2023-06-01

Companies bad at banking

I was discussing with a colleague the other day how so many companies are so bad with banking.

In some ways we have been lucky, but to be fair we have worked at it and made systems that work.

Your payment will not appear for 3 to 5 working days

I see this a lot when paying people - we live in a world of "fast payments", at least in the UK, and if I (personally) pay someone they will have the money within seconds. I mean technically the process can take longer, but in practice it does not.

I had some issue with a loan company for one of my kids, a settlement amount paid by fast payment and they still considered it several days later and extra interest. I was very much on their case from technical and legal points of view until they caved.

So what the hell are companies doing?

If someone pays A&A via normal UK fast payment, we have the money, and, in literally seconds, they get an emailed statement showing their account with the payment received. This is all thanks to Monzo web hooks. I am impressed with Monzo handling this well.

But even without that, there are ways to pull from Open Banking, allowing a payment to show on the banking day it arrives, but polled. Even if only polled once a day a company can see they are paid that day. Poll a couple of times and see money as it comes in during the day. It is not hard! It works for all banks.

Your refund will be in 5 to 10 working days

This is slightly harder, in some ways, as sending money generally needs more business controls.

We do BACS direct credits meaning we can send money on 2 working days if needed, and automate it all with direct submission to BACS.

In special circumstances we can do manual fast payments, but to be honest that is rarely needed from a business point of view. One day we may have that sorted too with the BACS system. But obviously such systems need careful business processes in place to avoid errors (either bugs or errors by staff).

Indeed, we automate refunds up to certain levels with two day BACS as a matter of course. But they have limits and above those I am involved (as director) confirming them.

But so many companies are so bad at this, sending cheques (wow) or "refunding DD payments". When Bulb sent me money it was dozens of payments that were each the amount of a previous DD.

Banking should be simple

I wish Open Banking had given companies and individuals control of their own bank accounts properly. They could do it all and all be like A&A. There are some companies offering this indirectly but why is Open Banking not something that is available to the account holder as standard - that would make sense.

4 comments:

  1. If there's one good thing about some of the online gambling industry it's that they use faster payments to pay out your winnings. Lots of companies need to learn from that.

    ReplyDelete
  2. It really bugs me that the entire payment system can take money from me in a matter of seconds, but to reverse a transaction will take a week or two. Yhere should be a law that says you must be able to refund money as quickly as you can take it.

    ReplyDelete
  3. I think the 5 day thing might come from using a credit/debit card, probably 3 days for the clearing cycle and rest for admin overhead

    ReplyDelete
  4. Re open banking, there are free options such as Nordigen, Plaid and Truelayer also let you use a developer account as an individual.

    But I agree it should be up to the banks, it shouldnt be a case of relying goodwill from fintech to get access

    It should be easy enough to issue personal access tokens for the account information stuff. I do get why they don't want to give out payment initiation access

    ReplyDelete

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