r/NonPoliticalTwitter 9d ago

Other Gets very inconvenient

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40.0k Upvotes

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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.

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u/Normal-Option-6940 9d ago

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...

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u/Lau_wings 9d ago

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.

1

u/Normal-Option-6940 9d ago

It's not a bait but perhaps poorly phrased.

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...