In message <5e30jcF35ljh1U3@mid.individual.net>, hummingbird
writes
>>I think its more simple. The number of cheques being issued is dwindling
>>each year, and when measured as percentage of all transactions they are
>>dwindling even quicker. Banks hate cheques and would be glad if they
>>were banned. There is no incentive form the public to improve things and
>>if the clearing was changed then it might encourage the greater use of
>>cheques. The Deregulation (Bills of Exchange) Order 1996 enabled the
>>banks to reduce the costs of clearing. Without that order then I think
>>people would be paying for cheques by now.
>
>OK that goes some way to explaining why the cheque clearing/paying
>system doesn't warrant a huge new IT investment.
Thanks for that.
>
>
>>>The apparent blackhole where peoples' money disappears into while
>>>cheques are being cleared (or is it paid?) is another.
>>
>>Now you are confusing the cheque clearing with the credit clearing. It
>>is the latter into which peoples money disappears. With the cheque
>>clearing nobody gains anything, not even the banks, whilst the cheque is
>>in the clearing system.
>
>So what happens with credit clearing?
>I can confirm that when I pay a bill through my online bank account,
>it takes 5 days to arrive at the other end, although it's debited from
>my account immediately.
>Likewise if I xfer money from one bank account to another, it takes
>3 days to arrive.
>All of the above are done electronically.
Yes, and because there is this gap there *is* money in the system for
which the customers dont get the benefit. On the other hand, the BACS
system comes free to personal clients, so this goes some way to pay for
it.
>
>So it seems that although the system of cheques might have needed 3
>days or so to process them, the banks are applying the same delay to
>electronic payments.
Yes (in so far as 3 = 3) but they arent employing the same gap to BACS
*because* that is the gap for the cheque clearing. It is because
interbank settlement (when based on a daily reconciliation via a
clearing house) can not be shorter than 3 days.
My earlier reference to the public's perception of 'computers can do
anything' comes in here.
The magnitude of the credit clearing and the mechanism of its operation
is far more complicated than most people can conceive. I am not saying
that it is not possible to simplify it, but the number and type of
participants is huge and changes need a considerable lead time to
implement so as to ensure all users are within scope.
>Perhaps that's the real bag of worms.
No, it will take time. Banks would love same day settlement! But will
the customer pay?
>>As mentioned, the 1996 order helped things immensely, cheques are no
>>loner physically presented at the drawee, they are done so
>>electronically, I know of no other country whose Bills of Exchange laws
>>allow this, do you?
>
>Can't say. See above ...if cheque numbers are dwindling it probably
>wouldn't justify IT investment to speed it up.
Yes, I reckon there is a 'disincentive' to the use of cheques now.
>
>>>>>At least that's the common view across society.
>>>>
>>>>Yes. Usually based on the 'computers can do anything and banks make too
>>>>much mney' school of thought.
>>>
>>>Published annual accounts are testimony to the big profits.
>>
>>I agree. They are huge concerns. I dont understand the point you are
>>making here.
>
>Simply confirming one of your reasons for why so many people are
>cynical of banks. They see poor service,
Agreed.
> hefty transaction fees,
Hmm,, most people have free banking
>unfair charges,
Yes some charges are penal,
>delays in getting cheques cleared etc etc
No, that is unfair (but we are going back to the cleared/paid
arguement!) :-)
>... and
>huge profits.
No. They are huge businesses with huge capital employed and with a
worldwide market. Their profits might seem huge in an absolute sense,
but in relation to their size their profits are not out of kilter. Most
of the big banks' profits come from outside UK anyway.
> Is it any wonder people are cynical?
Only due to disinformation.
>
>>Sorry, didnt realise it was you! I have re-read the post which is
>>unclear (pardon the pun). Did you present a cheque into your account and
>>then draw against it? or just cash one of your own cheques? or did you
>>cash a cheque drawn by somebody else at the counter?
>
>OK - I cashed a cheque but I didn't have an account. I recall taking
>my passport in with me for ID. It takes a while ...the desktop machine
>chomps away printing long strings of numbers on the reverse. I assume
>all that is the bank online system clearing the cheque in 'real time'.
>I walked out with cash.
Sorry to ask more questions but I need to be exactly sure of the facts
before I give my reply. Would you mind answering some more questions?
1) Who was the drawee of the cheque? (i.e. what was the bank on the
cheque, where was it?)
2) Did you have any form of pre-authorisation ? (i.e. am opened credit,
or a cheque guarantee card etc.,)
3) what bank where you in?
>
>I've also paid cash into another person's bank account and it gets
>credited virtually immediately ie: he can draw it out the same day
>at his own bank.
That happens in UK intra bank (in many circs) but not inter bank.
--
John Boyle |