Payment processing - some perspective

[Keyser]

I have read a lot of posts relating to payment processing, stating that casinos should definitely do this or that instantaneously and that they are obviously stalling. I thought I would share a story that happened to me regarding a very large US brick and mortar bank that might give some perspective on what can and can't be done.

I pay all of my bills, including my apartment rent, via online banking at a major US bank. If the bank can't set up an electronic tranfer system with the payee, they simply issue a bank check by mail to whoever the payee is. The money is immediately deducted from your checking account the day the check is issued, regardless of when the payee cashes the check.

One day, a couple of weeks after I sent out a rent check via the online billpay, my landlord called me up and told me that she lost my check, along with other rent checks, down a storm drain (Yes, she is that scatter-brained).

I call up the bank and ask them to stop the check and put the money back in my account. I was told this would be no problem and the funds should appear back in my account within a few days.

About a week later, I get a letter from the bank stating that they needed more info from me and that they tried calling me to no avail (which was a complete fabrication on their part). I call them back and re-explain the situation. The teller then states that the check was in fact cashed by the landlord! I ask when, and she gives me the date that the check was issued. I asked her when the other checks I issued that same day were cashed, and she gives me the exact same issuing date! I try to no avail to explain to her how the online checks work and that the issue date is not the date these checks were cashed. I dont remember how that conversation ended but it did.

I called back a few minutes later and got another teller. Same thing happens, she doesnt understand how the online banking system works. I ask to be transferred to a supervisor. After a few minutes of research, he DOES understand and states that for some reason, the original request was never processed but that he would make sure it was done this time. He also explains that the actual payment processing for their online banking is through a third party company and that they have no direct way of getting in contact with them or finding out if an issued check has in fact been cashed. He tells me that he will make sure this is done and that I will get refunded within 10 days.

2 weeks pass by and still no money. I call again and am told that the request has been put in but there is nothing else they can do about it except to request again.

I get annoyed at this and visit my local bank branch. A very sympathetic bank manager gets on the phone to straighten things out while I am waiting. TWO HOURS and multiple phone calls later, he still has no straight answer. He is telling the last few people that he calls "I am a bank branch manager and Ive spent 2 hours on this with no answer! Imagine what this customer had to go through!"

A few days later, the money shows up in my account and everything is back to normal, about 1 month after all of this started.

The point of all this is that a legitimate large US bank using a 3rd party to process payments gave me the same runaround and had the same lack of communication with their third party payer as many of the online casinos do. I'm not making excuses for delay of payment, all I am saying is that sometimes there really don't know what is gong on or have any instantaneous way of resolving your situation.

 

[lojo]

Great story, thanks.

For people who want to understand the basic ACH process there is a graphic and definitions here:

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For an insight into EFT (including ACH) in general here is a good outline:

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It isn't hard to imagine very few people in a financial institution fully understanding the procedures. (transactions duties are broken up into several tasks so that no one person controls the process)

Good luck to all

 

[footdr]

GREAT STORY BUT IRRELEVANT TO OUR SITUATION

Your bank was able to give you the date your transaction was processed and sent to your landlord. why were they unable to tell you if it was cashed?If it was a paper check that was sent, it clears like any other paper check. When it is sent EFT, funds are transfered to the account of the entity you are paying, it is different than a paper check.

banks have very little information regarding EFT/ACH transactions. They basically can only tell you when they are sent from you account or received. It is virtually impossible to stop payment on an EFT transaction because the account holder, you, is the one that originates it and the Bank is mearly following the account holders direction of who to pay and when. Unless it is fraud or bank error you have to recover funds from the entity you paid if you want your money back.

There is no reason that a casino should not be able to contact the processor they sent our money to to ask if the funds were transfered to our bank account and if so when. Once our bank recieves the ach, the funds still need to settle, meaning the originators bank must provide the actual funds. Until the transaction actually settles it does not matter if your bank posts the transaction to your account or not, it could still be reversed if the funds do not actually transfer. That is why you shouldn't spend the money until the bank can verify settlement. Your bank may allow you to draw against a check you desposit before it has settled because you have funds in you account to cover it if it bounces same thing with ACH payments to your account, but until the money actual "changes hands" there is always a chance that check or ACH can be returned for nonpayment. And then the bank will take the amount out of your account balance and charge applicable fees. Even though they "posted it" and the transaction was no longer shown pending on your online statement.

So, third party processors should easily be able to provide the date they transfered the funds, where they transfered them to and whether or not they settled the transaction once the ACH processed the transaction between financial institutions. Also there is no way once it is sent through the ACH(automated clearing house)that it takes 21 days to reach the your bank. It may take a little longer to reach the ACH if their bank transfers it to a u.s. bank account that then submits it to the ach for transfer to our bank account.. Which is probably what is happening. But still unless they hold it up along the way it won't take 21 days

If your bank sent a paper check instead of an eft, they should have been able to tell you if it was cashed. And you also can stop payment on those transactions just like any other paper check. I know this because I pay my lawn mower company in this manner. If the check is lost, you tell the bank and they void that check and issue a new one. This is how Bank of America handles it. It is one of the largest U.S. Banks. I have had to do that before. You do have to speak with the online banking customer support, not the regular banking customer support.

The only excuse for non-payment of our funds is the processor dragging their feet. Or totally screwing up the transaction.

While I understand their position, if the shoe were on the other foot, we would be santioned by the casino, click2pay, etc. and accused of interfering with payment (read terms and conditions of you ewallet accounts) They accept no excuses from us if our Banks screw up. I know first hand. They charge us NSF fees and block our accounts. Unfortunately they have us over a barrel.

 

[Keyser]

Your bank was able to give you the date your transaction was processed and sent to your landlord. why were they unable to tell you if it was cashed?If it was a paper check that was sent, it clears like any other paper check. When it is sent EFT, funds are transfered to the account of the entity you are paying, it is different than a paper check. .

As stated in my story, the bank sent it via paper check, since my landlord is not sophisticated enough to have an electronic account. (The truth is that she is not sophisticated enough to walk and chew gum at the same time, hence her losing a bunch of rent checks down a storm drain ) It works like a cashiers check in that the funds are deducted from my account as soon as the check is issued (or as soon as I order it, I honestly dont know how long the bank takes to actually cut and mail the check). When the recipient cashes the check, the bank gives them the money, but the money is deducted from my account immediately, no matter how long the recipient takes to cash the check.

banks have very little information regarding EFT/ACH transactions. They basically can only tell you when they are sent from you account or received. It is virtually impossible to stop payment on an EFT transaction because the account holder, you, is the one that originates it and the Bank is mearly following the account holders direction of who to pay and when. Unless it is fraud or bank error you have to recover funds from the entity you paid if you want your money back. .

This was not an EFT, even though I used online banking to pay the bill.

There is no reason that a casino should not be able to contact the processor they sent our money to to ask if the funds were transfered to our bank account and if so when. Once our bank recieves the ach, the funds still need to settle, meaning the originators bank must provide the actual funds. Until the transaction actually settles it does not matter if your bank posts the transaction to your account or not, it could still be reversed if the funds do not actually transfer. That is why you shouldn't spend the money until the bank can verify settlement. Your bank may allow you to draw against a check you desposit before it has settled because you have funds in you account to cover it if it bounces same thing with ACH payments to your account, but until the money actual "changes hands" there is always a chance that check or ACH can be returned for nonpayment. And then the bank will take the amount out of your account balance and charge applicable fees. Even though they "posted it" and the transaction was no longer shown pending on your online statement. .

That was the point of my story. You would think a bank would be able to contact their payment processor and ask them if a paper check the processor issued was cashed. But my bank couldn't. There simply was no mechanism for my bank to get an immediate answer.

