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Faster Transfers Beta (US only)

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Re: Faster Transfers Beta (US only)

#21

Post by seanmccann »

tibbon wrote: post #3

This is awesome, and I'm glad to see them innovating around it. I've scratched my head for years now around clearing time of payments and digital payment systems. It isn't like you have to load gold coins on a ship, or manually have people verifying checks these days. There's realistically little reason for the entire system to be so slow- except for the fact that it is. For years payment processors have been more th…

It all comes down to risk. The longer they can sit on the money, the less risk. Stripe's entire business revolves around risk management, hence why it's 7 days, which is longer than others (their banking partners).

Re: Faster Transfers Beta (US only)

#22

Post by seanmccann »

ulfw wrote: post #19

I just don't get why banking in the US is still so far behind. I recently did a wire transfer from Turkey to Germany between two people's accounts at two different banks. It settled in a mere morning. Same day.

Wire transfers in the United States are immediate as well. This has nothing to do with wire transfers.

Re: Faster Transfers Beta (US only)

#23

Post by sentenza »

TomGullen wrote: post #17
tibbon wrote: post #13

Earlier quoted context omitted.

Yea, in the US its a vague 3-5 days.

I don't understand why it has to be anything longer than 5 seconds, is there any reasonable explanation for this?

It might not be reasonable, but there is an explanation. It's been a while since I heared the podcast but Planet Money explained something along the lines that all the American banks are invested in an old, inefficient system of processing these transfers and there is no incentive to change. Here's the episode: http://www.npr.org/blogs/money/2013/10/04/229224964/episode-...

In Europe, the EU recently established the rule that all money transfers within the entire EU must be concluded within one business day. Thus most Europeans are surprised when they hear that it takes so much longer in the US.

EDIT: Another commenter pointed out that the EU directive is actually still somewhere within the legislative process. My misconception arose from the fact that I can't remember the last bank transfer that took longer than one business day.

Re: Faster Transfers Beta (US only)

#24

Post by matthewarkin »

jhoon wrote: post #9
zx2c4 wrote: post #2

How does this work?

Stripe is trialling faster transfer schedules for US-based users, meaning you'll get your money in two business days instead of waiting one week. If you'd like to be part of the beta, you can visit https://manage.stripe.com/faster-us-transfers and if you're US-based, you'll automatically be registered to participate in the beta. We're incrementally adding users to the beta, so we'll let you know as soon as you've bee…

I got an email like 2 weeks ago saying I was auto-enrolled in the two day transfer. I guess I'm just special where I don't have to fill out beta signups?

Re: Faster Transfers Beta (US only)

#25

Post by ajtaylor »

seanmccann wrote: post #22
ulfw wrote: post #19

I just don't get why banking in the US is still so far behind. I recently did a wire transfer from Turkey to Germany between two people's accounts at two different banks. It settled in a mere morning. Same day.

Wire transfers in the United States are immediate as well. This has nothing to do with wire transfers.

The last time I did a wire transfer in the US (admittedly a couple years ago now) it was anything but instant. IIRC there was a lot of manual work that had to be done behind the scenes to complete the transaction. And you have to do into a branch to do it as well - no internet banking!

Re: Faster Transfers Beta (US only)

#27

Post by dangrossman »

zx2c4 wrote: post #18
jhoon wrote: post #9

Earlier quoted context omitted.

Stripe is trialling faster transfer schedules for US-based users, meaning you'll get your money in two business days instead of waiting one week. If you'd like to be part of the beta, you can visit https://manage.stripe.com/faster-us-transfers and if you're US-based, you'll automatically be registered to participate in the beta. We're incrementally adding users to the beta, so we'll let you know as soon as you've bee…

I should have written a more clear question. I read the page, and I understand that now you're doing two-day instead of seven-day transfers. What I'm wondering is, "how is this possible?" How is Stripe now moving the money faster than before? What change made this possible? Did the stewards of the ACH system make a change that allows this? Is Stripe advancing funds ahead of time based on some kind of credit? Was the…

This is how most businesses have been funded for the past 30+ years AFAIK. Merchant account transactions are batched and settled nightly, then ACH'd to the merchant the next day. You get the money 1-3 banking days after charging someone. Stripe was the exception to the norm, and now they're doing what everyone else does. Holding onto your money before transferring it to you is something other merchant account providers only do on a case-by-case basis for accounts they consider at high risk for fraud.

Re: Faster Transfers Beta (US only)

#28

Post by mitchellh »

ajtaylor wrote: post #25
seanmccann wrote: post #22

Earlier quoted context omitted.

Wire transfers in the United States are immediate as well. This has nothing to do with wire transfers.

The last time I did a wire transfer in the US (admittedly a couple years ago now) it was anything but instant. IIRC there was a lot of manual work that had to be done behind the scenes to complete the transaction. And you have to do into a branch to do it as well - no internet banking!

Its all about risk. My accounts are cleared to do small wire transfers instantly. But when I received a wire over $100,000 once, it took about 24 hours to verify before clearing. From what I've heard from bankers I've asked about this, they said that wire transfers are indeed instant, but the banks (on either end or both) may hold the transfer for any reason they want.

Re: Faster Transfers Beta (US only)

#29

Post by sim0n »

ajtaylor wrote: post #25
seanmccann wrote: post #22

Earlier quoted context omitted.

Wire transfers in the United States are immediate as well. This has nothing to do with wire transfers.

The last time I did a wire transfer in the US (admittedly a couple years ago now) it was anything but instant. IIRC there was a lot of manual work that had to be done behind the scenes to complete the transaction. And you have to do into a branch to do it as well - no internet banking!

I've sent many wires online before in the US. They were definitely not instant and took up to a few days to clear but could be sent online.

Re: Faster Transfers Beta (US only)

#30

Post by jlees »

seanmccann wrote: post #21
tibbon wrote: post #3

This is awesome, and I'm glad to see them innovating around it. I've scratched my head for years now around clearing time of payments and digital payment systems. It isn't like you have to load gold coins on a ship, or manually have people verifying checks these days. There's realistically little reason for the entire system to be so slow- except for the fact that it is. For years payment processors have been more th…

It all comes down to risk. The longer they can sit on the money, the less risk. Stripe's entire business revolves around risk management, hence why it's 7 days, which is longer than others (their banking partners).

Is this the only reason bank transfers take so much longer in the US than UK? Why are UK banks happy to take the risk? (I'm genuinely curious and don't know much about why the US is slower.)
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