| The speeding up of clearing [message #380008] |
Mi, 12 April 2006 18:14 |
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A few months ago I remembered hearing in the news that there was plans afoot
to speed up the time it takes for transfers and money to clear between
different banks and building societies. Given that in other countries who
use the same IT mechanisms as we do (ie computerised payments) and clear
money on the same day, I think we can all appreciate that this is long over
due.
Anyone know what the timescale is from goverment for this financial
"revolution"?
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| Re: The speeding up of clearing [message #380010 ] |
Mi, 12 April 2006 18:29 |
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<nospam [at] invalid.invalid> wrote in message
news:m5SdnS8Vgo0cuqDZRVny3w [at] bt.com...
>A few months ago I remembered hearing in the news that there was plans
>afoot to speed up the time it takes for transfers and money to clear
>between different banks and building societies. Given that in other
>countries who use the same IT mechanisms as we do (ie computerised
>payments) and clear money on the same day, I think we can all appreciate
>that this is long over due.
>
> Anyone know what the timescale is from goverment for this financial
> "revolution"?
>
I'm sure that 'interested parties' will endeavour to slow if not halt any
moves to implement same day money transfers.
Adrian Smith
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| Re: The speeding up of clearing [message #380016 ] |
Mi, 12 April 2006 19:45 |
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Very true Adrian. The 'interested parties' make too much money by
holding onto balances within clearing to give it up that easily. AFAIK
it is presently possible to clear transfers almost instantaneuously but
there is an inbuilt delay in the system for the old historical reasons
when cheques used to be sent from bank to clearing centre to bank.
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| Re: The speeding up of clearing [message #380017 ] |
Mi, 12 April 2006 20:04 |
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> Very true Adrian. The 'interested parties' make too much money by
> holding onto balances within clearing to give it up that easily. AFAIK
> it is presently possible to clear transfers almost instantaneuously but
> there is an inbuilt delay in the system for the old historical reasons
> when cheques used to be sent from bank to clearing centre to bank.
Well of course, but this can't continue forever and I'm sure it was some
kind of parliamentarian of sorts that first raised the issue when I heard
about it in the media as I said a few months back in the first place, so I
do hope it can be acted upon and bought in as new legislation sooner rather
than later.
Failing that, maybe we can hire in some French hooligans to go out and
protest for us.
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| Re: The speeding up of clearing [message #380033 ] |
Do, 13 April 2006 00:28 |
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In message <m5SdnS8Vgo0cuqDZRVny3w [at] bt.com>, nospam [at] invalid.invalid
writes
>A few months ago I remembered hearing in the news that there was plans afoot
>to speed up the time it takes for transfers and money to clear between
>different banks and building societies. Given that in other countries who
>use the same IT mechanisms as we do (ie computerised payments) and clear
>money on the same day, I think we can all appreciate that this is long over
>due.
>
>Anyone know what the timescale is from goverment for this financial
>"revolution"?
This link
http://www.oft.gov.uk/News/Press+releases/2005/94-05.htm
gives your answer I think.
Banks would love to get rid of paper, especially cheques, but despite a
marked reduction in the use of cheques and paper based bank giro credits
millions of people still want to use them. I find it particularly
amusing when people say things like 'well they've got computers, why
cant it be quicker? But I always use cheques myself, and never use
direct debits,' It just sums up this country.
'Truncation' of the cheque clearing system was enabled by the Cheques
Act 1992 but to remove the cheque clearing cycle is impossible if people
insist on using the damned things.
The credit clearing is another matter. The link above doesnt mention
paper based bank giro credits - it only refers to internet and automated
payments.
Comparisons with europe dont stand up because no other country in the
world has the bank clearing network that exists in this country, sadly
though our banks substantial legacy IT networks, despite having been the
largest and earliest in the world are now lagging a bit.
I always laugh when I see remarks that seem to assume that banks are
somehow making huge wodges of dosh from the 'interest' that is earned by
all the money in the clearings. When somebody pays a cheque into their
account at a 3rd party branch, until the cheque clears there is no money
upon which interest can be earned.
