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Why does it take two to three days to transfer money?

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  • 18-05-2020 4:17pm
    #1
    mr_fegelien
    Banned (with Prison Access) Posts: 1,483 ✭✭✭


    Someone has transferred money from Bank of Ireland to AIB and I know it usually takes at minimum two days. My question is, why so long?

    Same thing with PayPal? Do the banks make money for holding cash longer in an account?


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    #2
    coylemj
    Registered Users Posts: 25,345 ✭✭✭✭coylemj


    With interest rates as low as they are, I doubt if there's any money to be gained by delaying the process. If you make your bank's deadline for daily processing, you can often get a transfer to work overnight. It might be 3 p.m. for Bank of Ireland. It will definitely take two days if you leave it later, say after 5 p.m.


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    #3
    2Mad2BeMad
    Registered Users Posts: 2,790 ✭✭✭2Mad2BeMad


    coylemj wrote: »
    With interest rates as low as they are, I doubt if there's any money to be gained by delaying the process. If you make your bank's deadline for daily processing, you can often get a transfer to work overnight. It might be 3 p.m. for Bank of Ireland. It will definitely take two days if you leave it later, say after 5 p.m.

    Any money I transfer normally takes 1 day.
    Im with AIB, but generally when I transfer money to my girlfriends account (ptsb) it rarely ever takes more then 24 hours. Likewise for other banks such as KBC and Bank of Ireland only ever takes 1day. Although I normally send money before noon when I do want to transfer. Which means next morning its in the account or before noon.


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    #4
    Ohmeha
    Registered Users Posts: 1,912 ✭✭✭Ohmeha


    Once people are aware of their bank's sending cut-off times and that Saturday/Sunday/Public Holidays are not business days then pretty much all transfers between Irish banks to a valid account will take 1 day to arrive


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    #5
    Bikerman2019
    Closed Accounts Posts: 992 ✭✭✭Bikerman2019


    I am AIB and Revolut


    I top up my revolut in seconds from my AIB account via my phone. Then I can send to another irish account, Ulster or Credit Union and, if done in morning, it arrives same day, if done in afternoon, it arrives next day.


    I dont know what the issue is, but they are slow as hell.


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    #6
    [Deleted User]
    Posts: 14,344 ✭✭✭✭ [Deleted User]


    This annoys me too.

    With my local Credit Union, I have often had to wait a week for a transfer to occur. I often wonder is there an element of manual intervention in my credit union, or is there a legitimate reason for it.


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    #7
    bfa1509
    Registered Users Posts: 1,022 ✭✭✭bfa1509


    I had a question that is in the same vein as the OP. I like to use Transferwise (as they offer everything the other online banks offer except you don't have to buy a new smartphone every year to make sure the stupid app works - looking at you Revolut and N26)

    One of the nice things about Transferwise is that they will lock-in the exchange rate for 48 hours. So I like to declare that I will buy x sterling but then I will wait and see how the currency fares the next day before I decide to buy (with the way sterling has been jumping this has been very useful). I can also use the sterling while I wait to sell it again.

    But of course BOI takes about 3-4 days to transfer the money to the Transferwise account in which time I lose the favourable exchange rate.

    Whats the best option to get the money transferred within 48 hours? AIB? I can't use Revolut or N26 as my smartphone isn't new enough for them.


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    #8
    Bikerman2019
    Closed Accounts Posts: 992 ✭✭✭Bikerman2019


    bfa1509 wrote: »
    I had a question that is in the same vein as the OP. I like to use Transferwise (as they offer everything the other online banks offer except you don't have to buy a new smartphone every year to make sure the stupid app works - looking at you Revolut and N26)

    .
    I have a mimax 2, about 3 years old and I have not problem. What is the issue you are having?


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    #9
    Marcusm
    Registered Users Posts: 10,212 ✭✭✭✭Marcusm


    Bikerman2019 wrote: »
    I am AIB and Revolut


    I top up my revolut in seconds from my AIB account via my phone. Then I can send to another irish account, Ulster or Credit Union and, if done in morning, it arrives same day, if done in afternoon, it arrives next day.


    I dont know what the issue is, but they are slow as hell.

