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OK chaps, fire up the abacus

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 Andy Gamisou 17 Nov 2020

The bank to bank payment system CHAPS - it is claimed that the 'A' in the acronym stands for "Automated".  This is clearly nonsense, else how would it take best part of 24 hours for a transfer to take place. 

What does it really stand for: Antiquated? Ancient? Apathetic? Apoplectic? A-piece-of-shit?

Answers on a postcard.  Mail it to the Maldives - it will probably arrive before your payment does into your bank account.

As you were.

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 Tringa 17 Nov 2020
In reply to Andy Gamisou:

Think it depends when the payment through CHAPS was made. Payment before a certain time should be transferred the same day, otherwise the following day.

Faster Payments is, as the name suggests, faster, often almost instant. A while ago I made a payment and got an email acknowledging it within a couple of hours.

Dave

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 Andy Hardy 17 Nov 2020
In reply to Andy Gamisou:

Computerised (yet) Half Arsed Payment System?

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In reply to Andy Gamisou:

I work building automated IT systems, and what it takes my customers a while to get there head around is Automated is not Instant, it is just removing the human steps (although they might still be in there as a quality gate). Sounds like the payment went in just after the deadline and had to wait a day for the next batch run.

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In reply to Andy Gamisou:

I'm pretty relaxed about CHAPS taking a day if it means there are some checks for large transfers. Why BACS takes days however...

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 Toby_W 17 Nov 2020
In reply to Andy Gamisou:

Am I using something different?  When I click to transfer money on my banking app it done in an hour or two if not sooner?

Cheers

Toby

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 Stroppy 17 Nov 2020
In reply to Toby_W:

For low value (typically under £50k for personal accts) payments the system used is UK Faster Payments which takes up to 2hrs, and often appears instantly on your app etc.

Higher value amounts use CHAPS or BACS. CHAPS is usually same day but with a cut off between 2.30-3.30 depending on your bank.

Antiquated is a good word, most of the payments technology in the UK is decades old and not really fit for purpose but too costly, and too risky, to overhaul so more bits just get bolted on top.

Edit for typo.

Post edited at 08:49
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 Rob Parsons 17 Nov 2020
In reply to Andy Gamisou:

The longer the bank holds on to your money, the more value that money has to the bank.

And you expect them to rush ... ?

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 Stroppy 17 Nov 2020
In reply to Rob Parsons:

Hanlon's razor.

If what you suggest was the case then CHAPS and UKFP would also take 3-4 days (or longer).

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 Andy Gamisou 17 Nov 2020
In reply to JoshOvki:

> I work building automated IT systems, and what it takes my customers a while to get there head around is Automated is not Instant

Yup, I've worked on plenty of these too.  Just letting off steam as it was an important transaction and I would have hoped a payment initiated the previous day would show up in the destination account before 16:30 the next day. 

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In reply to Andy Gamisou:

My guess is it works exactly as intended.  I bet they aren't investing in technology to speed things up because they make money from having a delay between when they take the money from one account and when they credit it to another.   My guess is that money in transit is like an interest free loan to the bank.

If they wanted it to go really fast, it would go really fast.  When it comes to trading systems they go to crazy extremes to make things fast.

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In reply to Andy Gamisou:

Ha, I've been trying to move my daughter's ISA from nationwide to NS&I since May. They have to request, in writing, to transfer funds. Then a cheque(?!) is written and posted. Unfortunately, NS&I got her DOB wrong twice so it was refused. Now the rates have dropped, it's become pointless. We've given up and cancelled it as I would dread her being able to access it when she's 18. 

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 GrahamD 17 Nov 2020
In reply to Andy Gamisou:

There is a lot to be said for adding deliberate delays to money transactions.  One is the unknown stability of the money markets if all inertia were to be removed and secondly, there is a deterrent against fraudulent activity if someone has to sit it out for a day or two before the transfer.

Remove the brakes at your own peril !

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 Stroppy 17 Nov 2020
In reply to tom_in_edinburgh:

> My guess is that money in transit is like an interest free loan to the bank.

Guess again

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 ThunderCat 17 Nov 2020
In reply to Toby_W:

> Am I using something different?  When I click to transfer money on my banking app it done in an hour or two if not sooner?

> Cheers

> Toby

I'm amazed by how quickly a payment can flip from one bank to another these days.  Instantly in most cases (I do a lot of bouncing cash between accounts on payday to meet qualifying criteria for high interest savings accounts, bill accounts etc)

And it quickly becomes the expectation doesn't it...until one time out of a thousand it's maybe delayed for an hour and I suddenly panic and think I've transferred it to the wrong account or I've been hacked and am about to have all of my savings cleared out.

