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BACS transfers

Last post Tue, Dec 16 2008, 3:25 PM by him87. 5 replies.
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  •  Tue, Dec 16 2008, 3:25 PM

    Re: BACS transfers

    Hi Anne,

    I understand what you mean, and if fact faster payments will be the route through which bacs will be modernised - if you look on BACS's website today, you will see that they are celebrating their 40th anniversary! A new system is long overdue, considering the evolution of technology over that time - I'm sure that 40 years ago it was not imagined that we could talk like this!

    You are correct in saying that the OFT have been investigating the BACS process, but this is only to ensure that banks are adhering to the 3 / 4 working day timescale, which is an industry-standard.

    Without widespread acceptance of the faster payment system, CHAPS is an alternative, and most banks tend to provide this service subject to the payment of an administrative fee. The timescales are generally same or next business day. CHAPS should continue to exist after complete adoption of Faster Payments since APACS and the participating banks will impose transaction limits on faster payment transactions - currently these are £10000 for individual transfers and £100000 for standing order payments, but banks will be allowed to set lower limits. This may be to limit the possibility of fraud through the system - CHAPS generally requires extra security, such as presenting ID at a branch or written requests.

    It should be noted that faster payment may not be extended to all accounts, particularly savings account which do not have a sort-code - often building societies and former building societies have such accounts which are identified by a roll-number. Faster payments will take some time to be fully implemented because of the complexity of the change - it is vital that the change is delayed until individual banks' systems are ready. Having personal experience in CHAPS, it can be very difficult to resolve problems when payments go awry between 2 banks.

    Banks aren't required to offer the service, however they will find it is commercially advantageous to do so. If you don't want to pay for CHAPs and bacs takes too long, then you could withdraw cash from one bank and pay it in at another, but I certainly wouldn't be spending my Saturday mornings doing this. With Car Parking charges as they are, I think I'll accept the lost interest!

    Hope this helps,

    Paul

    • Post Points: 5
  •  Tue, Dec 16 2008, 12:53 PM

    Re: BACS transfers

    him87:

    Hi Anne,

    I find it a bit strange that Halifax were able to use the faster payments facility if NBS does not have the faster payments capability - as I understood it both parties must have the faster payments capability.

    If NBS or Midshires have advised you that they are not enabled for faster payments (for whatever reason), then BACS is your only interbank transfer option, and the timescale for this transfer is 3 / 4 working days (depending on the time of day the payment was sent). I must also contradict your 'cynical' husband: the banks do not earn interest on 'money in transit', because when you send a payment the money is credited from their ledgers immediately (which appears as a debit from your account). The reason it takes (until faster payments is more widely used) 3 / 4 working days is due to the process that banks use to exchange money - the funds go directly to exchange accounts that BACS-participating banks have at the Bank of England, which, incidentally, are non-interest bearing. More information can be found at http://www.bacs.co.uk/ and http://www.apacs.org.uk - the latter has a sort-code checker for finding sort-codes that accept faster payments.

    I don't understand why you want to complain - surely you have been doing the transfer and accepting the current 3 / 4 working day timescale for a while now. There is no-one you can complain to, as not all banks are faster-payments enabled, and so they are still following the 'rules', as with cheque clearance.

    Paul

    Thank you for your reply Paul. I was interested in what you said about the non-interest bearing exchange accounts, but I still feel that the 3-4 day processing is inefficient and don't understand why it can't be speeded up - Halifax have done this, why can't faster payments be widely available? Your comment 'surely you have been doing the transfer and accepting the current 3 / 4 working day timescale for a while now' is of course true but I wouldn't say I 'accept' this, there's just no other option for transferring money. I have just found out from the OFT website that they have been looking into this BACS transfer time for some months now, having previously investigated cheque clearance times. Not sure whether anything will change but I think it proves I'm not the only one who thinks this is unacceptable.

    • Post Points: 20
  •  Tue, Dec 16 2008, 12:03 PM

    Re: BACS transfers

    Ahh...another mystery solved. Thanks Watson!

    Paul

    • Post Points: 5
  •  Tue, Dec 16 2008, 12:00 PM

    Re: BACS transfers

    By the way, Birmingham Midshires are part of Halifax, so that's probably why it's same day

    • Post Points: 20
  •  Tue, Dec 16 2008, 11:53 AM

    Re: BACS transfers

    Hi Anne,

    I find it a bit strange that Halifax were able to use the faster payments facility if NBS does not have the faster payments capability - as I understood it both parties must have the faster payments capability.

    If NBS or Midshires have advised you that they are not enabled for faster payments (for whatever reason), then BACS is your only interbank transfer option, and the timescale for this transfer is 3 / 4 working days (depending on the time of day the payment was sent). I must also contradict your 'cynical' husband: the banks do not earn interest on 'money in transit', because when you send a payment the money is credited from their ledgers immediately (which appears as a debit from your account). The reason it takes (until faster payments is more widely used) 3 / 4 working days is due to the process that banks use to exchange money - the funds go directly to exchange accounts that BACS-participating banks have at the Bank of England, which, incidentally, are non-interest bearing. More information can be found at http://www.bacs.co.uk/ and http://www.apacs.org.uk - the latter has a sort-code checker for finding sort-codes that accept faster payments.

    I don't understand why you want to complain - surely you have been doing the transfer and accepting the current 3 / 4 working day timescale for a while now. There is no-one you can complain to, as not all banks are faster-payments enabled, and so they are still following the 'rules', as with cheque clearance.

    Paul

    • Post Points: 20
  •  Tue, Dec 16 2008, 8:56 AM

    BACS transfers

    I'm surprised that there seems to be nothing on this site about the amount of time it takes for a BACS transfer between banks. I've recently opened an AA Internet Saver (operated by Birmingham Midshires) and discovered that while it takes 3-4 days to transfer funds by DD from my Halifax current account, I can initiate a transfer from Halifax online, quoting my account number as reference, and it goes into the AA Saver the same day because Halifax have a faster payments facility. This means I lose no interest at all, but the ability to do this is not mentioned anywhere on the AA Savings site, I was told on the phone that it was not advisable, and I had to search to find the account number. Having just opened an Internet Saver with the Newcastle Building Society, I called them to ask what their account number is so that I can operate the account the same way, but was told this is not possible because they are a building society (as is Midshires) and do not have a sort code! I did manage to find a sort code and account number on some correspondence about intial investment but was told that if I used that to initiate a transfer, it would be rejected. Why is this? Is it, as my cynical husband says, so that the building societies can help themselves to the 4 days interest on money in transit, because it surely can't take 4 days for an electronic transfer between banks? Can you help me on this subject, and is there anyone I can complain to? There has been a lot of discussion about cheque clearance times, but nothing about BACS.
    • Post Points: 35