smart/conditional direct debits?

Zanderman

LarryDuracell wrote: »

@Zanderman: I've limited my original post to a description of an improvement I'd like to see - which I believe would help me.

I've not gone into detail on why I think it would help me, or tried to explain to others why the circumstances of my life are such that I think it would - even if it wouldn't help others.

I'm not a regular user of this forum, but would conjecture that it will do its job well if it helps users answer the questions they are facing - and less so if it criticises them for facing those questions.

Sorry if you've taken offence in any way.

The 'improvement' you suggest for DDs is simply not possible. DDs can't do that. It is not an option.

Therefore, the only way you can tackle the problem you appear to face is to manage it yourself - there is no alternative.

This is not the answer you wanted, apologies for that.

EarthBoy

londoninvestor wrote: »

A tool that used Open Banking to get the details from each credit card and current account should be able to do this - that would be a pretty neat product in fact, if anyone wants a startup idea

That wouldn't be a direct debit, as such, it would be an automated faster payment, the amount depending on the varying balances on the credit card and the current account.

18cc

You could set up a standing order each month to pay the credit card the minimum amount you can work this out from your total credit limit you should set up a standing order to pay this means you will always pay the minimum amount

You should then set up a direct debit as you have now to take the full amount if that direct debit fails because you don't enough funds then at least you will have paid the minimum amount by standing order

londoninvestor

EarthBoy wrote: »

That wouldn't be a direct debit, as such, it would be an automated faster payment, the amount depending on the varying balances on the credit card and the current account.

Yes agreed.

londoninvestor

LarryDuracell wrote: »

thanks @londoninvestor: do you know of any London-based fintechs who'd be in a position to implement this, whether as a standalone, or as part of an existing platform? I'd use it.

Logically it would fit quite well into Yolt's "Yolt Pay" offering - no idea if it's on their agenda though!

It also depends on the adoption of Open Banking by the banks themselves to allow payments to be made (as opposed to just exposing "read-only" account data). According to Yolt, only the Lloyds and RBS groups do that at the moment.

polymaff

Could you not have an overdraft and a zero-balance text-warning on the account A?

Whenever the DD exceeds the balance the overdraft ensures that the DD is honoured and the text message gives the option of topping up the account A that day, or not.

I don't know if there are still arrangements that automate this (via a "reserve" account?) anymore, but it is what I do to keep my bank balance low and yet see outgoing payments always honoured.


I guess that it'll depend on relative interest rates, but for me a debt on the bank account is cheaper than one on the credit card accounts.


EDIT:

LarryDuracell wrote: »

... I'm trying to minimise the amount of time I spend online checking in on my bank accounts

... and Bank A does all that for me.

LarryDuracell

@londoninvestor: thank you - I've just written Yolt to ask

Mr.Saver

londoninvestor wrote: »

A tool that used Open Banking to get the details from each credit card and current account should be able to do this - that would be a pretty neat product in fact, if anyone wants a startup idea

This won't always work. There is a delay for DD to complete. If there is a payment taken place in between the balance reading and the DD get processed, you may no longer have enough funds to cover it.

londoninvestor

Mr.Saver wrote: »

This won't always work. There is a delay for DD to complete. If there is a payment taken place in between the balance reading and the DD get processed, you may no longer have enough funds to cover it.

Yes - as EarthBoy pointed out, it needs to use Faster Payments really rather than DDs.

Terry_Towelling

A way to set up a system that sort of does what OP wants might be for CC companies to allow you to register a debit card against your CC account to take payments. This would be a sort of Recurring Transaction set up with the CC company acting as a 'sort of' retailer/cash teller.

On its own it wouldn't do what OP wants but it should be possible to have conditions specified by the cardholder for payment amounts. For OP's specific issue, the condition would be set like the 'IF' function in Excel. The CC would claim the full balance if available, otherwise take the minimum. It would do this by seeking authorisation approval for the full balance and if declined revert to the minimum (again by seeking authorisation on a zero-floor-limit basis, as we are talking about cash/quasi-cash transactions here).

Problems would be that such a system could put the paying account overdrawn if other low-value transactions with no authorisation hit the account around the same time. Also changes in the debit card number due to loss/re-issue etc would need managing.

Ignoring the cost of developing such a system, there might be an incentive for CC issuers to adopt the idea because they would be processing payments as 'cash' transactions and therefore receiving a small 'interchange fee' credit where the debit card is not part of the same bank as the CC - (I think this is right - please correct me if anyone knows otherwise).

This is just a bit of blue-sky stuff but if anyone reading has any clout with any card companies perhaps they'd like to comment.