So, third party processors should easily be able to provide the date they transfered the funds, where they transfered them to and whether or not they settled the transaction once the ACH processed the transaction between financial institutions. Also there is no way once it is sent through the ACH(automated clearing house)that it takes 21 days to reach the your bank. It may take a little longer to reach the ACH if their bank transfers it to a u.s. bank account that then submits it to the ach for transfer to our bank account.. Which is probably what is happening. But still unless they hold it up along the way it won't take 21 days .

As I said before, my bank had no open line of communication with their processor to determine if the paper check they issued was cashed (or if it was even sent in the first place. The bank just deducts the money from my account and then tells the payment processor to cut the check.)

If your bank sent a paper check instead of an eft, they should have been able to tell you if it was cashed. And you also can stop payment on those transactions just like any other paper check. I know this because I pay my lawn mower company in this manner. If the check is lost, you tell the bank and they void that check and issue a new one. This is how Bank of America handles it. It is one of the largest U.S. Banks. I have had to do that before. You do have to speak with the online banking customer support, not the regular banking customer support..

Yes, it was a paper check. And yes, I navigated the bank telephone menus until I got to online banking support. And yes, the teller when I originally called stated exactly that, that it was no problem to put a stop on the check and credit my account. Only it never happened. When I called back, neither of the two other tellers I talked to could even grasp how their own online banking system worked, and the higher level support, while he understood, he had no answer for me as to what happened. When I called back 2 weeks later, the next teller could give me no answers as to what was going on. When I resorted to walking to a bank branch and getting help, the bank manager spent 2 hours making phone calls and getting nowhere. No one could tell him if the check was cancelled. He simply had no way of directly communicating with the payment processor to get any answers. There was no system to even see what the status was of the request. And when I say 2 hours, I mean that I looked at a clock when he started and looked again when he gave up, and it was 2 hours later. And he had done nothing else during that time.

The only excuse for non-payment of our funds is the processor dragging their feet. Or totally screwing up the transaction..

While I understand their position, if the shoe were on the other foot, we would be santioned by the casino, click2pay, etc. and accused of interfering with payment (read terms and conditions of you ewallet accounts) They accept no excuses from us if our Banks screw up. I know first hand. They charge us NSF fees and block our accounts. Unfortunately they have us over a barrel.

I dont disagree that the casinos hold their customers to higher standards than they hold themselves. The point of my post is that simply that if a major US bank cant communicate with their payment processor and get immediate results, and multiple conversatoins lead to no answers, then an online casino might suffer from the same problem through no fault of their own.

 

[Da_Gambla]

The point of my post is that simply that if a major US bank cant communicate with their payment processor and get immediate results, and multiple conversatoins lead to no answers, then an online casino might suffer from the same problem through no fault of their own.

I risk repeating myself from another post (what can one do? These 'no payment' threads have overrun these forums!).

I totally understand your post, but let's be real. Your story deals with a very rare happenstance. On the other hand, these casinos have been in business multiple years and are PROS at using electronic funding. Even given that so many players in that middle-man market dried up, there is still no excuse for this many problems after 6 months of warning.

I'll briefly repeat what was in my other post... there is no motivation for the offshore casinos to spend energy on getting US payouts to the customers in a timely fashion. The US customers are gone for good more than likely (at least a massive majority). Also, by using this whole debacle to fuel the excuse and delay system, the casinos are making considerable INTEREST on the 'float' of these funds that are supposedly 'in limbo'. Interest on the float value of millions is nothing to ignore, and if they can't make money directly with US customers, indirectly is good enough for now.

I will also repeat that there are literally hundreds of ways the casinos could balance out this wait. They could pay interest on the tied-up funds (rather, pass it along), or add substantial online comps for the inconvenience. In other words, they could take a really $hitty situation and turn it golden. the customers -could- be satisfied and remain loyal. Why won't the casinos do this? Not even one? I'll leave it to you to figure out.

- Keith