    But you don’t really. Revolut instructs the payment to be sent before it has received the money which it confirms via debit card “rails” meaning it knows it’s coming but not actually received. Revolut, not suffering from legacy systems will likely send each payment rather than relying on once or twice a day batch processing. Still surprised that it arrives so quickly. Maybe UB has SEPA instant in effect or it might be that Tevokut routes they money from its account at NatWest to UB (ie in-house).


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    #10
    dotsman
    Registered Users Posts: 3,635 ✭✭✭dotsman


    Why does it take 2-3 days? Simply because of SEPA.

    The underlying problem is that the vast majority of banks have extremely ancient software and processes (from the 70's/80's) at the heart of their systems. While you may be interacting with a super sexy modern app/website, in the background it is still probably interacting with this ancient software.

    Prior to SEPA, banks within their own countries where independently trying to agree on common standards to transfer money between them. SEPA was simply an attempt to do this at a Eurozone level. Unfortunately as was the case with the national attempts, the standards are very much based on the lowest common denominator (i.e. the banks with the worst IT systems/processes)

    In short, if you were designing the process/software from scratch today, transfers would happen in real-time. However, with banks having little appetite to modernise, and many of them having outsourced their IT, we are stuck with the payment equivalent of black & white, rabbit-ears tv!


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    #11
    JTMan
    Registered Users Posts: 5,537 ✭✭✭JTMan


    dotsman wrote: »
    Why does it take 2-3 days? Simply because of SEPA.

    It should not take 3 days because of SEPA. It should take 1-2 days because of SEPA.

    SEPA was a great enhancement, payments have got a lot quicker thanks to SEPA but there is room for improvement.

    Other factors for delays:
    - SEPA inbound batches and outbound batches are done at different frequencies and different times with different banks.
    - Some banks even if they taken an inbound SEPA batch during the day, do not update online transactions until the following day.

    Sepa Instant Payments allows for payments up to 15k to be done instantaneously but not many banks support the Sepa Instant Payments standard.

    I think one of the reasons Revolut has become so popular is instant payments and associated push notifications to other Revolut customers.


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    #12
    bfa1509
    Registered Users Posts: 1,022 ✭✭✭bfa1509


    Bikerman2019 wrote: »
    I have a mimax 2, about 3 years old and I have not problem. What is the issue you are having?

    Revolut says "Discontinued support!" and won't let me do anything. I couldn't even finish setting up an N26 account as the app simply wasn't available for download in the appstore for my phone or tablet. It requires android 6 or higher.

    The requirement for an up to date phone is a deal breaker for me. I don't want them to dictate when I get a new phone and hold my money ransom until I do. Transferwise on the other hand has been flawless for me so far.


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    #13
    Yggr of Asgard
    Registered Users Posts: 5,154 ✭✭✭Yggr of Asgard


    mr_fegelien wrote: »
    Someone has transferred money from Bank of Ireland to AIB and I know it usually takes at minimum two days. My question is, why so long?

    Same thing with PayPal? Do the banks make money for holding cash longer in an account?

    SEPA clearing rules require that payments made before the cutoff point on a working day, be credited to the recipients account within one working day.

    Bank of Ireland has a cutoff point of 15:30 for personal and 17:00 for business customers.

    So if the person sending you the money did it before these times, the money by law must be credited to your account the next business day. If the person did it after those cutoff times, than yes it could take 2 days.


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    #14
    Bikerman2019
    Closed Accounts Posts: 992 ✭✭✭Bikerman2019


    bfa1509 wrote: »
    Revolut says "Discontinued support!" and won't let me do anything. I couldn't even finish setting up an N26 account as the app simply wasn't available for download in the appstore for my phone or tablet. It requires android 6 or higher.

    The requirement for an up to date phone is a deal breaker for me. I don't want them to dictate when I get a new phone and hold my money ransom until I do. Transferwise on the other hand has been flawless for me so far.


    Im on miui global 11 and Android 7.1.1 nmf265


    Im a couple of years old. Your phone must be very old?


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    #15
    Tow
    Registered Users Posts: 6,538 ✭✭✭Tow


    Irish banks have not updated their batch oriented systems to take into account the 'real time' nature of SEPA.

