the transaction type, instead of BACS?

Another 'new thing' just happened: a printout of Banking Totals from the terminal showing a list of transactions, with a time just before midnight on Saturday... I think OH said it was there in the terminal when he went into work yesterday. Again, he never saw/had anything like this with Streamline either. Does this suggest we were polled? -- so it's an offline terminal?

Well, clearly we are very ignorant
And perhaps in a sense also very spoiled up till now, having never had to know anything of these unfamiliar terms and procedures. It was so simple till this morning...