Why Is My Bank’s Bill Pay So Slow?
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I was in the middle of my new juggling act, balancing my baby girl with working from home when my cell went off. I saw that it was a 800 number and since I was busy, I just let it go to voice mail while I finished up with an assignment.
Phone Call I Didn't Want to Get
It turns out it was a call from my credit card company. It seems like my account was past due and they wanted to me to be aware. I hate when companies say that, why don't they just come out and say that they want to see if I was going to make a payment?
Past due, though? Wait, that can't be right…
Before calling them back to see what the problem was, I decided to log on to my bank's site to find out what my account said. Sure enough, my balance reflected that the bill payment had been sent out.
In fact it showed that the payment went out 6 days ago. Aren't we in the information age? Should payments be processed in 2-3 days now?
Bank Takes 3-4 Days to Send Payments Out
I knew that my brick and mortar bank was slower than our online bank at Capital One 360 (formally ING Direct). I didn't realize how slow. It took about 4 days from when I first created the payment to when the bank sent the payment out.
I really don't see why it's that long.
Credit Card Takes Even Longer to Process
Still, the payment was made about a week before. The credit card company should have received it and processed it. I went ahead and called them to find out what happened. I didn't want to be charged for a late payment.
The customer service representative said that it would be fine (no fee), she'd make of note of when the payment was made. In fact, she told me that it takes up to 5 days to process payments.
I find that ridiculous. Up to 5 days for credit card processing?!
I can see about not processing payments on the weekend, but that's almost a week. Now that I know that, I'll start my payments much earlier to get it in on time.
Why is One Bank Slower Than the Other?
What I don't understand is the big difference between banks. They're offering the same service. Paying a bill isn't much different between them, right?To double check I went into both banks sites to see how long it takes to send the payments.
I logged on to both sites yesterday (September 21) before 9am.
- If I wanted to pay through Wells Fargo, the payment would be made September 26.
- If I went with Capital One 360, it would be made September 23.
That's a big difference.
Between that delay and the credit card company's crazy process, there is a big opening for late payments. I don't want to get a call from them again so I'm making some changes.
From now on, I'll be making all my bill payments through Capital One 360. It's quicker and I haven't had any problems with past due payments.
I'm also inching towards switching my individual account to a local credit union.
First I need to check that they'll accept me as a member and then I'll see if they offer business accounts. If so, I'll make the jump.
I've stayed with my bank because it was convenient and less hassle. Now, though, I'm not really getting any benefits from it.
Thoughts on Bill Pay
Have you've noticed this with your bank? Does anyone know why there's such a big difference between bank's bill payment systems?
If you're in North Carolina, can you recommend any local credit unions or banks for me to check out?
Are you looking at optimizing your checking account? You can open a checking account with Capital One 360, simply click here to get started!
That is just plain crazy. I use Chase and all of my credit cards are paid electronically the next day. Only individuals will be mailed a paper check (like my dentist). Even my utility companies are paid in one or at most 2 days.
I have often wondered about this. Why are banks and credit cards able to immediately process their charges to you and immediately know if you are late so they can add fees and immediately debit the money going OUT of your account, but it takes a week to “process” deposits or payments?
I can see why it took so long back in the day when you had to snail mail paper checks to unconnected banks, but with computers and the internet, there really is no excuse I can see for a week long delay in any transfer of information between two entities. I hope one of your readers works at a bank so they can explain why the extra time is needed whenever it favors the financial institution but there is no grace period for the customer. For those of us on the outside, it certainly looks pretty fishy!!
That’s the reason that, for my credit cards, I have the payment set up so that my credit card company pulls the money from my bank versus what you described, which is the bank sending (or pushing) the money to your credit card company. This way, what happens is that the credit card company acknowledges the payment and adjusts my balance on the day I schedule it, which is always at least 1-2 weeks before the due date. Typically, the withdrawl occurs on the bank account one business day later.
My concern with companies pulling money out of the bank is the chance of the incorrect amount being pulled. I’ve had family and friends burned by it.
