Why does it still take multiple days to transfer money from one bank to another?
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I’ve been wondering about this for a while and I post this here hoping that someone in the financial world can explain this to me. In this modern day and age, why does it still take multiple days (up to 7 working days) to transfer money from one bank to another? I mean… I always use net banking (I never go in to the bank with the exception of getting a new card every x years) so from the moment I click the send button on my payment, the money should be in the other bank account, right? There is no physical action needed. Everything is done electronically. Just like sending an email, right?
You would think that it would only take seconds but instead it takes up to 7 working days to get money from one bank to the other. Is someone physically taking this money from one bank to the other and is that the reason for this delay? Probably not… “It’s because you pay interests during these days and that’s how banks make money”, someone replied on Twitter this morning. Wait… What? Interests? For what? To do a transfer? A transfer that I entered in to the system using net banking? A transfer that is done electronically? I get that I would have to pay something if someone at the bank has to actually do something. But when I do all the work, why should I still pay for this? I am already paying €30 a year for the “privilege” of using a bank account. That’s €30 to do all the work yourself… And banks still managed to get in trouble?
So… Is this the biggest scam in the world? Or is there really a perfectly valid reason why this takes so long? And how come PayPal is able to do it like this? You enter the recipient, enter the amount, click send, and *boom* the recipient has money. Sigh… Sorry for the rant, but this has been bugging me for years and I really hope someone in banking can explain this… but I’m not holding my breath.
</RANT>
17 Comments
Feel free to follow me on: 
“Is this the biggest scam in the world?”
Oh yes, banks are.
I guess Bank A holds the money to make (even more) money with it for a couple of days and so does Bank B. And I totally feel your pain, it’s so bloody frustrating. What I do from time to time when something like this happens is go to the bank office, call the director, explain the problem and _then_ take my money somewhere else. It’s only a tiny-winy scratch on their face but it feels good. The problem is you move to another bank that operates pretty much the same policies : (
The banks invest your money. and the more days the bank has your money the more days they can earn money on top of your money. and if you talk about a money transfer from lets say 100euro and the bank can invest that 100euro 3 more days they can maybe earn 1 or 2 cents on top of it ( probably lower i don’t know..) and if they do that on all there accounts at the end of the day they earned thousands and thousands of euro’s .. for just stalling there transaction for a few days which people seem to accept. maybe because like you mentioned, that they think someone physically taking this money from one bank to the other.
I don’t know what’s your bank, but when i use kbc it normally only takes 1 day (or less)
Near real time payments are coming to the UK, starting from June 2008, but progressing very slowly.
Serge, it doesn’t mean that everything in the world working through internet it should be a click away or executed as fast as your eyes blinks!
No, that is not the case.
When it comes to Money transfer between banks that are a lot of procedures that has to be done, and Yes some manual things will be done and some check will be done as well.
Also when it comes to Security, i think taking 7 days is much worth than your money will be stolen.
Yes, this is where User Experince contradicts with the surrounding facts and it doesn’t always goes for the sake of user.
and keep wondering, as transactions differ from bank to another and guess what it is even differ from branch to another within same bank
regards,
mohamed moussa
UX GURUS
As far as i am informed by my Latvian bank’s staff, they are actually gathering multiple transfers together and sending them out typically once a day. I guess they have some transaction expenses as well and this is how they save on them. This, however, does not justify 7 days…
But I am afraid transactions are not always that automated; recently my bank added a new feature that offers sending money to an other EU bank account in less time if IBAN and other details are perfectly filled. They also implied that in the details are not perfect, the operation is done the “standard” manner – an actual person is involved..
And further more in order to put some cash on your account In France you have to put the money in an envelope along with your details and wait for a clerk to actually do that. The banks are not that technologically advanced as they are perceived.
Hi Serge, I can feel you on that! :) But pay 30 Euro’s every year for using netbanking is rip-off. You should try other “smaller” banks in Belgium like Argenta. I pay nothing and I get the perfect service, free netbanking, free visa (not the use, but the card), free other cards and pretty much one of the highest intrest-rates available…
Just my 2 cents ;-)
Greetz
Jonas
Yes, it is a pian that i take that long. In my bank I can transfer the next day or so not seven. I just found out another scam. I have to wait for 3 week to transer my telephone account to another provider. Why that long?
//Jens
I am going through the same headache of a banking situation. I just moved to the US and have both an american and canadian account and have had to transfer some money from my US account to my Canadian account so that I can pay off some bills that i still have in canada. I can’t pay them online from my US account so i have to make the transfer ($30 US / transfer) and it has proven to take up to 10 days for things to go through. Very frustrating because during that period the money disappears and i have no access to any of it.
