Seriously why does it take “3 to 5” business days to take the money from my account when it’s all handled electronically?
In: 294
There are a few reasons, but mostly speculation:
1. There is a time period in which funds are “available” but not transferred. The system, built a long, long time ago, did “batch” transactions, typically in the evening hours. Everything would be collected and then run through at one time. This ancient system still has its tentacles in today’s world.
2. Banks realized that they can earn a very small amount of interest on the float–the time between your money “leaving” your account, and the money leaving the bank. The amount is so small per transaction, you’d never notice across your lifetime. However, multiply this amount by the millions of daily transactions, and the bank can make a few bucks extra this way.
3. Merchants make crazy money from late fees, penalties, and interest. So, the money leaves your account, but you don’t get credit for a few days and…maybe 1 in 10 times it’s a late fee, or a few day’s extra interest, or a penalty rate. Multiply that times millions of customers, and it’s some real money.
4. There’s some time to investigate fraud and error, in case you were hacked or made a mistake. It’s a million times easier to claw back a transaction if it’s in limbo vs already completed (if you’re a bank, if you’re a mortal, you get to call an 800 customer care line that will politely invite you to self copulate.)
Latest Answers