Standard Bank, Absa, and FNB on "slow and expensive" bank transfers

Jamie McKane

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Dups!

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Well, I am busy test driving Tyme Bank and so far I am loving the savings... far, far better than all the banks currently. The bank makes even Capitec look quite expensive.

On the subject of faster transfers, I am looking forward to seeing what Bank Zero comes up with.
 
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dunkyd

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Seldom seen so much spin in a single article.

Someone pays me by depositing at another bank and it takes 2 days to get there - who gets the 2 days interest ?
I work in Botswana, any deposit from Wednesday afternoon onwards only ever gets into my account Monday afternoon ????
 

krycor

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Standard Bank, Absa, and FNB on "slow and expensive" bank transfers

Responding to a tweet regarding the Faster Payments Service in the United Kingdom, former FNB CEO Michael Jordaan stated that South African interbank transfers should be free and instant.

He added that Bank Zero, of which he is chairman, would aim to compete with other banks to lower the fee for real-time transactions.
Weird.. the whole reason we don’t have faster payments is because of the involvement of the big 4. Same ole reason why we don’t allow fast direct debit P2P either.. gotto protect their revenue on card products.
 

racer

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Capitec charges R10 for an instant tranfer to another bank.. which shows up the R50 other banks charge for the rip-off it is...
 

Napalm2880

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The REAL reasons are:

1. The banks are making a large profit off the current realtime clearing system.
2. The regulator has been very weak in forcing the banks and Bankserv to change their ways.
3. The software and the entire process of interbank clearing is circa 1980 and so are the people that administer these systems. They will fight tooth and nail to keep these systems in place for job security.
4. All of the banks need to come to an agreement on how this WILL work but all of them are too busy finding reasons why it WON'T work.
5. Realtime clearing between banks is technically a lot harder to achieve than you would think. It has to be secure, highly available and be able to process BILLIONS of Rands worth of transactions every couple of minutes. The room for error is microscopic. Currently this system is a somewhat simple exchange of a long string in a text file over a secure queuing system but this process and the software controlling it has been tweaked for the last thirty years. You can't build that kind of reliability and scalability overnight without teething issues. ie. RISK.

What I predict will happen:

A new entity in the market will come in and perform inter-bank clearing at a low cost - perhaps using blockchain. It will slowly be adopted by the 'new' entrants and later by the big 4.
 

quovadis

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5. Realtime clearing between banks is technically a lot harder to achieve than you would think
Unless you pay the R40-R50 for instant payment, in which case it's not a problem?

A new entity in the market will come in and perform inter-bank clearing at a low cost - perhaps using blockchain.
Urgh. Can we get through the disillusionment trough first before we bring that tech up again. No need for new tech anyway - only persuasion is necessary.
 

Swa

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Sure bring fraud into this, when you allow payments to be reversed. :rolleyes:
 

Grant

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Seldom seen so much spin in a single article.

Someone pays me by depositing at another bank and it takes 2 days to get there - who gets the 2 days interest ?
indeed - heaps of horseschit
it's sad that i can ride on a mule across town to make a payment quicker than a bank can do an electronic transfer across town
 

Swa

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indeed - heaps of horseschit
it's sad that i can ride on a mule across town to make a payment quicker than a bank can do an electronic transfer across town
And here we start with the analogies again. Will the mule's name be Gunston?
 

deweyzeph

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There are some anomalies with transfers between certain banks. I've got a cheque account with FNB and a savings account with Capitec. When I do an EFT from FNB to Capitec (not using the instant clearing facility), the transfer almost always arrives in my Capitec account the same day, usually within a few hours. If I pay any other bank, it's the usual 2 business days.
 

krycor

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5. Realtime clearing between banks is technically a lot harder to achieve than you would think. It has to be secure, highly available and be able to process BILLIONS of Rands worth of transactions every couple of minutes. The room for error is microscopic. Currently this system is a somewhat simple exchange of a long string in a text file over a secure queuing system but this process and the software controlling it has been tweaked for the last thirty years. You can't build that kind of reliability and scalability overnight without teething issues. ie. RISK.

What I predict will happen:

A new entity in the market will come in and perform inter-bank clearing at a low cost - perhaps using blockchain. It will slowly be adopted by the 'new' entrants and later by the big 4.
Standard for these transactions has been around for a few years now.. ie ISO20022 https://en.wikipedia.org/wiki/ISO_20022

It does however mean a big upgrade to a lot of the payment switching systems or parts there of. But if you have the money the system via products can be put in.. there are also plenty use cases in the US (ironically this is one thing they are better at) and UK market.

Keep in mind that due the positioning of eg BankServ it also requires updates there.

So yah.. current system works, pays for itself.. so *twiddle thumbs*.

Ps. You can’t bring faster payments in with one player in the market. I reckon PASA will likely already have a date defined for when they bringing it in and also recovery of investment but my point remains.. you won’t see real-time merchant settlement anytime soon. It will kill card payments and profits associated to anyone in the value chain.. eg. See Netherlands, multiple African Countries with ZipIT etc
 

Napalm2880

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Unless you pay the R40-R50 for instant payment, in which case it's not a problem?
I think you underestimate the sheer volume of transactions that the bank processes every day. It's HUGE! The number of transactions processed in realtime is insignificant in comparison to batch - especially at month end. Historically the banks have used batch processing to spread the load over a period of time as this requires less resources. To move everything to realtime will require a complete redesign of the system from a process perspective, hardware and software and it will require all the banks and bankserv to implement.

Urgh. Can we get through the disillusionment trough first before we bring that tech up again. No need for new tech anyway - only persuasion is necessary.
I only mentioned blockchain because somebody has to mine it - and because there would be a 'regulated' profit in doing so, it's likely this will be the solution. So the choice of tech is guided by persuasion (greed).
 
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chrisc

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There are some anomalies with transfers between certain banks. I've got a cheque account with FNB and a savings account with Capitec. When I do an EFT from FNB to Capitec (not using the instant clearing facility), the transfer almost always arrives in my Capitec account the same day, usually within a few hours. If I pay any other bank, it's the usual 2 business days.
I found the same when customers pay me from ABSA. Before 10.00am and I get it the same day in a Capitec Acc. A payment from Standard Bank takes 2 days, and if after 2.00 on a Friday, will only appear on Tuesday
 

supersunbird

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When it comes to the R50 fee charged by Standard Bank for instant transfers, the bank said this charge exists due to the associated costs in the national payments system.
So is Capitec doing it at a loss at R10 fee?
 

Praemon

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Standard Bank to Standard Bank payments over R800 don't even clear the same day. Takes at least 1 working day, so they can't even get that right.

But yes, as mentioned, this is solely down to greed by the banks. They could have integrated a better system long time ago, but the current system is too profitable for them to take that step. Most business accounts are still charged upwards of R20 just for a normal EFT payment that takes 2 working days.

Hopefully players like Bank Zero shake things up with lower or no fees, which will take enough market share to force these other banks into doing something.
 
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