Online banking question (processing times)

The Question: How long does it take for a bank to receive/process electronic payments?

I am paying my credit cards online, in this specific instance the bank pulled the cash immediately from my account, but the payment doesn’t show up on my credit card 'till several days later. I called the bank to ask what was up, and they say that it takes 4 business days to process the payment.
This does not sound right to me.
Anyone know what the deal is? How long should it take for a credit card payment take to process if paid online?

It depends on the bank and the card company. American Express, when pmts are made on their site, updates within 24 hours. Other companies, using their own sites take up to 2 business days. When I generate the payment from my bank, it has taken up to 10 days, depending on the payee.

BofA used to do this, but recently changed. Now they don’t debit your account until the payment has been made.

Online and electrornic trasactions can be quite tricky and there is more to it than it seems.

The bank is likely not immediately pulling the funds from your account but more likely ‘marking’ those funds as unavailable until the actual charge from the merchant posts to your account days or even weeks later.

This can keep you from experiencing overdraws or from unsavory-type people from committing fraud.

Example: I have $100 in my account, I make an online/electronic payment for $95 to a third party and immediately go to the ATM machine and withdraw the $100. I have made $195 in transactions and only have $100 in my account (in this case hopefully ‘duping’ the bank).

If the $95 dollar payment doesn’t post immediately, the merchant won’t get paid when the payment is posted to your account 4 days later (or however long it takes the merchant to post the payment, believe it or not in some cases it’s longer than a month).

If I made the $95 online payment and FORGOT I only had $100, went to the ATM and requested an account balance shortly after making the online payment and it shows I have $100, I’m like, “cool”, withdraw the $100 bucks so I can hit up McDonald’s for 50 big macs and darned if I don’t have fees out the wazoo cause I’m overdrawn.

Like others said, it depends on the bank and the other companies involved. It depends on their own business practices. Even though banks seem like they should be high tech (and some are), their business practices are often built around processes in place when most customers rode horses to make a deposit.

There is no reason money can’t be moved around in milliseconds and new processes designed from the ground up often behave that way. Too commonly however, an electronic transfer is just a fancy front end to get some really old wheels moving and it takes a long while.

I used to bank with Bank Of America years ago, and I could use my debit card anywhere, then return home 5 minutes later and check my account online. It would show the amount debited and the store where I made my purchase. This was labeled as a pending transaction, of course, but I don’t understand why the debit cannot be processed immediately, if all the information of my transaction is already there.

Automated Clearing House

Much like checks in the past went through the Federal Reserve System before your bank would pay the check (oh, the days of floating checks…)

And warning in general to everyone, some banks use 3rd party bill paying services. If you typo a number say $1000.0 instead of $100.00 the third party billpay company will try to debit your account for $1000 and generating NSF fees.

Netbank does this.

I made a payment by check to my bank to make a payment against the balance due on my Credit Card. The payment was instantly posted against my checking account. This was on a Friday.

It takes another day to get the payment to the Credit Card Center across the state and credit it to my CC account. In this case Monday was a holiday, Tuesday to get the payment and Credit Card payment cleared and posted to CC Wednesday AM!

In my case allow two working days. Had I made payment on Thursday it would have cleared on Friday! :smack: