CHOICE membership

When is a bill paid using BPAY actually considered settled?


#1

How often do you see a biller make a statement to the effect that payment takes some time? a couple of days to process, time for the money to be received, etc etc.

This might be true for some forms of payment, but not with BPAY if you pay on a banking day within banking hours. The problem is, many billers either don’t understand the written agreement they have signed with BPay, or they don’t care - and neither it seems does BPay, even though they advertise settlement criteria on their website.

From https://www.bpay.com.au/Help-Centre/Personal-User/BPAY-Services-FAQs.aspx :

How long will it take for my payment to go through?
BPAY payments are acknowledged as paid the biller on the day the payment is made, as long as it is a Banking Business Day^ and the payment is made before the cut-off time set by your financial institution (usually the end of the financial institution’s business day) — contact your financial institution institution if you need to know more.
If you miss the cut-off time, your payment will be acknowledged by the biller and on the next Banking Business Day.
^Banking Business Day means a day on which banks in Sydney or Melbourne are able to effect settlement through the Reserve Bank of Australia.

Most financial institutions BPAY are involved with have a co-branded BPAY Biller Operations Manual which says in part under a section named similar to “Your general obligations” that “you must”“(treat Payments as being made on the Settlement Date) for the purposes of obligations owed to you by your Payers, treat Payments to you as being made on the Settlement Date;” and further defines _"Payer Direction means a direction from a Payer to their Payer Institution to effect a Payment to you as a biller through BPAY Payments, by debiting (for example, a payment) or crediting (for example, an Error Correction) an account or facility held by the Payer with that Payer Institution. Payer Institution means a financial institution participating in the BPAY Scheme with whom a Payer has an account facility from which payments can be made and who receives a Payer Direction from that Payer. Payment means a payment made, or to be made, by or on behalf of a Payer to you as a biller through BPAY Payments. Payment Cut-off Time means, with respect to a Payer and its Payer Institution, the time on a Banking Business Day set from time to time by that Payer Institution as the time by which that Payer Institution must receive a Payer Direction for it to be included in a Payment Instruction processed by it or sent to the CIP on that day." and Settlement Date means the day a Payer gives a Payer Direction to its Payer Institution. However, if the Payer gives the Payer Direction after its applicable Payment Cut Off Time on a Banking Business Day, or on a non Banking Business Day, the Settlement Date is the next Banking Business Day.”

Seems fairly clear - if you pay on a normal banking day in normal banking hours then the biller will consider your payment date to be that same day. Not the next day. Not three days hence. That. Same. Day.

They often don’t - and BPAY seem unwilling or unable to hold them to account, even though it amounts to false advertising on the part of BPAY to say your payment will be handled in such a way, have agreements in place to ‘ensure’ this happens, yet fail to enforce them.

BPAY aren’t alone in their indifference to this - the big billers (once you find someone who knows they have an agreement in place), the ACCC and the Commonwealth Ombudsman (because some of the big billers are Federal Government Departments) all maintain similar indifference. The only possible hopeful is ASIC, but if you’ve ever tried to fill in an ASIC complaint form you’ll know it’s a non-trivial exercise.

I’ve not heard of anyone actually being levied late charges/etc as a result of mishandling of BPAY payments, but there are other potential flow on effects of being seen to pay bills late. Of course, you could just pay the bill a day or three early, but that’s hardly the point - why should the customer be responsible in accounting for the billers mishandling of the payment?

If you take this up with billers, you’ll get all sorts of excuses. Particularly the ones around processing delay/etc - and to be fair it does place an onus on the biller not to issue overdue notices until they have received BPAY notifications covering the settlement dates of relevant invoices, but that is part of their agreement and again not the customers responsibility.

I hope that helps someone. Check your invoices/statements and see when your billers claim you settled the last account - you might be surprised. If they missed the mark, help them out by letting them know they are processing BPAY incorrectly :slight_smile:


Money for nothing – the business of delay in banking
Have you had problems with electronic transactions?
#2

There is one exception to the rule about the recipient having to regard the payment as being made on the same day, and that’s with share rights issues. Commonly, public companies offering their shareholders the right to purchase additional shares will set up a BPay facility for payment. There’s always a clearly defined time (usually 5pm) and date specified as the deadline for payment to be received. I was caught once and missed out on purchasing my share entitlement because my payment via BPay didn’t reach the company in time.


