In a world of smart tech, Faster Payments (UK), ACH, and EPN (US), why can’t bank accounts show truly real-time balances based on all posted transactions?
Payments
Asked by Question Bot05/Jul/20151 answer
1 Answer
F
Faisal Khan
Answered 05/Jul/2015
Lots of questions asked, so here are the answers:
In the UK, if the direct-debit is between two people, i.e. interbank funds transfer, the balances (correctly) in both the debit and credit accounts will reflect after a few minutes at best.
However, if the Debit card was charged somewhere, the amount from your account will be deducted and settled into the merchant's account as per the agreement the merchant has with its acquirers. In some cases, depending on the merchant and the acquiring network / processor they are using, the funds may be authorized, but not deducted. In some cases the authorization itself is the blocking of funds. In certain countries it is not. This is a merchant side issue and their upstream acquirer issue, not a direct-debit problem per se.
The US has a very archaic payments system, so lets not even talk about that. They have no clue as to what a real-time direct debit is, unless of course you're playing/paying with Dwolla and their Fisync service.
Rest of the world, where real-time switches are enabled, Singapore, Pakistan, Hong Kong, most countries in EU, the direct-debit charge is almost instant from your account, but held by the acquiring bank for some time (in the event of a reversal/fraud, etc.) before it is paid out to the merchant.
The consumer might appear to be at the mercy of the banks, or what you have termed it as: lottery, however that is not the case. The settlement times are very well defined. Especially for direct debit (be it weekday or weekend). The problem comes forth when you have one bank member of Faster Payments and one that is not. In very many countries, the settlement times between banks are now being performed a number of times during the day, Singapore for example does it not every 6-hours (this is bank-to-bank settlement, the person-to-person payment is almost instant).
In the UK, if the direct-debit is between two people, i.e. interbank funds transfer, the balances (correctly) in both the debit and credit accounts will reflect after a few minutes at best.
However, if the Debit card was charged somewhere, the amount from your account will be deducted and settled into the merchant's account as per the agreement the merchant has with its acquirers. In some cases, depending on the merchant and the acquiring network / processor they are using, the funds may be authorized, but not deducted. In some cases the authorization itself is the blocking of funds. In certain countries it is not. This is a merchant side issue and their upstream acquirer issue, not a direct-debit problem per se.
The US has a very archaic payments system, so lets not even talk about that. They have no clue as to what a real-time direct debit is, unless of course you're playing/paying with Dwolla and their Fisync service.
Rest of the world, where real-time switches are enabled, Singapore, Pakistan, Hong Kong, most countries in EU, the direct-debit charge is almost instant from your account, but held by the acquiring bank for some time (in the event of a reversal/fraud, etc.) before it is paid out to the merchant.
The consumer might appear to be at the mercy of the banks, or what you have termed it as: lottery, however that is not the case. The settlement times are very well defined. Especially for direct debit (be it weekday or weekend). The problem comes forth when you have one bank member of Faster Payments and one that is not. In very many countries, the settlement times between banks are now being performed a number of times during the day, Singapore for example does it not every 6-hours (this is bank-to-bank settlement, the person-to-person payment is almost instant).