CHAPS/BACS transfers/charges

gordonjazz

Can anyone explain why, where the main clearing banks charge £20 upwards for a CHAPS payment, the non-clearing banks/building societies charge up to £35 per CHAPS transfer - they seem to be making an additional unjustified profit in my view. Why does it in any case cost £20 when I can make transfers online which seem to arrive at the destination by the following working day?

The banks say that for BACS payments "allow 4 working days" therefore if over a weekend this amounts to nearly a week! Once again, I can make transfers online which seem to arrive at the destination by the following working day.

Is this another case of the banks sitting on my money and placing it on the overnight money markets, thank you very much?!?

More and more of us are affected by this as cheque payments, especially of large amounts, can easily be fraudulently diverted for illegal cashing and use thereby forcing us to use "non-cheque" money transfer methods. The banks, when questioned about their guarantees for stolen cheques say that "they would investigate" - not much of a guarantee then!

gordonjazz

dunstonh

they seem to be making an additional unjustified profit in my view.

And you base that view on knowing the manpower required to transact a CHAPs payment?

Why does it in any case cost £20 when I can make transfers online which seem to arrive at the destination by the following working day?

Because it uses a different system and is labour intensive compared to a BACs payment.

Is this another case of the banks sitting on my money and placing it on the overnight money markets, thank you very much?!?

They wouldnt make much money on the 20 minutes a CHAPs payment takes and if your BACs transfers are happening overnight instead of 3-4 days then again, its hard to see how they can profit from that on the money markets.

gt94sss2

gordonjazz wrote: »

More and more of us are affected by this as cheque payments, especially of large amounts, can easily be fraudulently diverted for illegal cashing and use thereby forcing us to use "non-cheque" money transfer methods.

The banks are due to introduce 'faster payments' in May 2008 - it is a replacement for BACS transfers and will lead to online transfers between different institutions to be made within a couple of hours (i.e. on the same day).

The new system was originally due to be introduced in November 2007, at the same time that the new rules covering cheque clearing came into existence but have been delayed until May 2008.

More details here and here

Regards
Sunil

gordonjazz

gt94sss2 wrote: »

The banks are due to introduce 'faster payments' in May 2008 - it is a replacement for BACS transfers and will lead to online transfers between different institutions to be made within a couple of hours (i.e. on the same day).

The new system was originally due to be introduced in November 2007, at the same time that the new rules covering cheque clearing came into existence but have been delayed until May 2008.

More details here and here

Regards
Sunil

Thanks for that. I was wondering also why there appears to be a large disparity between the clearing banks' charges (£20 ish) and the non-clearing banks charges of £30-35. Anyway hopefully all will be significantly improved in May.

Mikeyorks

gordonjazz wrote: »

More and more of us are affected by this as cheque payments, especially of large amounts, can easily be fraudulently diverted for illegal cashing and use thereby forcing us to use "non-cheque" money transfer methods.

The height of cheque fraud, normally via mail intercepts, was in 1990. The Cheques Act 1992 was 'hastily' brought in to address this .. and was largely successful. Since which cheque fraud via interception has dropped to fairly negligible levels. Helped, no doubt, by the fraudsters turning their hands to the more lucrative plastic / phishing markets.

But it's an odd thing to post - so long after the main event?

jonesMUFCforever

gordonjazz wrote: »

Thanks for that. I was wondering also why there appears to be a large disparity between the clearing banks' charges (£20 ish) and the non-clearing banks charges of £30-35. Anyway hopefully all will be significantly improved in May.

LTSB charge £30.:beer:

gordonjazz

I hear what you're saying - it's just that I'm a bit twitchy about writing a large cheque to open, say, a savings account and entrusting it to our glorious postal service. Remember the recent strike and late (and non) delivery of mail.

Thanks anyway.

Mikeyorks

Sometimes it's the only option. They require a personal cheque as part of the ID checking. In particular if you're a new customer

You should be fine provided you remember to write the payee line in accordance with the (new) convention for financial institutions viz "Bank name" followed by "(your name)". Send it recorded if you're still twitchy?

saddlebag

gordonjazz wrote: »

Can anyone explain why, where the main clearing banks charge £20 upwards for a CHAPS payment, the non-clearing banks/building societies charge up to £35 per CHAPS transfer - they seem to be making an additional unjustified profit in my view. Why does it in any case cost £20 when I can make transfers online which seem to arrive at the destination by the following working day?

The banks say that for BACS payments "allow 4 working days" therefore if over a weekend this amounts to nearly a week! Once again, I can make transfers online which seem to arrive at the destination by the following working day.

Is this another case of the banks sitting on my money and placing it on the overnight money markets, thank you very much?!?

More and more of us are affected by this as cheque payments, especially of large amounts, can easily be fraudulently diverted for illegal cashing and use thereby forcing us to use "non-cheque" money transfer methods. The banks, when questioned about their guarantees for stolen cheques say that "they would investigate" - not much of a guarantee then!

gordonjazz

CHAPS charges
£20 Barclays
£20 Nationwide
£20 Leeds
£25 Stroud & Swindon
£30 Newcastle BS
£30 Derbyshire BS
£35 Northern Rock
£35 Manchester BS
£35 Chelsea BS
£35 Birmingham Midshires

This is a random list of CHAPS fees charged by various building societies and banks.
I realise that some building societies are banks, some are owned by banks and some have to use other banks for the service but I cannot see why, for the same service, one institution's charges are nearly twice that of another's, e.g. Northern Rock and Barclays.
Or why Derbyshire BS, who has to use Barclays to provide the service, charges £30 to its customers when Barclays (who does most of the work presumably) only charges Derbyshire BS £20?

saddlebag

saddlebag

Thanks a lot for that. I twitch less already!

dunstonh

When I used to work at a bank, the local building society used to walk their chaps payments over to us to process on their behalf. They then suffered our fee and no doubt had to add their fee on top.

So, some of the building society fees may be legacy priced from the days they when they didnt have direct clearing but used other banks.