Why do Yorkshire Building Society so called ‘Faster Payments’ take until the next day

Yorkshire_Pud

But they always debit your account immediately. In effect you pay YBS a fee of one days interest on the amount withdrawn and why do they even call it a faster payment when it’s so slow?

Ford Money used to make you wait a day to receive withdrawn funds (but now it’s same day) but they didn’t debit your account until the next day. Nor did they call it a FP!?

ForumUser7

Yorkshire_Pud said:

But they always debit your account immediately. In effect you pay YBS a fee of one days interest on the amount withdrawn and why do they even call it a faster payment when it’s so slow?

Ford Money used to make you wait a day to receive withdrawn funds (but now it’s same day) but they didn’t debit your account until the next day. Nor did they call it a FP!?

I agree it is confusing, as if you request a withdrawal on 27/07/2023 your YBS account will show the date of withdrawal as 27/07/2023 and your recipient account will show the date of receipt as 28/07/2023.

However, in their terms YBS state:

"We pay interest up to and including the day you take money out"

This is different to other banks, for example Nationwide which states:

"So, if you pay money into your account, it’ll usually start earning interest on the day we receive it, but it won’t earn interest on the day you take it out."

In other words, YBS would pay interest for the 27th in the example above, but Nationwide wouldn't. This extra day of interest compensates for the delay, and makes it as if the withdrawal was processed the next day.

mrsplinter

The minimum standard for faster payments is that they arrive by the next business day. 

https://www.wearepay.uk/what-we-do/payment-systems/faster-payment-system/how-faster-payments-work/

Yorkshire_Pud

ForumUser7 said:

Yorkshire_Pud said:

But they always debit your account immediately. In effect you pay YBS a fee of one days interest on the amount withdrawn and why do they even call it a faster payment when it’s so slow?

Ford Money used to make you wait a day to receive withdrawn funds (but now it’s same day) but they didn’t debit your account until the next day. Nor did they call it a FP!?

I agree it is confusing, as if you request a withdrawal on 27/07/2023 your YBS account will show the date of withdrawal as 27/07/2023 and your recipient account will show the date of receipt as 28/07/2023.

However, in their terms YBS state:

"We pay interest up to and including the day you take money out"

This is different to other banks, for example Nationwide which states:

"So, if you pay money into your account, it’ll usually start earning interest on the day we receive it, but it won’t earn interest on the day you take it out."

In other words, YBS would pay interest for the 27th in the example above, but Nationwide wouldn't. This extra day of interest compensates for the delay, and makes it as if the withdrawal was processed the next day.

That’s good to know thanks. Still frustrating to wait what seems a long time in this day and age, still after their recent failed website upgrade travails maybe better to leave as is.

Yorkshire_Pud

mrsplinter said:

The minimum standard for faster payments is that they arrive by the next business day. 

https://www.wearepay.uk/what-we-do/payment-systems/faster-payment-system/how-faster-payments-work/

I hope they eventually make it same day as most other institutions manage.

p00hsticks

mrsplinter said:

The minimum standard for faster payments is that they arrive by the next business day. 

https://www.wearepay.uk/what-we-do/payment-systems/faster-payment-system/how-faster-payments-work/

I suspect that YBS aren't 'direct participants to the faster payment scheme' as referred to in that link though ?
In my experience, many (most?) building societies aren't and payments have to be routed via an intermediate bank that are. 

Wikipedia would suggest that the only Building Society that is a direct participating member of the scheme is Nationwide.
Faster Payments - Wikipedia  

eskbanker

p00hsticks said:

mrsplinter said:

The minimum standard for faster payments is that they arrive by the next business day. 

https://www.wearepay.uk/what-we-do/payment-systems/faster-payment-system/how-faster-payments-work/

I suspect that YBS aren't 'direct participants to the faster payment scheme' as referred to in that link though ?
In my experience, many (most?) building societies aren't and payments have to be routed via an intermediate bank that are. 

Wikipedia would suggest that the only Building Society that is a direct participating member of the scheme is Nationwide.
Faster Payments - Wikipedia  

Yes, that's the point - Faster Payments is a two-tier system under which transfers between direct participants should complete within two hours (but usually instantaneous) whereas all others must be by the end of the next working day.

It's a common misconception that only the former are categorised as Faster Payments....

[Deleted User]

eskbanker said:

p00hsticks said:

mrsplinter said:

The minimum standard for faster payments is that they arrive by the next business day. 

https://www.wearepay.uk/what-we-do/payment-systems/faster-payment-system/how-faster-payments-work/

I suspect that YBS aren't 'direct participants to the faster payment scheme' as referred to in that link though ?
In my experience, many (most?) building societies aren't and payments have to be routed via an intermediate bank that are. 

Wikipedia would suggest that the only Building Society that is a direct participating member of the scheme is Nationwide.
Faster Payments - Wikipedia  

Yes, that's the point - Faster Payments is a two-tier system under which transfers between direct participants should complete within two hours (but usually instantaneous) whereas all others must be by the end of the next working day.

It's a common misconception that only the former are categorised as Faster Payments....

There is no need for non-direct participants to have next day faster payments -  it's a design choice to reuse a BACS type arrangement. 

They can have real time comparable to a direct participant or even simply use batches several times a day like their former N&P brand did with their accounts. 

phillw

[Deleted User] said:

eskbanker said:
There is no need for non-direct participants to have next day faster payments -  it's a design choice to reuse a BACS type arrangement. 

As the processor will have a certain amount of capacity, then I presume also they negotiate a processing fee based on what time of day the transactions are processed.

bristolleedsfan

phillw said:

[Deleted User] said:

eskbanker said:
There is no need for non-direct participants to have next day faster payments -  it's a design choice to reuse a BACS type arrangement. 

As the processor will have a certain amount of capacity, then I presume also they negotiate a processing fee based on what time of day the transactions are processed.

Yes and YBS typically pay higher interest on more savings accounts than as an example Skipton who have an arrangement for same day transfer of withdrawal funds.

eskbanker

[Deleted User] said:

eskbanker said:

p00hsticks said:

mrsplinter said:

The minimum standard for faster payments is that they arrive by the next business day. 

https://www.wearepay.uk/what-we-do/payment-systems/faster-payment-system/how-faster-payments-work/

I suspect that YBS aren't 'direct participants to the faster payment scheme' as referred to in that link though ?
In my experience, many (most?) building societies aren't and payments have to be routed via an intermediate bank that are. 

Wikipedia would suggest that the only Building Society that is a direct participating member of the scheme is Nationwide.
Faster Payments - Wikipedia  

Yes, that's the point - Faster Payments is a two-tier system under which transfers between direct participants should complete within two hours (but usually instantaneous) whereas all others must be by the end of the next working day.

It's a common misconception that only the former are categorised as Faster Payments....

There is no need for non-direct participants to have next day faster payments -  it's a design choice to reuse a BACS type arrangement. 

They can have real time comparable to a direct participant or even simply use batches several times a day like their former N&P brand did with their accounts. 

Yes, all providers are obliged by the regulations to complete transfers by no later than the end of the next working day, but as you say, some choose to improve on that even if not direct participants.