New guide on payments takes mystery out of process

New guide on payments takes mystery out of process

Have you ever thought a money transfer should have gone through and then find out it hasn’t but can’t understand why?

The Banking Ombudsman Scheme has just published a Quick Guide to Payment processing which explains how the payments process works and why some payments take longer to process than others. It receives payments complaints and enquiries every year.

The new guide coincides with payments processing improvements being introduced which will speed up payments even more, but which will potentially catch people unawares.

“We investigate payment processing mistakes such as incorrectly delaying or failing to make a payment, or duplicating payments, or providing incorrect information about the processing of payments. But we can’t investigate complaints about the payment system rules because these are managed by Payments New Zealand,” says Banking Ombudsman Nicola Sladden.

One of the biggest gripes people have is about money transfers on a non-business day. People think these should be processed straight away. We receive the most complaints about this over Christmas and Easter when people are caught out with so many public holidays in a row.

“The fact is payments aren’t processed over weekends or public holidays, which means they won’t be processed to the next business day. Also, if a transaction is made late in the day, the cut-off times for online banking, ATM or EFTPOS differ so it might not go through.

“People should check with their bank about these cut-off times,” Ms Sladden said.

Another issue often raised is about money transfers from one person’s bank account to an account at another bank. Some people think the processing time is another way for banks to earn interest holding onto it rather than processing to the receiving account straight away.

“Payments are batched for processing and while your account balance may show the money has been debited, the sending customer will generally continue to earn interest on it until the money is processed and arrives in the recipient’s account,” Ms Sladden said.

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