#3

I believe such a company (biller) would still be in breach of their agreement with BPAY, and in turn BPAY in either offering the payment method knowing their advertised settlement process would differ from the actual settlement process the biller will impose, or failing to pursue the biller for violating the terms of the agreement in place would be in a position of false advertising.
I don’t see any exceptions to the settlement day provisions on the BPAY website (reference above) or in any of the Biller Operations Manuals I’ve found online. Can you point to this? It’s quite possible I missed it.
It would seem that the problem here is that a biller should not offer a method of payment that has provisions inconsistent with how they want/need to run their business. My understanding is that the initial payment notification sent from BPAY to the biller that contains the settlement date and other details of the payment only arrives the next business/banking day at the biller. Given the biller is obliged by contract with BPAY to honour the settlement date advised, they must accept the payment as being made on that advised settlement date. If the nature of the associated transactions (shares, stock, whatever) are time critical and they cannot wait for advice from BPAY then it seems fairly clear they should not accept BPAY as a payment method, indeed legally they can not, while complying with the agreements they have in place.
If somewhere in the fine print there is an exception to this, I’ve missed it - but the BPAY website does not identify any exceptions other than complying with the timing of a banking business day and before the bank (not biller) cut-off …


#4

Don’t forget that there is a difference between payment from the debited account and the credit of funds in the receiver’s account.

I take the above to be that when a BPay is made by the payee, the amount is deducted on the day that the BPay is made and this is when the payment from the account is made (also see info from Suncorp below).

The above does not include timing for the amount to appear in the creditors account.

Like EFTs, this can be instantaneous (if the transfer is with the same banking institution or up to 24/48 hours for another Australian financial institution).

I could assume that the same would apply to BPay credits in the creditors account.

We bank with Suncorp and they warn on setting up Bpays to allow 1-3 business days from the payment date for the funds to be in creditors account. This may be a due to the funds being transferred after hours at Suncorp and then waiting until the creditors bank processes the transferred funds which could be the next after hours period (which would be at the end of the next business day)…thus the funds appearing in the creditors account in the day after next.

Suncorp also says…‘BPAY® payments can take 1-3 days to reach the biller once they are submitted. BPAY payments are backdated to the day that you process them in Internet or Phone Banking as long as they are submitted by 4pm on a business day.

An issue could occur if the creditor runs a ‘fail to pay’ query every day as this would pick up creditors which have not paid by yesterday’s due day as the money has not appeared in the creditors account…but if the same query was run a day or two later the monies would have appeared with payment before the payment date. I have had experience of a electricity provider doing this and now ensure that my Bpays for gas/electricity/insurance companies occurs 2 days in advance of the due date.


#5

No, the same does not and should not apply to BPAY - that’s the whole point of the agreements that are in place to honour the settlement date as the date the “payer direction” took place. It’s precisely to avoid this issue of consumers having to be concerned about notification delays, funds transfer delays etc - which is why BPAY advertise the feature as a benefit to consumers - whatever happens behind the scenes is supposed to be irrelevant to the payer.

In your case, Suncorp are unnecessarily confusing the issue by mentioning that payments take 1-3 days to reach the biller - their second point is the only relevant one, except the payment is not backdated as such, they are actually notified of the payment and what the settlement date was before they get the money, it is at that time they should acknowledge the payment as made on their systems and the settlement date as the date of payer direction. They get the money at a later stage, some days later …

It is up to the biller how they manage late payments - it is inherent in their decision to accept BPAY as a method of payment that they cannot know a payment is late until BPAY clear all advices of payment covering that last possible settlement date for your account.


#6

It would appear that one large health insurer is indifferent to BPAY’s stated terms if my experience is any indication. Last Friday September 23 at 9.46 am AEST I paid a regular monthly premium. On Monday morning September 26 I received a text saying my premium was overdue, or, if it had been paid, I should disregard the text. It strikes me that this is another case where the customer , despite doing the right thing, is belittled by a large public company that can’t even run a basic accounting system


#7

I paid my rates 2 days early, but the BPAY funds did not arrive into the Council’s account until the day after the rates discount period. I queried the 15% penalty and it was explained to me that it was my responsibility to ensure I paid in sufficient time for the funds to arrive in their bank account. Next time I paid the rates (two bills, water & general rates) due on the Monday, I paid on Thursday. The first said it would be paid Friday, the second paid 3 minutes later, said Tuesday (Monday being a Sydney holiday), both bank accounts were in Qld. This time I contacted the Council immediately and offered to pay by another method to preserve the discount and asked them to refund the BPAY when received. When I sent proof of BPAY time & date they agreed to preserve my discount, rather than refund. Their interpretation of BPAY is that I had paid on time, however the discount is only if the funds are in their account by the closing (due) date. The payment methods are limited and they don’t accept credit cards, so BPAY is the main payment method.


