Pulaski

I am fairly certain that the Canadian banks use the same sort of system as banks in the US and the UK - that all transactions are deemed to have taken place at an arbitrary cut-off in thr middle of the night, set by the central bank. Trying to process and account for all account transactions "real time" in the order they occured, would create a hell of a mess!

scrubbedexpat091

No idea how the backside works.

Bob

It is at two institutions over here that I know of though.

The lack of a charge is more down to the bank saying you'll have the funds by 3pm during the deposit day or whatever it is, but the reality being they process them at midnight and stack all the out going first before the in going.

It's all semantics at the end of the day though.

scrubbedexpat091

This is how the bank lists the processing order in the disclosure they provide.

Electronic debits
Electronic credits

Non-electronic credits
Non-electronic debits such as cheques lowest to highest.

GeoffM

Logically it should be far easier to do it by actual time order. However, I suspect that a lot of it uses batch processing so the time is harder to determine - which is more likely the real reason.

In a rather "doh" moment I just discovered that I'd put money aside for the mortgage so needn't have waited until today after all!

But at the same time Wells Fargo said I'd gone overdrawn yesterday - yet, looking at the online statement the only way that could be true is if they processed in a certain order that didn't match the statement. The listed chronological order:
- Online transfer (same branch) (ecredit)
- Debit card purchase (edebit)
- Paper cheque cashed (ie debited)
If we went overdrawn then the only way for that to happen is if they did the cheque debit first.

RICH

I know a bit about the back end workings from my job. I get to monitor accounts via the bank mainframe. I only deal with commercial accounts, and wire transactions, but I imagine it's the same for other accounts and transactions.

The transactions are processed in order received by the "wire room"(although after they are received, some take longer to process than others)-Internal transfers -other accounts at same bank- are usually done last. The mainframe shows them crediting or debiting real time. A Daylight Overdraft (DOD) could occur if not sufficient funds (NSF). DOD can be overcome by cancelling the transaction or sticking it at the back of the queue till a credit gets processed, or allowed, by a senior bank person.

At the end of the day/overnight the transactions are automatically sorted, all the credits first and debits last "statement format".

I work with people at other banks, and if I send a wire to them, it is almost always seen by them within 10 minutes.

Sorry, off topic , hopefully of interest.

scrubbedexpat091

Interesting indeed.

While almost all the deductions we have out automatically come out overnight (generally 3-4am local time) our car payment always comes out middle of the day on the 1st, only one that does this, don't know why though.


I wish credit cards were quicker, would make my job easier. We pre-auth for room/tax + 100 at check in, people don't understand that it takes time once checked out for that 100 to actually go back to the card as available.

Not sure how it all works, just know I get calls 1 day after check out, why are you still holding money on my card all the time.

Bob

Credit cards are usually up to 3-4 days, debit cards up to 10 days...they do it because it's a free cash loan to them while they have the money.

scrubbedexpat091

Our debit system is instant on refunds, surprised when I first moved here and had a refund done and the money was there instantly, wasn't used to that.

But with credit takes 3-7 days typically depending on bank.

GeoffM

By them, do you mean the hotel? You and Jsmith would seem to disagree on that point if that's the case!

Pulaski

I'm pretty sure he means the banks/ credit card company are sitting on the reimbursement, and certainly that is what I would assume, that the banks sit on the money.

GeoffM

But there is no money to reimburse. Firstly, a credit card is a loan to the customer - well, unless it's secured I suppose. Secondly, I don't think holds actually involve transfers of funds either, virtually or otherwise - it's blocking that money from being spent.

Pulaski

I was thinking that from the outset, at least in the case of the credit cards, but then even in the case of credit cards I believe that the merchant collects his 97%+/- from the bank/cc issuer almost immediately even though the credit card holder only pays 4.5-7 weeks later.

And in the case of holds, yes, you are correct - the merchant is "reserving" some room on the creditcard to ensure that he can collect his charges later when the guest leaves the hotel, the rental car is returned, etc.

scrubbedexpat091

I can't say for sure how it work, but pre-auths don't show on the batch settlement report I do at end of day, the transaction doesn't show until the pre-auth is completed into a payment.

The pre-auth if not released by us manually, automatically releases after 10 days, so with extended guests who stay longer, we have to renew the pre-auth every 10 days.


Our debit system here is completely different, its run by interac and we can't pre-auth those, so we have to take the payment upfront, and then take a 100 payment, and then at check out, do an actual refund of the 100 payment, total pain and one reason why a lot of hotels don't accept debit here.

Even when the bank issues a Visa debit card, it cannot be used in Canada as a Visa, the Visa part only works outside of Canada and foreign websites and a select number of Canadian websites who accept Visa debit.

GeoffM

So do you let the pre-auth die away naturally, or do you release on check-out (or at least, let's say, within 24 hours)?