I don't think it's ever guaranteed to be instant, it's just so well done that it appears to be the norm.  Few things impress me these days, but this really does (harking back to the days when you had to jump on a bus to the nearest branch, queue up, fill in a paper form, have your little bank book scribbled in my the teller )

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 ThunderCat 17 Nov 2020
In reply to cwarby:

> Ha, I've been trying to move my daughter's ISA from nationwide to NS&I since May. They have to request, in writing, to transfer funds. Then a cheque(?!) is written and posted. Unfortunately, NS&I got her DOB wrong twice so it was refused. Now the rates have dropped, it's become pointless. We've given up and cancelled it as I would dread her being able to access it when she's 18. 

Nationwide is the only bank I've ever had a real problem with, and it also involved transferring a cash ISA to them to take advantage of a better interest rate.  Gave up in the end

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In reply to Stroppy:

> Guess again

OK.

They could definitely make this near instantaneous if they wanted to and their customers would like it to be near instantaneous.

So they don't want to.

Why don't they want to?   They are banks so they undoubtedly have an angle where they make money by putting a delay in the system.   I'm not an accountant so I don't know exactly what the angle is but fundamentally it doesn't matter.  The point is the delay is unnecessary and if they are doing it on purpose it is because they are benefitting from it.

Post edited at 10:33
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 GrahamD 17 Nov 2020
In reply to tom_in_edinburgh:

I would argue that delay is probably necessary for overall stability.  Who knows what would happen with a load of computer algorithms playing an instantaneous money market ?

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In reply to Andy Gamisou:

Used to take a random number of days to transfer from Norway to the UK, now it happens in minutes, but not at the weekends. I guess even machines need a break!

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In reply to GrahamD:

> I would argue that delay is probably necessary for overall stability.  Who knows what would happen with a load of computer algorithms playing an instantaneous money market ?

We already have a load of computer algorithms playing a near instantaneous money market.  That's how currency trading works.

This isn't trading or playing the market its simply moving money from one account to another. No speculation involved.   Banks do near instantaneous transfers within their own systems all the time, they can approve credit card or cash card purchases in a second.   They could easily build infrastructure for near instantaneous transfers between customer accounts at all the major banks in the UK if they wanted.

Post edited at 12:34
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 Toby_W 17 Nov 2020
In reply to Stroppy:

Ah ha.

i remember many years ago with our mortgage it took several days for the money to move, I also remember them losing a load of it, when we went in the bank guy found it and click put it straight where it should have gone.  I remember thinking, whaaaaat!  It was also interesting him talking about fraud and how easy it was to spot a lot of the time due to maths and number formats.

Cheers

Toby

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 Stroppy 17 Nov 2020
In reply to tom_in_edinburgh:

They do have the technology - UKFP.

I don't agree that this is a cynical money-making scheme from the banks. It doesn't make sense as most domestic payments are just going into another bank account at a handful of banks. The net impact of all these payments on any given bank's deposits will be minimal. 

I agree with you that the payments system is poor and could/should be improved. However, as none of these systems are proprietary systems of a single bank there is a lack of incentive.

Secondly, there is a huge risk factor in taking away a system that processes payments worth millions of pounds each day. Many of these systems support other systems built into bank's central reporting, apps, online banking and so on. Trying to move these payments on to a new system is a potential disaster no one wants to be responsible for. The systems architecture is an appalling nightmare and needs overhauling but involves undoing decades of poorly planned tweaks, bolt-ons and 'improvements'.

Lastly, and probably most important, banks are potentially liable to huge fines from the PRA and FCA if they allow fraudulent payments or money laundering to go through their systems (unless they can show they have taken every reasonable step to avoid this). Most of the payments filtering is done automatically, but transactions flagged as risky will often go to a real human for review. If transactions are instant, it becomes much easier for fraudsters and money launders to disappear into the sunset with the cash before anything can be done. Either that or you have many times more legitimate payments being rejected because of fraud/money laundering risk.

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In reply to Toby_W
> Ah ha.
> i remember many years ago with our mortgage it took several days for the money to move,
Oh, the joys of dealing with solicitors & conveyancers:

"..plus an additional fee for transferring the money electronically"

"No thank you"

"I..I'm sorry?"

"No, please send it by horseback or whatever the standard system is, rather than this obviously exotic and expensive system of transferring money via the ether"

I got the real hard stare from Mrs Ridge at that point.

Post edited at 22:29
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 henwardian 18 Nov 2020
In reply to Ridge:

> "..plus an additional fee for transferring the money electronically"

> "No thank you"

I also can foresee this exact conversation playing out in my near future. I'm seriously considering just saying I'll pick it up from the offices as cash if they can't waive the money transfer fee. In the end though I suppose we all just get forced to bend over for the standard round of utterly unjustifiable fees.

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 waitout 18 Nov 2020
In reply to Andy Gamisou:

It stands for Auction, because that's what's being done with the value of your money between you OKing its release and it arriving wherever you sent it. Right now currency values are in high states of flux, so a longer window to pick the waves in adds to the value in some market somewhere few of us have probably ever heard of.

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