#8

Dodo Phone Internet Company says payment must be made within 7 days of account date which is emailed but their receipt of PAYMENTS is through a 3rd Party who doesn’t inform Dodo that any payment has been received for 3 days, I’ve tried to a payment receipt email from my payment page with my bank but Dodo billing has no email to forward it to so they threaten to cut my services on day 8 and i spend an hour on the phone being switched around then some one says we’ll extend your payment period (at a cost of $15 per day) what a joke


#9

Australian banks are pulling the wool over our eyes.
I refuse to believe that it can take 2-3 days for a bpay to be successful when a credit card transaction is instant.
They will pontificate and lie with feeble excuses to explain away this fact, however the fact remains that bpay can be effected immediately with existing technology.


#10

when I check my credit card company statement (latitude) the BPAY transaction doesnt show up online payment for 3 days

When it does however show on the statement; it shows as the Date I first sent from the bank,

A few other bills do the same they register the day I made BPAY from bank,

It can be problematic to make the bpay transfer with 3 days of the due date.

I have made BPay payment from my Bank on the Due date a few times and the Credit Card counts it as valid on time,
because they don’t reconcile and charge late fees and interest until end of month.

the internet company (not arrive on due date the 2 day delay) charged late fee it Did however show on-time on the statement
here I had a late fees (because presumably they reconciled the statement on due date instead of end of month or next billing period,
looks silly on a statement to get a late fee + an on-time payment .
so got it reversed


#11

@carlos, if you have not, I suggest you start from the top of this thread as there are citations about how Bpay works. Merchants who accept it have to accept a Bpay lodged on the due date as being paid on time even though they do not receive notice for a day or two afterwards. That is why a Bpay being lodged on the due date is paid on time, by definition, and any company that tries to dud you for a late fee is breaking their contract with Bpay and needs to be called out in writing with a demand they correct their errors. The standard warning about Bpay taking 2-3 business days encourages early payments.

FWIW I have direct automatic debit for my credit cards. If the payment is due on the 25th my card shows it was paid on the 25th, but as with Bpay my bank account does not show the withdrawal for an additional 2 days.


#12

Seems even a bank doesn’t (want to?) understand how BPay works

Now I should disclose I have some history with BankSA, and that I’ll never use them again (and haven’t for years) - but those stories are common and I’m sure many others could chime in with similar stories about all the banks.

More from the BankSA brains trust: https://www.banksa.com.au/online-services/internet-banking/faqs/paying-bills-faqs

Obfuscation?

As I read it, BankSA miss the mark on a number of points under the BPay Biller Agreement …

  • Payments clearing isn’t relevant to the customer, “settlement date” is.
  • how long it takes for the ‘money to reach the biller’ - see last point
  • whether they take more processing time is irrelevant to the customer, and transparent
  • whether other parties drop the ball doesn’t remove the requirement to honour the settlement date

Isn’t it reasonable to expect a bank to abide by the same rules it pushes on its customers (rules defined by BPay).

Maybe something Choice could formally investigate?


#13

I am wondering if all that standard text is about posting on statements, transactions, and web sites, not the technicalities of a Bpay payment being on time if it is lodged on the due date and the due date is a business day.

Has anyone been dinged with a late fee for a Bpay lodged on the due date that was a business day, with some evidence they can post with identifying details redacted?


#14

Only hearsay. I’m sure there has been comments on this forum somewhere about people being ineligible for something due to late payment and of course there are plenty who have received nasty emails/letters/texts and while that doesn’t cost it causes angst. I know someone who paid over the phone when they got a late payment email thinking their BPay had failed - and ended up paying twice.

It shouldn’t be the case that anyone gets (officially) a bad credit rating either - I think 14 days late is the minimum before it can go on file (??).

There are a couple of variations though - billers who react too quickly, cry wolf, but eventually catch up and record the correct dates, and those who don’t catch up and record the correct dates - ie where settlement date is recorded incorrectly on the ‘official record’ as it were. Of the latter - Internode are one example who did this, some years back (2009 maybe - yeah its a while) and Child Support Agency are an example of a current and completely unrepentant offender who BPay refuse to deal with (I know of a case where complaints were made to CSA, BPay and to the Commonwealth Ombudsman - without any action). This might not result in a late fee, didn’t for this person, but when matters like that are at hand it might have legal implications in hearings/arguments/submissions and could reflect badly with other government departments who scrutinise individuals financial records for specific purposes.


#15

I did start at top was simply expressing my experience with the handling of BPAY on the final due date and treatment in context to a provider not mentioned in the thread.

their computer or manual clerk system the provider uses to reconcile that account;
occurred on the due date
the system couldn’t know of past/pending payments without leeway.so calculated a failure to pay.

