I just initiated a transfer of funds from PayPal to my checking account. PayPal says this will take 3 to 4 days which seems like an insanely long period of time to twiddle some bits on a couple of systems. The money should be transfered right when I hit the transfer funds button at PayPal. I can envision exactly how this could be done technologically too, and an apt technology springs to mind especially if the current debate gets settled. So could someone explain to me why the banking system is sooo sloooooow?
The Slow World of Banking
it CAN be fast: i had money
Submitted by Forgotten soul (not verified) on Thu, 2005/08/04 - 17:06.
it CAN be fast: i had money transferred from one german bank to the other within the day. there was no paper involved. perhaps paypal, being a US company, first prints cheques ;-)
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Not anymore
Submitted by sneakin on Sun, 2005/08/07 - 07:52.
With the passage of Check21 they should not even be printing checks. Check21 makes a digital scan of a check just as valid as the real thing, so there would be no need to print a check. I think the overnight market thing is the most likely case. It seems more rational to make a quick gamble on the money before releasing it, or PayPal has to wait on their bank.
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'cause of it bearing interest
Submitted by Lukas (not verified) on Wed, 2005/08/03 - 21:05.
Believe it or not - as long as they keep your money, they can play with it. Invest it, use it for big business, bear interest out of it. It's as simple as that that financial services companies won't survive if the can't hold the money back for a few days.
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Because banks are greedy
Submitted by Sam Morris (not verified) on Wed, 2005/08/03 - 14:19.
Paypal's bank, and your bank, both make millions by investing the money from "in-flight" transfers on the overnight markets.
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Because they make money in those three days
Submitted by Gio (not verified) on Wed, 2005/08/03 - 12:40.
While your money is in the limbo of banking, the bank use that money, together with all the money of the people that are doing transaction in the same days, to invest in some funds to gain more money.
In italian it is called "Valuta".
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Some banks (if they're small
Some banks (if they're small enough) still process their money transfers by hand.
The bank that my company used several years ago for ACH/EFT (echecks really) was apparently this way. They had a web interface where you could build an ACH batch and submit it. Turns out that they took that, printed it, and rekeyed it into another system. We don't use that bank any more...