Where does money go?

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LennonNZ

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Topic # 115729 4-Apr-2013 17:37

I don't know if there are any bank geeks on here who may know the answer..

I got some money paid to me over easter (from overseas).. it took 7 days to get to me from when the payment was processed on the other end.

Where does the money go between someone saying please pay this person and me actually seeing it in my bank account. These days why does it take so long to get to me. Its not like a actual human does anything.

It only takes 3 days at most to courier a parcel from the US!

Do the banks keep my money, transfer it to a holding account to get interest on it during the time it disappears in the ether?

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Reply # 793363 4-Apr-2013 17:39

Most banks these days (at least BNZ and ANZ) seem to have multiple money transfer schedules a day. Most of the times a payment I send to ANZ shows up in less than three hours on the other side.

This of course is counting business days. Over Easter with a four days banking holiday things get out of hand. Still if I deposit money into someone's account on Thursday evening it should be on the other account Friday morning (even though a holiday, but the payment is processed).

Your bank may have different ways of doing things though..

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ajobbins

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Reply # 793366 4-Apr-2013 17:42

I think the OP is talking about an TT, probably via SWIFT.

The short answer is that the bank is likely holding money until they think the exchange rate favours them. SWIFT transfers can be done in a matter of hours, all parties willing.

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LennonNZ

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Reply # 793372 4-Apr-2013 17:52

Yes it was a payment from overseas.. not a local between bank transfer.

I guess my question is where exactly goes the money go?? Can I ask the banks for money for the loss of interest when it wasn't in either bank account??

ajobbins

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Reply # 793373 4-Apr-2013 17:53

LennonNZ: Yes it was a payment from overseas.. not a local between bank transfer.

I guess my question is where exactly goes the money go?? Can I ask the banks for money for the loss of interest when it wasn't in either bank account??

Nope, it will likely say in their terms it can take up to 10 days, or something like that.

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khull

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Reply # 793377 4-Apr-2013 18:00

Must be one of the most best kept banking secrets that they do not want anyone to know :)

Linuxluver

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Reply # 793380 4-Apr-2013 18:11

freitasm: Most banks these days (at least BNZ and ANZ) seem to have multiple money transfer schedules a day. Most of the times a payment I send to ANZ shows up in less than three hours on the other side.

This of course is counting business days. Over Easter with a four days banking holiday things get out of hand. Still if I deposit money into someone's account on Thursday evening it should be on the other account Friday morning (even though a holiday, but the payment is processed).

Your bank may have different ways of doing things though..

Funnily enough....Kiwibank remembered to charge me mortgage interest on Good Friday night...but didn't take my automatic payment until the following Tuesday.

Ordinarily, they happen on the same day.

So I paid them 3 days additional interest on the amount of the fortnightly payment for.....what reason exactly?

I expected better from Kiwibank.

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Linuxluver

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Reply # 793382 4-Apr-2013 18:16

LennonNZ: Yes it was a payment from overseas.. not a local between bank transfer.

I guess my question is where exactly goes the money go?? Can I ask the banks for money for the loss of interest when it wasn't in either bank account??

They will almost certainly be performing the currency exchange through a 3rd-party bank - or two - who hold onto the money. Though things happen more directly among "developed" countries.

I have found the BEST way to send money to people regularly is to mail them an ATM card and give them the PIN number over the phone. Then I put the money into an account used ONLY for that purpose.

I can put money in there via internet banking and send them a txt..and they can withdraw it 5 seconds later from any ATM.

Yes, there is a daily limit.
Yes, it costs me NZ$6 per transaction plus something like 1.4% "commission".

But for sending amounts like $500....there is no cheaper, faster way to do it. This is how make my regular contributions to the care of my elderly parents overseas.

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Handsomedan

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Reply # 793427 4-Apr-2013 19:46

Where does it go?
It will likely have gone from bank A to their correspondent bank then to bank c (your bank).

Generally speaking a TT is a 3 day payment method, based on working days, provided cutoff times are met at the sending end.

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Reply # 793428 4-Apr-2013 19:46

i don't know exactly where it goes but i'm betting it goes to your bank after X hours.

in a secret black hole where they invest the money in some secret deals to make money, not much individually but if you add up everyone's money in their secret black hole it adds up.

then it prints out a piece of paper and sends it to someone's desk. they sit on it for 2 days then do some procedural checks to make sure no certain natioality's prince is hooking on to the money, once the procedure is done (probably takes a few minutes) they put the money into your account.

just guessing but where else does it go?

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1080p

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Reply # 793443 4-Apr-2013 19:51

LennonNZ: I don't know if there are any bank geeks on here who may know the answer..