    In addition there is 'SEPA Instant Credit Transfer,' which is not supported by Irish Banks. Transfers must take less than 10 seconds (or fail) and has a limit of 15,000 per transaction.

    https://www.youtube.com/watch?v=nemLZNPoWYI

    When is the money (including lost growth) Michael Noonan took in the Pension Levy going to be paid back?



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    #16
    10-10-20
    Registered Users Posts: 6,719 ✭✭✭10-10-20


    bfa1509 wrote: »
    Revolut says "Discontinued support!" and won't let me do anything. I couldn't even finish setting up an N26 account as the app simply wasn't available for download in the appstore for my phone or tablet. It requires android 6 or higher.

    The requirement for an up to date phone is a deal breaker for me. I don't want them to dictate when I get a new phone and hold my money ransom until I do. Transferwise on the other hand has been flawless for me so far.

    If this was the reason, then the cause was not Revolut:
    https://blog.revolut.com/discontinuing-support-for-android-kitkat/
    They cannot write banking software under an unsupported (think "potential to compromise") platform. If your phone wasn't capable of going to Lollipop, then that's unavoidable, tbf.


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    #17
    coylemj
    Registered Users Posts: 25,345 ✭✭✭✭coylemj


    Tow wrote: »
    Irish banks have not updated their batch oriented systems to take into account the 'real time' nature of SEPA.

    In addition there is 'SEPA Instant Credit Transfer,' which is not supported by Irish Banks. Transfers must take less than 10 seconds (or fail) and has a limit of 15,000 per transaction.

    In their schedules of current account charges, AIB and BoI list what looks like an instant transfer facility. Not saying you're incorrect, just throwing this into the mix....

    AIB:

    Paper Paylink Euro Urgent Instruction to be completed via the branch €25

    Bank of Ireland:

    Same Day Funds Transfer
    - Inter-branch €19.05
    - Inter-bank €25.35

    The €19.05 charge for inter-branch is (for me) an eye-opener. Time was when you could walk into a BoI branch, lodge cash over the counter to a BoI account (any branch) and if you asked nicely and it wasn't a Friday afternoon, the teller would put it through straight away. Handy if you were late with the rent!


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    #18
    Tow
    Registered Users Posts: 6,538 ✭✭✭Tow


    coylemj wrote: »
    In their schedules of current account charges, AIB and BoI list what looks like an instant transfer facility. Not saying you're incorrect, just throwing this into the mix....

    That is their legacy system for fast transfers, it has existed for decades.

    My understanding the SEPA Instant Credit Transfer system is basically a replacement system for debit card transfers in shops etc.

    When is the money (including lost growth) Michael Noonan took in the Pension Levy going to be paid back?



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    #19
    Ohmeha
    Registered Users Posts: 1,912 ✭✭✭Ohmeha


    Irish banks are also reluctant to invest in SEPA & SWIFT instant payments due to additional associated costs in upgrading their fraud detection system capabilities, probably the only positive of their legacy systems is that it provides a limited time window to block a fraudulent transfer


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    #20
    jorry
    Registered Users Posts: 61 ✭✭jorry


    Bikerman2019 wrote: »
    I am AIB and Revolut


    I top up my revolut in seconds from my AIB account via my phone. Then I can send to another irish account, Ulster or Credit Union and, if done in morning, it arrives same day, if done in afternoon, it arrives next day.


    I dont know what the issue is, but they are slow as hell.

    I have a question for you about top up speed via the AIB app to Revolut. Have you made similar fund top ups via AIB website to Revolut - how long does that take ?
    In my experience with BOI online to Revolut, top up's take till next business day, assuming top up is made before 2:30pm cut off. I have not tried the BOI app..


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    #21
    Jim2007
    Moderators, Business & Finance Moderators Posts: 10,016 Mod ✭✭✭✭Jim2007


    Tow wrote: »
    Irish banks have not updated their batch oriented systems to take into account the 'real time' nature of SEPA.

    In addition there is 'SEPA Instant Credit Transfer,' which is not supported by Irish Banks. Transfers must take less than 10 seconds (or fail) and has a limit of 15,000 per transaction.

    https://www.youtube.com/watch?v=nemLZNPoWYI

    Why would you invest in services you have to give away for free? They are in a commodity industry at this point and so the profits are not there to make it worth their while.

    Free banking comes a price.


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