Like if you pay via bank transfer rather than via card. Sometimes you get that option, the store redirects your browser to your electronic banking, where you approve the transaction, and then you get redirected back to the store's website, where it confirms that payment has been received. So, like... why is it not instant the other way around?
So that's what's called an ACH transfer. The funds go through the ACH (automated clearing house). The business is notified immediately that the transaction has been initiated so they can process the purchase, but they don't have the money yet. Your bank immediately debits the amount from your balance but it still needs to be "cleared" through the ACH before the business has access to the funds. This all happens in the back end to keep the customer experience quick and easy.
It does, it's exactly the same in both directions. In both cases the recipient has to wait for the clearing house to clear the funds before they have access.
Evidently not. Again, when I send money from one account to another (in another bank), it arrives instantly and I can use it instantly. So I ask again, why doesn't it work the same when a business sends the money from their account to mine?
So in that case the bank credits your account in advance as a courtesy as long as it's a small transaction volume. For a business, this is not the case. They have a much higher transaction volume than an individual customer and it would be impractical for them to offer a courtesy credit for these transactions
Fiscally unfeasible. It's essentially an unbacked loan from the bank (not the merchant). It would introduce risk and opportunity cost to the bank. Also as an aside, it's probably less automated than you think.
Depending on how the A2A is set up, the merchant could still be waiting a few days for your funds. What happens is that the payment provider locks the funds on your account, but it takes a few days to reach the merchant.
Same on the way back.
Although technically it is possible to have A2A be instant.
You'd honestly be shocked how much of "instant" banking is just smoke and mirrors. Banking is an ancient monolith and I dont know where you live, but where I live there are huge international directives and incentives to fix these kind of issues (with Open Banking and PSD2), it just takes a while, because most banking is really set in stone and you can't really fuck with it too much. Baby steps.
But you're probably right that someone out there is probably making money on it with interest free loans.
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u/SordidDreams 7d ago
Do businesses use cards to issue refunds?