I got some money paid to me over easter (from overseas).. it took 7 days to get to me from when the payment was processed on the other end.

Where does the money go between someone saying please pay this person and me actually seeing it in my bank account. These days why does it take so long to get to me. Its not like a actual human does anything.

It only takes 3 days at most to courier a parcel from the US!

Do the banks keep my money, transfer it to a holding account to get interest on it during the time it disappears in the ether?

What dates over that holiday? Given that Friday and Monday were holidays that could be up to four days of bank holiday.

LennonNZ

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Reply # 793467 4-Apr-2013 20:29

Holidays? Do they turn the computers off between Friday and Monday? My EFTPOS and CC's still worked and I could look online and see the transactions I did shortly after. I did an overseas CC payment on Saturday and it went thru so the remote CC processing place knew if I had enough money in the bank account so there must be a real time system in that aspect.

Yes I guess batch processing has to be done and during the holidays the batch processing is not done and the money just makes interest for the bank for the time its not available on both ends.

"Bank Holidays" are really not bank holidays these days. They are just public holidays..
http://en.wikipedia.org/wiki/Bank_holiday

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Reply # 793499 4-Apr-2013 21:10

Linuxluver:
LennonNZ: Yes it was a payment from overseas.. not a local between bank transfer.

I guess my question is where exactly goes the money go?? Can I ask the banks for money for the loss of interest when it wasn't in either bank account??

They will almost certainly be performing the currency exchange through a 3rd-party bank - or two - who hold onto the money. Though things happen more directly among "developed" countries.

I have found the BEST way to send money to people regularly is to mail them an ATM card and give them the PIN number over the phone. Then I put the money into an account used ONLY for that purpose.

I can put money in there via internet banking and send them a txt..and they can withdraw it 5 seconds later from any ATM.

Yes, there is a daily limit.
Yes, it costs me NZ$6 per transaction plus something like 1.4% "commission".

But for sending amounts like $500....there is no cheaper, faster way to do it. This is how make my regular contributions to the care of my elderly parents overseas.

Probably better would be something like Westpac's linked prepaid cards. http://www.westpac.co.nz/bank-accounts/debitplus-and-prepaid-visa/prepaid-cards/ - look into "Express Cards". No per-transaction fee, just the currency conversion.

jpoc

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Reply # 793643 5-Apr-2013 06:01

You would have thought that it was all electronic with the sending bank in communication with the receiving bank directly through the SWIFT network. (The SWIFT network actually works very well and can transfer money in minutes if all banks involved are on that network.)

In the real world, it is different.

Not every bank is on SWIFT. Some banks have a partnership with a correspondent bank which is on the SWIFT network. There are even banks that do not have that sort of an arrangement. They have to go through an intermediary bank which does have an arrangement with another bank which is on the SWIFT network.

Some banks even have manual processes for these operations. When I was living in Europe, I suffered from one delayed payment. The cashier at my local branch was full of apologies. They hardly ever received incoming SWIFT transfers so the person who had the job of looking at the printer to see if there were any transfer notices from their correspondent bank on the SWIFT network did not check the printer every day. Their solution was that if I was expecting a payment, I should tell them and they would phone their partner bank to tell the person there to check the printer to see if there was an incoming SWIFT transfer via that partner bank's SWIFT correspondent.

At each stage in the process, the money will be sitting in an account that is dedicated to the purpose of holding money that is at that stage and waiting for the next step.

When I started shifting money between countries, the Berlin wall was still in place - but we did have SWIFT. I even managed to get money in to Russian during the height of the Yeltsin era banking crises. I've seen things you people wouldn't believe.*

I even worked for SWIFT for a short while though none of the above was picked up on that job.

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Reply # 793644 5-Apr-2013 06:13

I transferred money using an atm in Japan from my Japanese bank account to my BNZ bank account on Monday afternoon this week. Checking internet banking on Tuesday night (Jpn time) the money was showing in my BNZ account.
I usually do a transfer every month or two and it has never taken longer than 48 hours to show at the other end. If done before 3PM my time it usually shows at the other end within 24 hours.

You need to change how you move your money around.

BigMal

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Reply # 793684 5-Apr-2013 08:44

Another major problem is people sending money fill out the payment forms incorrectly. A transposed number, invalid BIC code or a mismatched address could cause the payment to not STP and require manual intervention.

It's not like a local payment where a beneficiary account can be validated on the spot, they have to wait for the message (IMT) to arrive in NZ and if it fails validation requiring manual intervention then that could be the source of your delay.

If manual intervention is required and everyone is on their easter holiday (4 business days) then that accounts for a large portion of your delay.

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