Where is the money?

boingy

It's not Severn Trent Water by any chance?
I manually moved a DD to a different bank account using their website and they seemingly could not cope. It took over 2 months to sort it out. In one of those months they managed to tell me I had missed a payment, that they were increasing the DD amount on the old account and also welcomed me as a new customer and gave me the same customer number I already had! In the meantime the new DD was showing on the new bank account but they didn't take any money from it. I suppose I should be grateful that they didn't start billing me twice...

Gobad07

The traditional banking system often requires a few days to process transactions, including direct debits. This is due to various factors such as the time it takes for the banks to communicate, perform security checks, and confirm the availability of funds.

Zanderman

The_Pensioner said:

I pay many bills regularly using the Direct Debit system.

Recently a DD was taken from my bank account on a Friday and as of Tuesday still had not been credited to my utility account.

Whilst I understand there should be a small delay (hours if using BACS), who has the money and the use of that money in the intervening days. My simple estimate is that the DD system has >£ 500 million is there pocket over any given weekend.

Do the banks use it on the money markets??

I suspect, as many have pointed out, that your issue is not with 'the banks'. It's simply your utility company delaying crediting the money to your account. Nothing more mysterious than that. 

On that basis your suggestion that the 'DD system' has £500Mill in it over a weekend seems very unlikely - the money is with the recipients, they just haven't acknowledged it's arrived yet.

km1500

this is a reasonable description of the DD system

https://www.bacs.co.uk/services/bacs-schemes/getting-started/direct-debit/

Zanderman

km1500 said:

this is a reasonable description of the DD system

https://www.bacs.co.uk/services/bacs-schemes/getting-started/direct-debit/

In which the key phrase is: 

Payments are simultaneously debited from the recipients' accounts and credited to your account.

Which confirms that the utility company has had the money immediately after the debit - so it's not, as the OP seems to think, any bank taking advantage for a few days. It's merely a utility company being slow to allocate funds to customer accounts. The 3 day bit at the bank is the prep time before the debit happens.