It absolutely does.
It all comes down to collateral, which is what @thomas was alluding to earlier.
The following is not financial or banking advice, it is highly simplified to help you understand the kinds of things that banks do behind the scenes to move money quickly
The big open secret is that when you transfer money, it isn’t physically moving. Your transfers are just messages saying “Move £10 from Account A at Bank A to Account B at Bank B". When it gets to the end of the day, all the banks and schemes get together to total up all of the amounts and move that money between banks in one big transaction that takes place at the Bank of England (at a slightly different level).
This is interesting because if Bank A’s customers move £10 to Bank B and Bank B’s customers move £10 to Bank A, at the end of the day when you add it all up, there is £0 to be actually moved between the banks because they net out perfectly.
Now, what happens if Bank A sends £10 to Bank B but at the end of the day, Bank A can’t pay that? That would be big trouble, and nobody wants that. To defend against it, you store an amount of cash called collateral, usually in an account controlled by the scheme. If you cannot pay your bill at the end of the day, they will use that amount to settle the bill for you and probably disable your connection until you put more money in the collateral account.
In reality, you don’t store just one day’s worth of expected net movements because weekends and bank holidays exist where clearing and settlement does not occur, you’d store at minimum five days (Bank Holiday Friday, Saturday, Sunday, Bank Holiday Monday, then Tuesday as a sequence can and did recently happen), but more likely a week or so.
This is where you have Net Sender Caps and other such amounts. You start by keeping track of the net amount of money that bank has moved in or out of the scheme that day (or any period of time between settlements). That amount is the running total of what the settlement bill will be, and if it becomes higher than your collateral amount, you are in very high risk territory and you never want to be here as a bank. You can solve the situation by either adding more money to your collateral account to increase the bar, or if it’s a one off, immediately pay your settlement bill early and start fresh.
(The Net Sender Cap isn’t actually equal to the amount of collateral you hold, but your collateral must be equal to or higher than your cap.)
Why go to all of this trouble? Well, by not having to physically move cash for every individual payment, you can speed up the time it takes to send or receive money! Without this, it would take days to send even £1.
Banks do this for pretty much every payment scheme they operate in, Faster Payments, Bacs (if they’re sending money), Mastercard, Visa, and so on.
So the bank has to hold the maximum net amount it can send in cash with the scheme, where does that leave your billions of pounds?
Well, if you wanted to move billions of pounds into a bank, that would be fine and you wouldn’t cause many serious problems. It would very much alarm us because of the next part though.
If you wanted to move billions money out, that is a huge problem because attempting to do that would immediately blow the bank’s Net Sender Cap and throw them into panic needing to move cash resolve that.
You have a few options to move billions of pounds, do it slowly enough that the banks involved can settle out, send it using a scheme where actual cash is moved and not promises for cash, or work with your bank who can work with a payment scheme and the other bank to coordinate the movement.
This gets back to the tiers of banks comment, some banks are more willing/used to doing the latter two options than others. Some banks just keep higher collateral in particular schemes than others because that’s how their customers use the bank.
Quite frankly, if you have that much money, you aren’t moving that yourself. You are likely with a bank where you can phone up your own personal banker, who will arrange for that kind of transfer to take place for you.
I’ve written this fairly quickly and off the top of my head. I do not work directly on any of this (we have other wonderful teams internally whose entire job is to manage the balance of collateral), so there are likely some mistakes but I hope that gives you a general insight into how banking works several layers deep!
I won’t reveal Monzo’s collateral amounts because they change often and I believe are secret, but it is the Prudential Regulation Authority’s job to make sure we are always able to pay our scheme bills and keep your money safe from a banking perspective as we grow and move more money so Monzo can continue to make money work for everyone. 