--
John Boyle
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| Re: The speeding up of clearing [message #380040 ] |
Do, 13 April 2006 12:29 |
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john boyle <john [at] johnboyle1.demon.co.uk> wrote:
>
> Banks would love to get rid of paper, especially cheques, but despite a
> marked reduction in the use of cheques and paper based bank giro credits
> millions of people still want to use them. I find it particularly
> amusing when people say things like 'well they've got computers, why
> cant it be quicker? But I always use cheques myself, and never use
> direct debits,' It just sums up this country.
>
There is one very good reason that I still tend to pay my credit card
monthly payments by cheque and that is that it provides me with a
record that I have done it.
Very, very few of the online banking systems I use (and I use HSBC,
Abbey and Nationwide) provide even rudimentary ways of seeing a
history of payments or other transactions. OK, I can look at a
statement but it gives little clue as to where a payment went, what it
was for, etc.
One particular weakness of the bill payment system (Abbey I know is
like this, I have complained about it) is that once a payee is set up
you can't get to see the payee's account details so there is no way to
check if a payee on your list is the actual one you want.
On line banking needs to improve considerably before people (well me
anyway) will be happy moving away from cheques.
Oh yes, and one final need before we go 'chequeless', how do I pay
money to someone whose bank details I don't know completely?
--
Chris Green
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| Re: The speeding up of clearing [message #380041 ] |
Do, 13 April 2006 10:43 |
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> http://www.oft.gov.uk/News/Press+releases/2005/94-05.htm
Hmm, so they've set up a Task Force (makes me laugh to think of these groups
of "experts" needing to join together to work out what would happen in an
area they are already supposed to have achieved expertise in - surely they
should already know what would happen / be needed by virtue of being
experts?! Surely they could just have a few meetings and then decide on a
course of action). I note they've had 7 months so far...
> I always laugh when I see remarks that seem to assume that banks are
> somehow making huge wodges of dosh from the 'interest' that is earned by
> all the money in the clearings. When somebody pays a cheque into their
> account at a 3rd party branch, until the cheque clears there is no money
> upon which interest can be earned.
> --
> John Boyle
Leaving cheques out of the equation, I'm more interested in knowing how /
why my banks take so long to basically "clear" a credit from one of my
online banking accounts to another? I know from being in IT this is
literally an computerised authentication process with an update of a
database somewhere which should take seconds not days!
And that is where I'm sorry - someone - IS making money on my money. It
leaves my account instantly when I transfer and then it only appears in my
other account in 3 days time. Someone has made interest on those 3 days and
it wasn't me. That's what's got to stop in this scenario, it should all be
authenticated immediately and then updated (cleared) on both sides.
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| Re: The speeding up of clearing [message #380055 ] |
Do, 13 April 2006 12:09 |
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On Thu, 13 Apr 2006 09:43:16 +0100, <nospam [at] invalid.invalid> wrote:
>> http://www.oft.gov.uk/News/Press+releases/2005/94-05.htm
>
>Hmm, so they've set up a Task Force (makes me laugh to think of these groups
>of "experts" needing to join together to work out what would happen in an
>area they are already supposed to have achieved expertise in - surely they
>should already know what would happen / be needed by virtue of being
>experts?! Surely they could just have a few meetings and then decide on a
>course of action). I note they've had 7 months so far...
>
>> I always laugh when I see remarks that seem to assume that banks are
>> somehow making huge wodges of dosh from the 'interest' that is earned by
>> all the money in the clearings. When somebody pays a cheque into their
>> account at a 3rd party branch, until the cheque clears there is no money
>> upon which interest can be earned.
>> --
>> John Boyle
>
>Leaving cheques out of the equation, I'm more interested in knowing how /
>why my banks take so long to basically "clear" a credit from one of my
>online banking accounts to another? I know from being in IT this is
>literally an computerised authentication process with an update of a
>database somewhere which should take seconds not days!
