Faster payment Con / Scam

abc987

Why do most building societies and some banks take more than 2 hours to transfer money from one account to another?
Surely in these modern times, even 10 minutes is slow.

Or is it another con trick by the industry to blood-suck more from us?

Where's the regulator when you need them?

mr_stripey

do they? Whenever I transfer money between banks it is instant, or as good as.

Sometimes initial transfers may take a bit longer. They do fraud checks, which is a good thing.

They have lots of ways of making money without hanging on to yours for a couple of hours!

Doctor_Who

Taken from the link below:

As a minimum, all financial institutions in the UK must abide by the Payment Services Directive (PSD) –  this states that any payments made by mobile, internet or phone banking (including standing orders) must arrive by the end of the following business day at the latest.

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

flaneurs_lobster

I'm curious how you think that taking a couple of hours to transfer money is a blood-sucking con / scam?

Even allowing for a touch of hyperbole it seems a bit of an exaggeration.

Please explain how this delay of a few hours has disadvantaged you financially?

eskbanker

abc987 said:

Why do most building societies and some banks take more than 2 hours to transfer money from one account to another?
Surely in these modern times, even 10 minutes is slow.

Or is it another con trick by the industry to blood-suck more from us?

Where's the regulator when you need them?

There's another similar thread from this morning that covers this ground, in rather more tolerant terms:

https://forums.moneysavingexpert.com/discussion/6462568/why-do-yorkshire-building-society-so-called-faster-payments-take-until-the-next-day

MeteredOut

scam

noun

1. a dishonest scheme; a fraud.

   "an insurance scam"

verb

1. swindle.
   "a guy that scams old pensioners out of their savings"
   

vernacular

1. something someone on the internet does not agree with
   "I did a bank transfer that took 2 hours to reach my other account; what a scam!"

   
   

born_again

Given the amount of Cons & Scams Using faster payments system. There is a argument for the system to take longer in certain cases.

eskbanker

born_again said:

Given the amount of Cons & Scams Using faster payments system. There is a argument for the system to take longer in certain cases.

Indeed, as discussed at https://forums.moneysavingexpert.com/discussion/6444063/new-anti-fraud-measures-unintended-consequences

flaneurs_lobster

abc987 said:

I won't bother replying to the defenders of this practice - I think we know who funds them.

I don't know, please identify "who" and indeed, "them".

ForumUser7

abc987 said:

Why do most building societies and some banks take more than 2 hours to transfer money from one account to another?
Surely in these modern times, even 10 minutes is slow.

Or is it another con trick by the industry to blood-suck more from us?

Where's the regulator when you need them?

Have a read of the initial thread @eskbanker linked to see some recent discussion on it, and how it works at YBS specifically.

In summary, it is to do with the fact that not all organisations are direct participants of the faster payments scheme. This means they go through another organisation to act as their clearing house to clear payments for them. I.e. you submit the withdrawal request to the BS, and then they submit the payment requests to the bank usually at a set time each day, or multiple times each day, which causes a delay. The withdrawal is then processed by the clearing bank.

Usually this information is stated in the providers ts and cs so you are aware, and therefore the regulator wouldn't be interested - also faster payments are only required to arrive by the end of the next working day. I do agree it is annoying that they are slow, and things would be more convenient if they were fast, but it doesn't amount to a con/scam IMO.

That said, I do get frustrated when organisations action them in a way whereby you lose interest. Coventry and YBS have processes to ensure no interest is lost, but Mansfield BS does not.

I think you may be interested in this article I saw the other day ~ https://www.fintechfutures.com/2023/07/ten-uk-credit-unions-tap-engage-for-faster-payments-service/ and these ones too https://www.fintechfutures.com/2023/07/psr-delivers-update-on-progress-of-new-payments-architecture/ https://www.fintechfutures.com/2023/07/salve-financial-hub-signs-for-finastras-core-banking-solution-to-tackle-payment-delays/

Organisations are working hard to evolve, because they do understand that it is a pain when they are slow, but this takes time especially at smaller organisations like almost all building societies.

jaypers

There is much misunderstanding about this. Many savings institutions are simply not set-up for Faster Payments SIPs (Single Immediate Transfers). In these cases the Faster Payments go straight to a holding account and then the funds are credited internally/manually within their own systems, I would guess by a department of agents. The ones that are means that the accounts are connected directly to the Faster Payments service and everything is automated. I’m simplifying this greatly but basically, all clearing banks will be full Faster Payments Scheme members. Some specialist savings institutions will also be, depending on the nature of their overall business and set-up.