Banks sux, I am waiting for a wage deposit to enter my account. 2-3 DAYS! Why are banks allowed to use our money like this, they should be paying us interest per day for the use of OUR money. One day banks will operate in a transparent business like manner and stop all of this wishy washy business practice that one would expect from a used car salesman! We do live in a digital age where computers process our transactions with security encryptions, the computers can also tell if you have the right amount to transfer! I hope everyone who reads this questions their bank, ask why it takes so long for a transfer, I hear on the grapevine that all the pending payments are traded on the overseas financial markets that have a guaranteed return, why should we not be part of the investment.
Just my two cents worth!!, o plus bank fees & tax :)
Hay dude,, in fact this good topic tp talk about,
I think my dear we think in the same manner ,,”why does’t take long time”
I wonder as well what are the steps for transferring money from bank ,,SINCE “”we are no longer age stone ,therefore thee is no money transfer through the horses or on foot”" ,actually I would like to know how the money transfer as well
thanks & best wishes
SOUL
If you go to the hassle of phoning the bank and paying the premium rate call for however many £££’s per minute…then it does happen almost instantly. In my experience, the bank will tell you the transfer can be up to 48 hours, but really it can be anywhere up to 5 days…If the funds havent transferred after the 48hours, or if you do indeed phone the bank in the 1st place, it will transfer instantly.
I don’t so much mind the transfer taking 3 or 4 days as I mind the money being removed from one account and not appearing in the other until 3 or 4 days later. Does the money take a vacation somewhere?
It is a total mistery as to where our money goes. I am in Australia and what I cannot understand is that we have the same bank as my daughter and if I was to transfer money to her account it is there with in minutes…however my husbands work is with the same bank and it takes up to 48hrs to come through.
I too believe it to be a rip off, as soon as you click transfer, the money is taken from your account, yet it takes up to 3 days for it to go into the account you select to transfer it to.
Banks have a lot to answer for money grubbing bottom feeding slime buckets.
If every one with an account at your bank removed their money from the bank and refused to use them until they gave fair trade for YOUR MONEY eg a reasonable interest rate, free access, No Admin fees etc
they would be forced to listen to our demands and comply they should be thanking us for putting our trust in them to hold on to our money for us(and make heaps on the stock market while they hold it for us)
The same could be said for Petrol stations, supermarkets the list goes on
We need to stand up to these big business’s that we use in day to day life and demand a fair go
when is enough enough?
I call BS. My paycheque from my employer gets deposited in my bank account the day they send it electronically. Are the banks trying to say the process is different for interbank transfers and paypal etc. I suspect it is a marketing strategy to keep your money in one institution and some form of “kiting” activity to earn a few more pennies.
This kind of thing should be legislated but the organizations behind the rules for banking in various countries probably lack the technical savy or the will do examine the issue throughly. Direct bank to bank transfers in Canada have a service fee and a seperate process from bill paying (bill paying is free but takes only 2-3 days)
I am constantly seeking alternatives to reduce fees and make things simpler. Got an ING account so I can handle transfers from one bank to another without service fees but likely the bank will charge me a fee to transfer to ING. I’m investigating that.
Well folks, if you are angry about bank to ban transfer delays you haven’t heard ANYTHING yet! I made an international wire transfer through a well respected clearing house. I did all the homework in advance, making sure all the details were accurate, the recieving bank in the US knew it was coming and for how much AND tracked my SWIFT code. First bank transfer? 6 weeks and I still do not have my money yet is shows withdrawn from my German bank same day as request! German bank shows the wired it 3 days later and US bank says, sorry, we can hold as long as we need. NOT. Transferred second amount as i now missed my real estate closing date, and find wire transfer was received by the US bank 3 days later – it showed as pending on my account but conveniently disappeared a day later! Had to call the Presidents line only to find they needed to verify all info twice – excuse for more delays. Was told the money would be release same day all information was verified. NOT. 3 weeks later, money still not in my hands. I got a lawyer. I am suing both large banks for illegally holding funds. Now third bank, a smaller oone with ties to Canada, says we transfer international wires same day arrived! Great! Here I sit, 6 days after wire confirmed sent by Germany and I still have no access. If the American people thought we had banking problems last year, we are in for a huge surprise! This is nothing but embezzelment you ask me!!!! And in the mean time I LOST the house deal. Hopping mad is an UNDERSTATEMENT. Trust no one in the banking industry!!!
Haha, I’m sorry to hear that…
Banks in Poland would usually have three so-called Elixir sessions when the banks are “syncing” wire-transfers (separate for incoming and outgoing transfers), so you have at least two opportunities a day to get a transfer…
American banking system seem to work akin to those of a developing country… I can only guess it’s because of greedy Jewish bankers wanting to skim some of your dough in the meantime ;-)
Otherwise how would you explain checks cashing in a week…. (are you f@@@ing kidding me? you guys built the internet how come you can’t afford a banking system that works?)
And those wire transfers costing you a fortune. What are they charging for? A person or an armoured truck carrying your $$$ to another bank?
Laughable!