2007-09-19 22:39:07

Making money with bank-to-bank transactions

Being annoyed again with the long delays it takes to transfer money between accounts at different banks. This becomes even more stupid with the new ¬ętransaction preview feature¬Ľ. If the transaction manager is able to determine when a transaction is going to arrive, and to mark this event in a timeline, why couldn't it just book it at that point in time?

The banks claim several things. Some claim that the delay, which is usually about 3 days, is caused by the fact that the requests are processed manually. However, they are usually processed on the first day, and usually this does not take place manually. Another popular excuse is that transactions are collected until some point in time and then synchronized. But that also proves itself bogus fairly simply. Try to create two transactions on two consecutive days: they will arrive on two consecutive days, rather than together.

The real reason is much more simple and not technical at all. For every day that the customer is in possession of the money, the bank usually pays a certain amount of money. However, the possession of the money allows the bank to make profit from it. Thus, the bank artificially introduces a delay before the money is transferred, but after it was removed from the account. Thus, the money is still disposable for profitable purposes, but does not cause any payments to the customer. This can still save a couple of millions of dollars.

Thus, both the incoming and the outgoing bank delay the transfer by one day each. More than that would cause riots along the customers, but one day is already a profitable margin for the additional ressource use. From a purely technical point of view, including accumulation of transactions, the maximum transfer time would be one day at maximum.

Posted by Tonnerre Lombard | Permanent link | File under: general, network