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Written by Natweststaffmember, posted at his request. This is a draft so if you have any questions please feel free to ask.
Working Days
This is what makes the Bank work and will explain a lot of things as I go through them. The basics is that it is Monday to Friday excluding Saturday and Sunday. The Banks usually state that the funds needs to be in the account the working day prior to the item going out, ie Friday for Monday, Monday for Tuesday, etc,etc,.
Direct Debits
This is an agreement between yourself and a company to pay a bill directly from your account usually at an agreed time. You have the right to cancel the Direct Debit. Some banks will allow you to reinstate the Direct Debit if it is done
within a short period of time. Any mistakes or errors by the bank or the company themselves is covered by the Direct
Debit Guarantee Scheme.(part 2).*
Standing Orders
This is a fixed amount payable to a company or individual in which you yourself determine the amount. It can be set up
for a minimum 2 payments and there is no maximum. The Standing Order can be amended at any time but banks may
have minimum timescale prior to the payment being sent for it to be amended or cancelled.
Direct Debit Guarantee Scheme
The Direct Debit Guarantee Scheme overs all banks and Building societies. It states that : (1) If there is a change to the
amount to be paid or the payment date, the person receiving the amount(the originator) must notify the customer in
advance. (2) if the originator or the bank/building society makes an error, the customer is guaranteed a full and
immediate refund of the amount paid. (3) Customers can cancel the Direct Debit at any time by writing to the bank or
building society.
Debit Card transactions
This is where you pay a provider either online/over the phone or at a shop for goods. The transaction once it has been
authorised via CHIP and PIN machine, is valid for up to 6 months, however, usually it is debited from the account
within 2 to 3 working days and the funds set aside by the bank for the transaction. With regards to refunds onto cards, the retailer has up to 21 days to put the transaction through even if there is a gap of only minutes between the debit and refund.
There is cases of what is called 'ghost' transactions. That means that the company has appeared to debit the account and yet the money reappears in your account. This means that the transaction has not been done properly and usually will mean it being debited a few days later.
There is cases of transactions being authorised but the individual being told it has been declined. There is a third party in this transaction which is the merchant. Transactions authorised usually will drop off the system within 3 to 5 working days as that is the time scale they have to process the authorisation code even though it is valid for 6 months.
There are cases in which if the goods are damaged, do not arrive or you do not get the service you paid for, you will able to ask the bank for a chargeback. This applies to Visa Debit cards specifically. Here is a link to the bbc article
BBC NEWS | Programmes | Working Lunch | Visa debit card refunds
The clearance of Cheques.
When you receive a cheque it needs to be paid into an account so that the cheque clears and the money is effectively transferred from the sender to you. This is called the Clearing Cycle. The basic clearing cycle is only 3 days, however
banks and building societies work under the rules called 2-4-6 or for some savings accounts 2-6-6. I will try and explain this and what is happening on the ground.
DAY ONE: Cheque paid into the account and processed by large centralised Voucher Processing Centres) This is known as Transaction Day.
DAY THREE: The cheque is debiting the drawer's account and may show up as cleared in the bank. The cheque is cleared for interest purpose. This is known as Transaction Day plus 2.
DAY FIVE: You can withdraw the money. This is known as Transaction Day plus 4.
DAY SEVEN: At the close of business on this day the cheque cannot be returned. This is known as Transaction Day plus 6.
So the reality: Day One=Monday, Day Three=Wednesday, Day Five= Friday and Day Seven=close of business Tuesday the following week.
Source: http://www.apacs.org.uk/payment_opti...s2007FINAL.pdf
Faster Payments Service
Since the 27th May 2008 a new service has been provided called Faster Payments which are transfers bank to bank which take approximately 2 hours. The founding members are: Abbey, Alliance and Leicester, Barclays, Citi,
Co-Operative Bank, Clydesdale and Yourkshire Banks, HboS, HSBC, LloydsTSB, Nationwide Building Society, Northern Bank, Northern Rock, NatWest, Royal Bank Of Scotland and Ulster Bank.
The current situation is that payments via telephone banking and online banking will go within 2 hours as a faster payment. It is anticipated that, at the time of writing this, that Standing Orders and Credit Card payments will be fully
operational by the end of 2008, if not earlier.
