Payment question / New clearing times

Surely the concept of "clearing" is only really applicable for payments by cheque?

In the case of a bank transfer, your account will have been debited as soon as you requested the payment to be made. Once it hits the recipients account, the funds should be available to them immediately.

Chris

If you're referring to the new faster payment scheme, then how long it actually takes depends on whether *both* banks/BSs are part of it. If they are, then it's generally about an hour or so. If not, then it's up to 4 days.

Rob Graham

it will be cleared funds and available to withdraw as soon as it hits the other account.

Nationwide isn't yet on the Faster Payments Service. That means transfers to a Nationwide account go via the normal BACS route. You don't say who the "small building society" is so I can't say for sure whether they are on FPS, but as it's only really the big banks that are at present, chances are it won't be.

So if it goes the normal 3 day BACS route, what happens is... You post the transfer with Nationwide on the Sunday and the money appears to have gone from your account. Monday Nationwide process it and send it in their daily input file to BACS. Tuesday BACS process the file with your transaction in, sending the details to the recipient bank/bs. Wednesday (about 7am) the recipient bank/bs has the funds transferred into them and they credit their customer, hopefully straight away.

So, Wednesday is the earliest they could receive it.

BobC

Why don't you want it to arrive before Tuesday? It seems most odd that anyone would actually *want* money to sit in transit for at least a day!

And if the amount transferred is below any limit the transmitting bank /BS has imposed for the faster payment. e.g A&L have a £250 limit.

I was wondering that - they sent me a leaflet a few months ago saying they "plan" to have it available on all Flex accounts by June.

What a pathetic limit.

tim

What is pathetic is not how high the limit is, but that there is one at all. A two-tier system makes no sense at all, it's just as daft an idea as having first and second class post. It makes no sense to charge less for second class when it actually costs more to handle. The infrastructure for moving stuff around is the same for both classes but it costs extra to store second class post in a queue for the next day, and it also costs more to split post into the two streams.

What kind of limit is it, by the way? I presume it's a lower one, i.e. amounts above £250 go fast, amounts below go slow. Otherwise one could get around it by transmitting larger amounts individually in several chunks which are each below the limit.

If it's an upper limit, it could also be gotten around, but it would require the payee's co-operation. If you need to send £50 quickly, just send £300 and ask the payee to send £250 back straight away. :-)

ISTR that a limit of £10 is used by some (Nationwide?) ie only payments less than £10 can go fast.

See BBC Money box at:

It seems that the service can be intermittent, so you cannot know until the day you use it if it will work. Thus if you need to pay by a certain date you need to pay 3-5 days in advance anyway as you cannot be sure Fastpay will be available.

Seems to be only of use to pay money to friends/family in an emergency (if it works.) Moneygram may be a better option for that.

No, payments £250 and below go fast.

You are looking solely at the cost side. If all post was at second class prices then you would be losing out on the revenue for people who are willing to pay for a first class service. If all post was first class some people would be priced out of the postal system and you would be losing out on that revenue.

This may be of interest: (from

On 27 May 2008, the new Faster Payments Service (FPS) went live. This new system has improved money transfer speeds between different banks in the UK enabling account holders with one bank to make virtually instant payments to those with another bank. The system is still in its early stages and currently has a membership comprising the following banks: Abbey, Alliance & Leicester, Barclays, Citigroup, Co-operative Bank, Danske Bank (Northern Bank), HBOS, HSBC, Lloyds TSB, Nationwide Building Society, National Australia Group (Clydesdale and Yorkshire Bank), Northern Rock and the Royal Bank of Scotland Group (including Natwest and Ulster Bank). Between them, they represent 95% of the payments made in the UK. Those remaining banks and also building societies will be making decisions on how, when and if to join the scheme between 2008 and

2009. As FPS is intended for low value transfers, banks still use BACS for outgoing transfers of amounts exceeding a value they specify. These limits range anywhere from 250 to 10 000[1], depending on the bank.

Well, I wanted to make sure it got there not quite instantly, but not quite in a dawdling fashion either. It was for the last chunk of my mortgage which I wanted to ensure didn't reach before the the fixed term expired (so as to avoid early a penalty fee), but soon enough after so as to avoid any extra interest accruing on the remaining balance. From all the useful comments on the thread thus far, I can certainly see that sending money electronically still seems to be a hit and miss affair - its either there instantly* or not there instantly, but quite soon after (1-4 days?!) depending on a number of factors, maybe. Hence the question and hence the variety of responses! I won't know for sure until I phone and enquire as to whether the money has cleared I guess!