I really have to trust a company before I’d sign up or have a bonus for it. An example would be my student loans receiving a small discount for auto debits.
The “up to 5 days” thing is mostly to make sure that the payment isn’t reversed due to NSF or something similar. That goes up to the Fed, they sort it all out, and if there are any reversals, the payments may not actually go through. I wondered about that for a while as well. It’s not that they don’t have the money, but more like they want to make sure they _really_ have the money. Think of the scams going around on Craigslist where you are asked to take some payment for more than what you’re asking to pay for and ship the item. You do so, put that money order/check in the bank, ship the item, then find out that the payment wasn’t any good. You’re now out the money and the item as well as possibly being overdrawn. Similar concept, especially since people do strange things to pay off bills sometimes.
As for sending _out_ the payment, I don’t quite get that. Only guess there is that the banks have some mainframe system that actually handles that. You queue up a payment, that night it hits the mainframe, next day it hits some print shop to print the check, day after it actually hits the mail. Total guess, but it wouldn’t necessarily surprise me. Totally different if there’s already a relationship between the bank and the company you’re paying. Then they can usually do some mass payment electronically with a list of how the payments should be applied.
My bank (Bank of America) guarantees delivery of the payment on the date I select. I have had no problems from it.
You might want to recheck the validity of that guarantee. I used BOA billpay on 9 Oct. to send a large payment to Wells Fargo. The BOA delivery date was scheduled for 12 Oct. Delivery to W-F has still not been made as of 17 Oct. (The two branches are physically located directly across the street from each other.) They both deny responsibility for the non-delivery, and BOA will not initiate an investigation until six days have elapsed beyond their promised delivery date.
I live in Durham and I really recommend the SECU. You should be eligible if you or your husband are state employees. The benefits are numerous, but I’ve been enjoying their superior customer service (they actually call you if a check that you deposit bounces, won’t let you transfer funds that you don’t have, etc.), essential lack of fees, and competitive interest rates (my checking account gets 0.25%, savings 1.00%, was 1.25% when I joined!)
Thanks for the suggestion Dave – it sounds like they have great services at SECU.
You can also get a SECU credit card with 7.75% APR
That’s ridiculous! With BofA they usually tell me when the payment will process. If it’s outside the bank, it’s usually between 2 and 3 days, so I just sign up with an online account via the creditor’s website.
Great timing on this post. Just 2 weeks ago i had kind of a similar situations. I use ING direct bill pay for probably 95% of my bills. And I had just such payment set up for one of the store credit cards. Everything was going well, I would set up a payment with minimum 4 days til the due date and it would clear in time as it was processed electronically. Than i get a message that the account will be taken over by a different management company. It would take them a month to transfer all the data, And they had no information available on how to make the payments in the meantime. Once that was done i did the usual scheduling of payment. Then i get a statement with late fees and financing fee on top of that. Turns out the new bank denied electronic transfer, so ING had to send a paper one, and it took 1.5 weeks to post to acct. Ridiculously long time!
I was able to get those fees removed but still fighting to get the electronic payment back….
I think what happens is in the time between your payment leaving your account and it being applied, your bank is making money off of your payment. So it’s something like this:
Monday: The money leaves your account.
Tuesday-Thursday: Bank of America makes money off of your payment
Friday: Bank of America sends the payment to your CC company
Saturday: CC company accepts payment
Or something similar.
When we used online bill pay through B of A at my last job, we had 2-3 checks go missing, and we probably sent out 6/month – too much fail for my taste.
My bank has two payment methods. The payees who get a direct transfer, which is my mortgage, and credit cards, these have to be set up a day in advance, but no more. The other method is where they cut a paper check, and need 5 days to be sure it arrives in time.
I set the paper ones to get there well in advance to avoid an issue, the instant ones I set to pay the day before the due date.
I’m getting paid through bill pay for doing contract work. The client’s bank took 10 days to get the check to me. Dated November 21. Memo: Week of November 4. Just received it today (November 23). Unreal. Switched to PayPal instead.
I used Paypal for some of my business transactions. It’s great to have different options when receiving payments.