>
>And that is where I'm sorry - someone - IS making money on my money. It
>leaves my account instantly when I transfer and then it only appears in my
>other account in 3 days time. Someone has made interest on those 3 days and
>it wasn't me. That's what's got to stop in this scenario, it should all be
>authenticated immediately and then updated (cleared) on both sides.
As I understand it, banks apply something they call a "value date" to
transactions they handle. The value date associated with a particular
transaction may or may not be that same as the actual date that the
item appears on the ledger. The value date is the date used for things
like calculating interest applied, even if the transaction appears to
have taken place on some other date. For transfers of funds between
accounts, as long as the "value dates" for both the debit and credit
entries are the same, it doesn't really matter what date appears on
the statement of account.
Chris
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| Re: The speeding up of clearing [message #380056 ] |
Do, 13 April 2006 16:52 |
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<usenet [at] isbd.co.uk> wrote in message news:443e0bd1.0 [at] entanet...
> john boyle <john [at] johnboyle1.demon.co.uk> wrote:
>>
>> Banks would love to get rid of paper, especially cheques, but despite a
>> marked reduction in the use of cheques and paper based bank giro credits
>> millions of people still want to use them. I find it particularly
>> amusing when people say things like 'well they've got computers, why
>> cant it be quicker? But I always use cheques myself, and never use
>> direct debits,' It just sums up this country.
>>
> There is one very good reason that I still tend to pay my credit card
> monthly payments by cheque and that is that it provides me with a
> record that I have done it.
>
Can you explain how using a cheque provides a record, in a way that paying
via on line banking doesnt?
--
Tumbleweed
email replies not necessary but to contact use;
tumbleweednews at hotmail dot com
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| Re: The speeding up of clearing [message #380059 ] |
Do, 13 April 2006 19:27 |
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Tumbleweed <thisaccountneverread [at] yahoo.com> wrote:
>
> <usenet [at] isbd.co.uk> wrote in message news:443e0bd1.0 [at] entanet...
> > john boyle <john [at] johnboyle1.demon.co.uk> wrote:
> >>
> >> Banks would love to get rid of paper, especially cheques, but despite a
> >> marked reduction in the use of cheques and paper based bank giro credits
> >> millions of people still want to use them. I find it particularly
> >> amusing when people say things like 'well they've got computers, why
> >> cant it be quicker? But I always use cheques myself, and never use
> >> direct debits,' It just sums up this country.
> >>
> > There is one very good reason that I still tend to pay my credit card
> > monthly payments by cheque and that is that it provides me with a
> > record that I have done it.
> >
>
> Can you explain how using a cheque provides a record, in a way that paying
> via on line banking doesnt?
Yes, there's whatever I have written on the counterfoil. I realise
this doesn't provide any proof whatsoever that the item has been paid
but it does provide *me* with a record.
None of the online services I use provide anything as useful as the few
words I can write down on the counterfoil.
--
Chris Green
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| Re: The speeding up of clearing [message #380062 ] |
Do, 13 April 2006 18:22 |
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<usenet [at] isbd.co.uk> wrote in message news:443e6dd4.0 [at] entanet...
> Tumbleweed <thisaccountneverread [at] yahoo.com> wrote:
>>
>> <usenet [at] isbd.co.uk> wrote in message news:443e0bd1.0 [at] entanet...
>> > john boyle <john [at] johnboyle1.demon.co.uk> wrote:
>> >>
>> >> Banks would love to get rid of paper, especially cheques, but despite
>> >> a
>> >> marked reduction in the use of cheques and paper based bank giro
>> >> credits
>> >> millions of people still want to use them. I find it particularly
>> >> amusing when people say things like 'well they've got computers, why
>> >> cant it be quicker? But I always use cheques myself, and never use
>> >> direct debits,' It just sums up this country.
>> >>
>> > There is one very good reason that I still tend to pay my credit card
>> > monthly payments by cheque and that is that it provides me with a
>> > record that I have done it.
