Perplexed about the bill payment process

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Two to four business days is a long time, but that’s what it takes to process a bill payment through a bank, online or otherwise.
If my credit card account is short at the cash register, however, that information comes up faster than the blood rushing to my face. Shouldn’t one transaction be as fast as the other? After all, it’s just ethernet cable and a push on an enter key.  

But the big question is, where does the money go while the transaction is running its course? Is the money still mine, is it the bank’s, is it the vendor’s (power, phone, etc.)? Maybe it’s on a poker table in a back room. Think about it: two to four days of our money sitting in laptop limbo for every bill payment that goes through a bank. That’s a big chunk of cash — billions!

And why is it two to four business days to process a payment? Is it two, three or is it four? I thought banks were all about exactness and accountability. Imagine banks saying, just make your mortgage payment within three to four business days of the due date, and if a weekend falls in between, no worries.

I called my bank and asked about “two to four business days,” and although the banking officer was courteous and helpful, she was unable to explain the nuances of the process. What she did say was that there was something like a “middleman,” or at least “software,” “a process,” “a platform.” News to me.

As it turns out, there is a middleman — a company — which operates the bill-paying software, process and platform the banks use. They never returned my call, leaving me to wonder what they do with our money over a long weekend — or for that matter, an hour. Why can’t the banks do the exchange themselves? A bank e-transfer (to the other side of the world) can be done in 20 minutes. But yet it takes two to four business days to pay a bill?

One credit card company informed me that all client payments are processed at midnight each day, Eastern Standard Time, 1:30 a.m. Newfoundland Time. I’m also told that the payments are backdated to the day that they were sent. Nice — but it still doesn’t answer the question. Where is the money while all of this is happening?

The newest edition of New Scientist magazine includes a story titled “Quick off the market.” The opening paragraph states, “Time is money. That aphorism has never been truer than it is today. Financial markets have become hunting grounds for algorithms that trade at inhuman speed: making and losing fortunes within millionths of a second.”

I don’t require millionths of a second to pay my bills; a few hours will do. My most recent bill payment took 85 hours and 11 minutes. I’m making every effort to slow my life down, but this is preposterous.  And if someone else has their sticky hands on my cash, please explain.

Herb Hopkins

St. John’s

Organizations: New Scientist magazine

Geographic location: Newfoundland

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