BACS name field / Building Society payments

Compound_2

I was wondering how important the payee name field (or ‘Who do you want to pay?’) is on Internet Banking payments. Does it have to be in any format such as how it is recorded in the payee account, or is it never used by either bank? The number of characters permitted is small, so you can’t always put full names. Does spelling matter?

In particular, what applies in payments to Building Society accounts? Technically in ‘their sort code/account no’ this is talking about the Building Society as only the reference belongs to you. The beneficiary for mortgage payments is the Society, but for savings accounts it’s the member. Should you put yourself or the Society? If it’s your choice what is the balance of pros and cons regarding confidentiality and avoiding delay? For the Tax Beater ISA they ask for 'Barclays Bank PLC re: your name' on cheques confirming the dual-beneficiary nature of a payee.

There’s also a company search facility which is recommended and some building societies can be found (although they are not technically companies). If you use this the Society is the payee. But you can’t see whether the account details your bank will use are appropriate for your payment and match those given to you by the Society. I’m also wondering whether such ‘bill payments’ will still be flagged as internal/same-day where you know you and the Society share the same bank.

Dagobert

Compound wrote:

I was wondering how important the payee name field is

It is irrelevant. I bank with dozens of banks and transfer money between dozens of bank accounts of my own. As most online interfaces display the payee name in the payee list the only way to distinguish them is by entering a nick name in the payee field.

Otherwise I would have dozens of indistinguishable payees called "Jane Doe" in the drop-down and on the bank statement. Instead I enter something like Abbey rs, Ipswich rs, Nationwide rs ... This works for all banks without fail.

The payments are directed to the recipient's account purely based on sort code and account number, and, if this is a collection account, the reference number.

Compound wrote:

For the Tax Beater ISA they ask for 'Barclays Bank PLC re: your name' on cheques

Cheques are a completely different issue.

Compound wrote:

There’s also a company search facility

This is based on a database of company bank details which the banks can sign up to. The intention is probably to reduce mistakes assuming that the user is too stupid to enter the details. I never use this option because then I would not be able to use nick names as described above. Instead I always use the payments to friends and family option and key the details in by hand. Lloyds TSB however, do not allow you to enter the details by hand if you try to make a payment to a sort code and account number from that database.

Compound wrote:

I’m also wondering whether such ‘bill payments’ will still be flagged as internal/same-day where you know you and the Society share the same bank.

This depends entirely on the bank. Many building societies use Barclays, HSBC, TSB, RBS, ... as their clearing bank.

Transfers from HSBC/FirstDirect to HSBC collection accounts take 3 working days like external payments.
Transfers from Barclays to Barclays accounts with a sort code 20xxxx are immediate.

This topic has been covered in threads [thread=297060]same day arrival from banks to building society[/thread] and [thread=297060]transfers from Barclays[/thread].

Compound_2

Thanks Dagobert. Just a couple of follow-up questions:

Are conditions like ‘payment can only be made to a (current) account in your own name’ unenforceable if the name field is never used?

In those cases where transfers are same-day when entering details manually (eg Barclays to Skipton) will the transaction also be processed same-day if company search is used?

Mikeyorks

Compound wrote: »

For the Tax Beater ISA they ask for 'Barclays Bank PLC re: your name' on cheques confirming the dual-beneficiary nature of a payee.

It's nothing to do with 'dual beneficiary' .. it's an anti fraud measure designed to stop anyone intercepting a cheque simply made out to a financial organisation - and use it to their advantage by paying it into their account (or one they open for that reason) with that organisation.

It's 'informal' .. not statutory - but financial institutions will likely return cheques not conforming.

http://www.apacs.org.uk/payment_options/cheques_draft_changes.html