>> >
>>
>> Can you explain how using a cheque provides a record, in a way that
>> paying
>> via on line banking doesnt?
>
> Yes, there's whatever I have written on the counterfoil. I realise
> this doesn't provide any proof whatsoever that the item has been paid
> but it does provide *me* with a record.
>
> None of the online services I use provide anything as useful as the few
> words I can write down on the counterfoil.
>
That is nothing to do with using cheques, all you are doing is writing down
who you intended to pay and when, plus it doesnt show the date the cheque
was sent or when it arrived. You could of course do the same if you were
paying online simply by writing it in a notebook! In addition you'd know
your bank had received the payment.
FWIW, for a cheque transaction my on line bank account or the printed
statement only says the date, the amount and the cheque number, giving me no
clue what it was for unless I have written it down. OTOH, for an online
payment, it says the date, the amount, the name of the institution, and a
reference number (usually my account no with them).
--
Tumbleweed
email replies not necessary but to contact use;
tumbleweednews at hotmail dot com
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| Re: The speeding up of clearing [message #380068 ] |
Do, 13 April 2006 20:53 |
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>I always laugh when I see remarks that seem to assume that banks are
>somehow making huge wodges of dosh from the 'interest' that is earned by
>all the money in the clearings. When somebody pays a cheque into their
>account at a 3rd party branch, until the cheque clears there is no money
>upon which interest can be earned.
But how often does someone pay a cheque into their account at a third
party branch? Most people pay into their own branch. The point was
that given today's IT systems and with the 6 digit sort code and 8
digit account number it should be possible to clear the cheque and
debit it to the payers account immediately. The three day clearing
thing is purely historic.
Similarly what about when someone pays something by bank giro credit or
direct credit, whatever. The money leaves the payers account
immediately but, if the payee it at another bank it takes 3 days before
the money is credited there. Don't pretend that money disappears for 3
days. It is somewhere and earning interest! For who? The bank!
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| Re: The speeding up of clearing [message #380071 ] |
Do, 13 April 2006 22:44 |
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In message <1144954431.830874.221460 [at] j33g2000cwa.googlegroups.com>,
SandalsMan <jbenator [at] gmail.com> writes
>>I always laugh when I see remarks that seem to assume that banks are
>>somehow making huge wodges of dosh from the 'interest' that is earned by
>>all the money in the clearings. When somebody pays a cheque into their
>>account at a 3rd party branch, until the cheque clears there is no money
>>upon which interest can be earned.
>
>But how often does someone pay a cheque into their account at a third
>party branch?
Whenever they pay a bill that way.
> Most people pay into their own branch.
Not so. The vast majority of cheque credits are paid in at third party
branches.
> The point was
>that given today's IT systems and with the 6 digit sort code and 8
>digit account number it should be possible to clear the cheque and
>debit it to the payers account immediately.
There is just tad bit more to it than your simplistic example.
> The three day clearing
>thing is purely historic.
Agreed.
--
John Boyle
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| Re: The speeding up of clearing [message #380073 ] |
Do, 13 April 2006 23:21 |
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>There is just tad bit more to it than your simplistic example.
I am sure there is more to it, that's why I made it simple. But it
should be possible, thats what I was saying.
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| Re: The speeding up of clearing [message #380074 ] |
Do, 13 April 2006 23:27 |
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>>But how often does someone pay a cheque into their account at a third
>>party branch?
>Whenever they pay a bill that way.
John please re-read carefully what I said. The clue is in the words
"their account". I am not disputing that there is no loss where a bill
is paid by cheque at another bank. I was talking about people paying a
third party cheque into THEIR own account at another bank so that it
takes 3 days to get the funds. That must not happen frequently and
with most banks (certainly Lloyds and Co-op) if you pay in at another
branch of your own bank you get an instant credit.
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| Re: The speeding up of clearing [message #380075 ] |
Fr, 14 April 2006 00:40 |
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"SandalsMan" <jbenator [at] gmail.com> wrote in message
news:1144863906.000491.54850 [at] j33g2000cwa.googlegroups.com...
