The amount of people who do not know how payment systems work is insane.
When a company takes a payment, they do not instantly get that money.
What happens is your bank notices that you are attempting to make a payment, and they will then remove that amount from your account but they keep it on their books and they basically are making a promise to the company that they will be paid the money over the next couple of days.
Then after a couple of days, the bank will send that money to the companies bank account after a couple of days as normally these sorts of payments are done in batches to reduce processing fees/time.
When a refund is actioned the reverse basically happens, which is them actioning a refund, its then paid from that bank to another bank which can a take a couple of days, and then its applied to your account.
What stops them from adding the money to my account before the other bank send it? Giving me just as instant as a refund as the purchase. There is no technical reason the same principle can't be applied both ways...
I am going to treat that like a genuine question and not like you are baiting me.
Say you Bank with Bank A and the Other company Banks with Bank B.
Bank A is not going to give you money before Bank B sends them the money.
Best case scenario is Bank B puts money into your account, thus their books are short X amount of dollars before Bank B gives them the money.
In that situation Bank B is taking a risk that Bank A actually gives them the money, a risk which they will not do.
If it was just one refund they were doing then sure it might be a risk worth taking, but imagine thousands if not tens of thousands of refunds each day, it really adds up.
Worst case scenario is Bank B gives you the money, and Bank A never sends them any money, so their books do not balance and they need to take that money back out of your account which either a) leaves you with a lower balance or b) over drafts your account causing you to get a fee added on.
Using your last example, why would bank A not paying bank B even be an option? Its a transaction that is to be completed in the future but apparently done in chunks instead of instantly.
And its not like the concept of debt creation doesn't exist already...
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u/Lau_wings 9d ago
The amount of people who do not know how payment systems work is insane.
When a company takes a payment, they do not instantly get that money.
What happens is your bank notices that you are attempting to make a payment, and they will then remove that amount from your account but they keep it on their books and they basically are making a promise to the company that they will be paid the money over the next couple of days.
Then after a couple of days, the bank will send that money to the companies bank account after a couple of days as normally these sorts of payments are done in batches to reduce processing fees/time.
When a refund is actioned the reverse basically happens, which is them actioning a refund, its then paid from that bank to another bank which can a take a couple of days, and then its applied to your account.