Credit and debit same day - how are low balances handled?

There certainly are! I didn’t want to get into this technical detail but since you asked, we only process SIPs at the moment :blush:

This is correct yes :+1: Most FPS are received within the 2 hours, but the official SLA is “by the end of the next working day”

The way SIPs are handled requires the recieving bank to acknowledge synchronously (within a very strict timeframe) that the are either accepting or rejecting the payment. If the latter, you’ll see another feed item saying the payment was declined.
Lloyds is a great case in point for this: over this weekend your balance updates correctly with any FPS, but these don’t appear on your statement until Tuesday.
Ultimately, I don’t think there is any reason we shouldn’t be sending SIPs - the scheme is open as usual and if a recieving bank didn’t want to accept a payment for whatever reason, the option is there for them to decline it.

This is something we are now trying to do better when talking with customers :slight_smile:

BACS Credit takes 3 working days :+1: CHAPS would be same day I believe. (CHAPS was the precursor to FPS, but charges a fee)

3 Likes

You are right of course! I meant CHAPS, although personally I have only ever used it for property and land purchases.

1 Like

A huge fee if I remember, something like £20!

2 Likes

Traditionally, the advantage of CHAPS has been the guarantee and large transaction limit.
With FPS being all but instant nowadays (taking the SLAs into account of course :wink: ), and the scheme limit at £250k/transaction and rising to £20m I think FPS will stand to take over a lot of CHAPS traffic :slight_smile:

With the scheme limit for FPS now at £250K only a few banks actually offer that to their customers, many have much lower limits for transfers. What is the largest amount you can send by FPS from Monzo?

How come you don’t process them at weekends? Or do you and I’m forgetting?

Never said anyone was at fault, I was interested as to why Monzo might do it one way and Lloyds/other banks another way. It hasn’t caused me a finiancial problem, I was just interested and it had not been answered in this thread previously.

No harm, I should have been clearer it didn’t impact me. I suppose it could impact someone if they were expecting it to work differently though or expecting other banks to work the same as Monzo.

1 Like

They do process them, he was replying to someone who questioned why they do.

I can see an issue if you want to pay for something from Monzo and receive money from family or friends and one bank doesn’t process until after the bank holiday but the other processes that weekend, the inconsistency can cause problems.

1 Like

Imagine you have an outgoing standing order, that requires an incoming standing order for funding. If the incoming one is from any bank other than Monzo, there is potential for harm. Eg dated for Good Friday, and you go overdrawn because the incoming one isn’t processed, it costs you £2. If it fails and you only notice later, there is potential for further harm such as late payment charges, etc.

3 Likes

I agree - this is a very real problem here and we must make sure that we address it as best as possible. I see two options here:

  1. We revert to the status quo and only process SOs on working days. I don’t think this is the answer: as I’ve said before there is no technical reason not to do this and by challenging the status quo here, hopefully others will follow. This leads on to options 2:
  2. Continue processing SOs on non-working days, but make this very clear to customers. I totally agree we could do more around this - I like the idea of a feed item maybe the Friday before a bank holiday, letting customer’s know we’ll process their SO on Monday :+1: That means everyone affected will be aware, and we’ll hopefully minimise impact.

Thanks for all your thoughts on this, and for pointing out this issue! I will feed back internally and see what we can do here :blush:

6 Likes

The problem with this, is that it requires the customer to check their feed constantly. I certainly often go a few weeks without checking my bank accounts.

In my opinion (although I guess I’ll be in the minority here) the best thing to do is to stick to established banking practice, even if it is illogical…

I vote option 2 (maybe with a push notification to those affected). If you’re going to start a new type of bank it seems pointless to then do what all the other banks do simply because that’s what all the other banks do

6 Likes

An option is to attempt to send funds on a bank holiday or weekend and if failing to defer to next banking day

or another option…have a tick box or toggle when setting up standing orders, do you wish these transactions to be processed weekdays only or weekdays, weekends and bank holidays.

2 Likes

Think the tick or toggle would be a bit of a faff. For a start you’d be relying on people seeing it and then remembering what they’d set it at. Also how late could they change it? 1 minute before midnight on the day the money’s due to leave the account? Think that would cause problems. Also not a big fan of banks having to retry, you either have money in your account or you don’t

1 Like

Given the confluence of two threads, I thought I’d cross post this here for visibility:

3 Likes

Now January 2024 and problem appears to be still with us. When Monzo tell me (via the app) what credit(s) and debit(s) are going to happen “tomorrow”, the final balance outcome should be obvious and predictable. Why are credit(s) not applied first before any debit(s)? Random-order processing can easily lead to a debit transaction being declined ‘due to insufficient funds’ (at that moment in time) - a notification that says that the debit will ‘retry later in the day’ is cold comfort and leaves the account holder in a limbo state. The thread post that mooted the proposal to process credits and debits at separate times this is now nearly 6 years old - why hasn’t this been implemented yet?

I guess if credit is a faster payment, it could arrive at any time. BACS credits and debits should be easy to handle

1 Like

This is part of the reason that I have an overdraft. I might not pay anything for using it as clearing it same day but it allows a bit of flexibility in scenarios like this where credits and debits are happening the same day.