> Very true Adrian. The 'interested parties' make too much money by
> holding onto balances within clearing to give it up that easily.
Maybe the real problem is that most politicians who have any real power are
too old and simply don't understand modern technology. They have to rely on
focus groups and advice from so called business leaders to guide them.
Adrian Smith
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| Re: The speeding up of clearing [message #380079 ] |
Fr, 14 April 2006 12:53 |
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john boyle wrote:
> In message <m5SdnS8Vgo0cuqDZRVny3w [at] bt.com>, nospam [at] invalid.invalid writes
>
>> A few months ago I remembered hearing in the news that there was plans
>> afoot
>> to speed up the time it takes for transfers and money to clear between
>> different banks and building societies. Given that in other countries who
>> use the same IT mechanisms as we do (ie computerised payments) and clear
>> money on the same day, I think we can all appreciate that this is long
>> over
>> due.
>>
>> Anyone know what the timescale is from goverment for this financial
>> "revolution"?
>
>
> This link
>
> http://www.oft.gov.uk/News/Press+releases/2005/94-05.htm
>
> gives your answer I think.
>
>
> //snipped//
>
>
There is some further information in an APACS press release on 16
December 2005 that appears to indicate that internet and telephone
banking transactions will be completed on a same day basis, 7 days per
week, this to be implemented by the end of 2007. The press release also
states that standing order transfers will be completed on a same day
basis, but the arrangement for standing orders will only apply on
banking business days. See details at
http://www.apacs.org.uk/media_centre/press/05_12_16.html
There was also an article in The Times on 17 December 2005 which
indicated that "While all the major high street banks, as well as
smaller banks such as Alliance & Leicester and the Co-operative, have
signed up to the deal, Nationwide is the only building society that has
so far pledged to do so."
--
Alan Law
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| Re: The speeding up of clearing [message #380080 ] |
Fr, 14 April 2006 12:53 |
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In message <1144963633.151097.34580 [at] z34g2000cwc.googlegroups.com>,
SandalsMan <jbenator [at] gmail.com> writes
>>>But how often does someone pay a cheque into their account at a third
>>>party branch?
>
>>Whenever they pay a bill that way.
>
>John please re-read carefully what I said. The clue is in the words
>"their account".
Fair comment!
>I am not disputing that there is no loss where a bill
>is paid by cheque at another bank. I was talking about people paying a
>third party cheque into THEIR own account at another bank so that it
>takes 3 days to get the funds. That must not happen frequently and
>with most banks (certainly Lloyds and Co-op) if you pay in at another
>branch of your own bank you get an instant credit.
Yes, Instant credit within the same bank has been around for a number of
years. Instant inter-bank payments will be some time off because the
number of inter bank transactions would rise by a factor of many
hundreds of thousands, possibly millions, per day. At the moment inter
bank settlement is performed via their accounts at the BoE as a small
number of transactions at the end of the day representing the sum of all
the days transactions. CHAPS payments are the best you can get at the
moment.
In the example you quote above (which I have read more carefully this
time!:-)) you refer to a cheque and a credit. The route the credit takes
is different to the cheque which still has to be 'paid' and clear in its
own way.
--
John Boyle
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| Re: The speeding up of clearing [message #380082 ] |
Fr, 14 April 2006 13:25 |
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In message <443f7f33$0$9254$ed2619ec [at] ptn-nntp-reader01.plus.net>, Alan
Law <nospam [at] invalid.com> writes
>There was also an article in The Times on 17 December 2005 which
>indicated that "While all the major high street banks, as well as
>smaller banks such as Alliance & Leicester and the Co-operative, have
>signed up to the deal, Nationwide is the only building society that has
>so far pledged to do so."
>
As far as I can remember, Nationwide is the only Building Society who
are members of APACS and used to be the only one who existed as its own
right in the clearing system without 'piggy backing' on another banks
membership.
--
John Boyle
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