Working Days
This is what makes the Bank work and will explain a lot of things as I go through them. The basics is that it is Monday to Friday excluding Saturday and Sunday. The Banks usually state that the funds needs to be in the account the working day prior to the item going out, ie Friday for Monday, Monday for Tuesday, etc,etc,.
Direct Debits
This is an agreement between yourself and a company to pay a bill directly from your account usually at an agreed time. You have the right to cancel the Direct Debit. Some banks will allow you to reinstate the Direct Debit if it is done
within a short period of time. Any mistakes or errors by the bank or the company themselves is covered by the Direct
Debit Guarantee Scheme.(part 2).*
Standing Orders
This is a fixed amount payable to a company or individual in which you yourself determine the amount. It can be set up
for a minimum 2 payments and there is no maximum. The Standing Order can be amended at any time but banks may
have minimum timescale prior to the payment being sent for it to be amended or cancelled.
Direct Debit Guarantee Scheme
The Direct Debit Guarantee Scheme overs all banks and Building societies. It states that : (1) If there is a change to the
amount to be paid or the payment date, the person receiving the amount(the originator) must notify the customer in
advance. (2) if the originator or the bank/building society makes an error, the customer is guaranteed a full and
immediate refund of the amount paid. (3) Customers can cancel the Direct Debit at any time by writing to the bank or
building society.
Debit Card transactions
This is where you pay a provider either online/over the phone or at a shop for goods. The transaction once it has been
authorised via CHIP and PIN machine, is valid for up to 6 months, however, usually it is debited from the account
within 2 to 3 working days and the funds set aside by the bank for the transaction. With regards to refunds onto cards, the retailer has up to 21 days to put the transaction through even if there is a gap of only minutes between the debit and refund.
There is cases of what is called 'ghost' transactions. That means that the company has appeared to debit the account and yet the money reappears in your account. This means that the transaction has not been done properly and usually will mean it being debited a few days later.
There is cases of transactions being authorised but the individual being told it has been declined. There is a third party in this transaction which is the merchant. Transactions authorised usually will drop off the system within 3 to 5 working days as that is the time scale they have to process the authorisation code even though it is valid for 6 months.
There are cases in which if the goods are damaged, do not arrive or you do not get the service you paid for, you will able to ask the bank for a chargeback. This applies to Visa Debit cards specifically. Here is a link to the bbc article
BBC NEWS | Programmes | Working Lunch | Visa debit card refunds
The clearance of Cheques.
When you receive a cheque it needs to be paid into an account so that the cheque clears and the money is effectively transferred from the sender to you. This is called the Clearing Cycle. The basic clearing cycle is only 3 days, however
banks and building societies work under the rules called 2-4-6 or for some savings accounts 2-6-6. I will try and explain this and what is happening on the ground.
DAY ONE: Cheque paid into the account and processed by large centralised Voucher Processing Centres) This is known as Transaction Day.
DAY THREE: The cheque is debiting the drawer's account and may show up as cleared in the bank. The cheque is cleared for interest purpose. This is known as Transaction Day plus 2.
DAY FIVE: You can withdraw the money. This is known as Transaction Day plus 4.
DAY SEVEN: At the close of business on this day the cheque cannot be returned. This is known as Transaction Day plus 6.
So the reality: Day One=Monday, Day Three=Wednesday, Day Five= Friday and Day Seven=close of business Tuesday the following week.
Source: http://www.apacs.org.uk/payment_opti...s2007FINAL.pdf
Faster Payments Service
Since the 27th May 2008 a new service has been provided called Faster Payments which are transfers bank to bank which take approximately 2 hours. The founding members are: Abbey, Alliance and Leicester, Barclays, Citi,
Co-Operative Bank, Clydesdale and Yourkshire Banks, HboS, HSBC, LloydsTSB, Nationwide Building Society, Northern Bank, Northern Rock, NatWest, Royal Bank Of Scotland and Ulster Bank.
The current situation is that payments via telephone banking and online banking will go within 2 hours as a faster payment. It is anticipated that, at the time of writing this, that Standing Orders and Credit Card payments will be fully
operational by the end of 2008, if not earlier.
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