My credit union lets me pay people as well as businesses. However if I pay more than $500 to a person they delay payment by 4 business days. Is this kind of long delay common for such a low amount?
Where is the money for those 4 days? I assume the CU keeps it , it’s not in my account.
Are you sure they are delaying the payment for 4 days? My bank says something to the effect that the payment will take 4 days, presumably because with a private individual, they have to write a check and mail it to the person, instead of an electronic transfer.
yes they are delaying it. They don’t use checks .
Are you really sure they don’t use checks? What is the name of your credit union?
Mine has a similar feature and while it isn’t mentioned specifically, if you really dig down into the fine print it says:
“The Service reserves the right to select the method in which to remit funds on your behalf to your Biller. These payment methods may include, but may not be limited to, an electronic payment, an electronic to check payment, or a laser draft payment (funds remitted to the Biller are deducted from your Payment Account when the laser draft is presented to your financial institution for payment).”
A laser draft is essentially the same as a check. Now, in all the promotional stuff about online bill pay it emphasizes electronic payments and et cetera, and actually nowhere prominent ever mentions paper checks. Mine likewise says that for “certain payees” the guaranteed clearance time is 5 days, these are typically individuals and that is because if you dig into it they are sending these people laser draft printed checks.
The reason my credit union has the different dates is because part of their TOS is they will reimburse me any late fees from any payee I pay using their service if my payment request went into the service and was late, as long as I gave them enough time to process it. The “processing time” that they stand behind varies from 2-5 days, and all individuals I’ve ever paid their guarantee time is 5 days and not 2.
Maybe that isn’t how your credit union does it, but I’d be surprised if they don’t retain at least the option to do a laser draft if they need to do so.
It’s electronic because if I send less than $501 it shows up the next day.
They told me that it’s related to “risk”, that’s the reason for the delay. They use a 3rd party service called Zash pay which I assume is used by other credit unions or banks. It’s not a big credit union so they probably don’t have the money to implement this on their own.
They can’t (or won’t) explain why sending $501 is way riskier than $500, so much “riskier” that it needs a 4 day delay. I’m going to ask someone higher up at the CU to see if I get a better answer.
It gets worse. I am getting money from a friend via Zash pay and it is taking 5 days. And they use the same credit union as me.