Banks for example generate your statements, fees, interest and penalties a day of two after the end of the billing cycle to ensure any debits credits BPAY etc trickle in / out.

however that provider decided to claim all fees and interest income before BPAY (2 day cooling period) completes.
and they may likely have a business model where if you don’t notice it on the bill they will keep it as general revenue. i doubt some providers would proactively fix it for people


#16

It appears you had to contact them to reverse the bogus late fee, or did their system do it automatically?

If it happened again try sending a formal written complaint to the business as well as Bpay citing the Bpay T&C. I suspect it is just a sloppy IT implementation of their business rules.


#17

Dodo use a third party payment service for payments, and even though when you make a BPay payment your bank immediately advises the receiving bank , the 3rd part service does not advise the internet company for up to 7 days that payment has been received , so I counted and got a email receipt from my bank went online to DoDo and sent a screen shot copy and pasted to their online chat to show that my payment had been made, and it was their payment service not advising Dodo Accounts payment had been made.


#18

OT re Vicroads and although this is not a bill payment, I sometimes have a payment to make for investment offers that accept Bpay in lieu of a form and cheque, no EFT or card option, that Very Clearly state they must receive the Bpay by 5:00PM AEST on the date, with a warning to check the bank schedule (eg send it 2 days or more prior).


Contest a Cash advance fee on a BPAY payment? Vicroads
#19

That isn’t unusual, but I believe it is against their biller agreement with their financial institution. From what I’ve seen, the biller agreements all appear to be the same, and I’ve had billers ‘reprimanded’ (apparently) and change their wording and behaviour by making a complaint.

They key point is “Settlement Date”

For example: BPAY Biller - Operations Manual, CommBank

On Page 3:

1.Your general obligations
You must:
[…]
(treat Payments as being made on the
Settlement Date) for the purposes of obligations
owed to you by your Payers, treat Payments to
you as being made on the Settlement Date;

Page 9:

9 Meaning of words
[…]
Banking Business Day means any day on which banks
in Melbourne or Sydney are able to effect settlement
through the Reserve Bank of Australia.
Biller means you as a participating biller, and any other
person who has entered into an agreement with a Biller
Institution on substantially similar terms to those in your
Biller Agreement.

Page 11:

Payer means a Payer of a Biller who uses BPAY
Payments to make a Payment to a Biller.
Payer Direction means a direction from a Payer to their
Payer Institution to effect a Payment to you as a biller
through BPAY Payments, by debiting (for example, a
payment) or crediting (for example, an Error Correction)
an account or facility held by the Payer with that Payer
Institution.
Payer Institution means a financial institution
participating in the BPAY Scheme with whom a Payer
has an account facility from which payments can be
made and who receives a Payer Direction from that
Payer.
Payment means a payment made, or to be made, by
or on behalf of a Payer to you as a biller through BPAY
Payments.
Payment Cut-off Time means, with respect to a Payer
and its Payer Institution, the time on a Banking Business
Day set from time to time by that Payer Institution as the
time by which that Payer Institution must receive a Payer
Direction for it to be included in a Payment Instruction
processed by it or sent to the CIP on that day.
[…]
Settlement Date means the day a Payer gives a Payer
Direction to its Payer Institution. However, if the Payer
gives the Payer Direction after its applicable Payment
Cut Off Time on a Banking Business Day, or on a non
Banking Business Day, the Settlement Date is the next
Banking Business Day.

So if you pay the bill on the due date, and the due date is a banking day, and you direct the payment before the cut-off time that day, you have paid on time - regardless of when they get the cash. There does not appear to be a clause in any of the agreements I’ve perused that allows them to modify the concept of “settlement date” … I’d be very keen to hear if there are legitimate exceptions to this agreed by Bpay per agreement, or more specifically non-standard agreement. I do know Bpay don’t always press the issue - some entities appear to be untouchable - think feds …

Back to the subject - I pay a number of bills through Bpay with credit card - with no issues. In cases where the biller does not accept credit card I get an message on CommBank that the biller does not accept credit card and I need to change account type for the payment before it can be submitted.


#20

But, it is not a bill with a due date and in these cases it was an entitlement offer with a closing date. Since one does not send forms in if the offer is taken up by a Bpay payment, and your Bpay numbers reflect your account offer, they must have the ‘acceptance’ by the date. So that catch-22 supports the due date. If they elected to accept payment on the Bpay schedule they would be in breach of their offer T&C and might get to meet with ASIC :wink: