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Money for nothing – the business of delay in banking

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#61

We didn’t get real time transfers in 2017, but there are articles suggesting it will happen in 2018:
http://www.apca.com.au/about-payments/future-of-payments/new-payments-platform-phases-1-2


http://www.nppa.com.au/

I am so over financial institutions using manually initiated batch jobs for processing financial transfers and bill payments (over the Xmas-New Year period this is even more apparent).


#62

I’d bet these ‘batch jobs’ are fully automated, scheduled with the same (worst case) timing and frequency they had when they were completely manual :wink:


#63

I’ve just noticed this problem with my Son’s account. He’s on the Autism Spectrum and is purchasing a model kit from Model-Space UK for himself which is divided into 24 interest free payments to make it more affordable.

When he was recently billed for the month his bank account said $xx.xx AUD was pending and we simply assumed that that’s what the final charge would be, plus the bank would add an International Transaction Fee after the amount was no longer pending. A few days later it’s no longer pending, but it is for a higher amount than was originally calcuated due to the differing exchange rate.

Luckily he didn’t spend the extra funds in his bank. As far as he’s concerned, what’s listed as the amount available is supposed to be what he still has to spend after leaving a bit extra in to cover the upcoming International Transaction fee which is also higher than what it would have been had the original amount been deducted instead of the revised amount.

Fair enough, the amount could have been less but for people who aren’t aware that there will most likely be a discrepancy they may end up not having the funds available by the time the revised amount is calculated. He doesn’t have a huge amount of money saved and lives from fortnight to fortnight with his Disability Support Pension. If it didn’t take so long for the banks to process everything we’d be happy just to pay the amount we’re quoted as pending regardless of if the amount goes up or down by the time it gets processed.

At least now we know we can make sure he doesn’t spend whatever’s remaining in his account while the UK transaction is still pending.


#64

What is displayed as ‘pending’ is the amount approved, not what is going to be billed. Each is based on the xrate at the respective times. You would not be the first people to be confused by it, and likely not the last. I have been hit with higher final amounts, as well as lower, but for some reason higher seems to be far more common. A cynic would think our banks might be manipulating the billing dates to get better rates for themselves, but occasionally get caught out (better rates for customers).


#65

History of cheque clearing and bank transfers (with some intermediate steps omitted):

  • Cheques were physically transported between banks (as r333r described)
  • Cheques were physically transported to a central “clearing house”
  • Banks exchanged data via magnetic tape reels which were physically transported, and processed by batch programs (this the era when it could take seven days)
  • Banks exchanged data via FTP (transmitted electronically), and the data processed by batch programs. Each bank could have its own schedule for running batch jobs but once day was/is typical.
  • Banks exchanged data electronically real-time. I think this started in 1980s when the international SWIFT standard & protocols reached Australia. But many banks continued to only process the data using batch jobs - keeping the delays of days up to a week.
  • 21st century: a system for real-time data transmission and real-time processing introduced in Australia called National Payment Platform (NPP) https://www.nppa.com.au/
    Facets/applications of NPP have different names: PayID, Osko, Osko BPay.

Success of NPP is dependent on multiple financial institutions adopting it!!!
For example since 2017 my credit union supports Osko, but the ANZ Bank used by a business I make regular transfers to does not support it therefore I cannot use my Osko to make those payments (they have to go via the old method so that ANZ can import them with their batch programs).

More info on SWIFT can be found at https://www.swift.com/ , http://www.bankswiftcode.org/blog/swift-system-in-banking-transactions/


#66

Anyone know when NPP for basic (BSB/account number) real-time transfers between the Big 4 Banks (including their subsidiaries) will be available?

Right now it seems to be a dog’s breakfast. You never know when the money will show up. Sometimes not at all in the case of a local credit union that must have had some teething problems. LOL.

I never wanted “real-time” transfers but I do want “predictability”. I want to know what to expect and I want to be able to verify expectations against reality. For example, then I know when to start chasing a bank for what’s happened to a transfer.