[Closed] Banking and weekend transactions

its stupid but im half sure its due to back end tech and the fact banking systems are just so out of date. Despite most having a fancy app you would be amazed at how dated systems are. Its mostly down to the fact they can't tell if/when the payment will/wont make your go into the red.

im just a product designer at a bank, but if there is a dev from a bank here or someone that works in systems I would love to know a more detailed reason. When I ask at work people just roll their eyes like im asking for some sort of magic beans.

All dates fall on a weekend.

The reason they still do it is probably just because it’s left over from days before automatic transactions.

Banking “tradition” then I guess. About time it was fixed really.

All dates fall on a weekend

This means what?

Banking systems may run on steam but I just switched banks and the switching service did everything, payments in and out. I didn't have to do anything post instruction. Sorry no idea why dd s don't go out at weekends I didn't know either.

This means what?

Whatever date you pick it will at some point occur at a weekend as 365 days doesn't divide by 7.

4 October 2021 doesn’t. 5 October 2021 Doesnt. 6/10/2021 doesn’t. They are dates.

Every other banking transaction works on a weekend!

No, they don't.

4 October 2021 doesn’t. 5 October 2021 Doesnt. 6/10/2021 doesn’t. They are dates.

In the context of direct debits (and this thread), you set them up to recur on a set day of the month eg the 4th of each month, which will at some point occur at a WE.

I worked at Lloyds acouple of years ago. They were still faxing things around and printing out emails and putting them in a folder which was then taken away and put into an archive.
I was very surprised when I saw their systems.
.
It might just be a Lloyds thing, I would often ring, say, Barclays and say can I fax this to you, and they would say, erm... I'll go and see if we have a fax machine anywhere and sound confused.

In the context of direct debits (and this thread), you set them up to recur on a set day of the month eg the 4th of each month

nah, it’s irrelevant (as well as bloody obvious) - when you first set up a dd/so it asks the date you want it to go out, you set a specific date, not just a day and a month and year like oh, whenever you feel is a suitable time, cheers mr bank. For example the s/o that made me question it, says next due 2 Oct 2021. This is wrong, as the bank won’t pay it til the 4th, so why doesn’t it say that? is their software so basic that it doesn’t have days against dates?
Its shit, even if your irrelevant date fact somehow says its not.

For payments to be made requires both payer and payee clearing bank to be able to send and receive payment messages, respond with acknowledgements and perform reconciliations. Historically the weekend is used for maintenance, DR testing and upgrade across the industry otherwise chaos would ensue.

Plastics still operate as these are managed via Visa and Mastercard schemes mainly.

Plastics still operate as these are managed via Visa and Mastercard schemes mainly.

Apart from the acquirer settling with the merchant via Faster Payments, CHAPS, SEPA...

Faster Payments works (from a consumer) point of view at weekends. I don't know if  the interbank settlement via BoE accounts works at the weekend - I suspect it does. Faster Payments is a more modern scheme though.

All dates fall on a weekend

Nonsense, Shrove Tuesday doesn't...
Neither does Maundy Thursday...

😉

I suspect it does.

It doesn't.

when you first set up a dd/so it asks the date you want it to go out, you set a specific date,

No you don’t. You set up a date in a month for it to come out, in the small print will be the next working day clause.

For payments to be made requires both payer and payee clearing bank to be able to send and receive payment messages, respond with acknowledgements and perform reconciliations. Historically the weekend is used for maintenance, DR testing and upgrade across the industry otherwise chaos would ensue.

Yep, this is the reason. It requires the databases, the messaging systems, the transaction systems etc,. all to be up and running and they don't tend to be running overnight Saturday but in a lot of cases they close on Friday evening and the nightly batch runs (updating ledgers, payments and all the other banking systems) Saturday and Sunday used for DR tests, upgrade etc,. and start again on Monday morning.

As an example things like DR tests come under resiliency which have to be done, and proved to be successful, to meet regulator requirements and with lots of data centres and lots of upgrades fitting them all into the 52 weekends is already difficult.

what joepud and kerley said.

the uk banking industry was built on merger upon merger. i work in a similiar industry similiar history. we still operate a system older than me..

its no wonder the upstarts with no baggage do so well in transactional data such as IT and banking.

The UK Direct Debit system is a batch system that uses a central interchange service BACS.

Organisations collecting money send a file of requests (on day 1) to BACS electronically who then generate a file for each member bank and send it to them (on day 2) . Each bank then processes the file, typically as part of its daily batch cycle and returns a response file to BACS, when then processes all the responses from the different Banks and sends each collecting organisation a response file, as well as crediting the collecting organisations back account (on day3). This operates over a 3 day cycle.

This is a simplification - as it a few year since I was involved in developing systems to DD collections for a major UK entity.

As well as batch jobs to process DD collections there is a batch process to accept / amend / cancel DD requests.

The DD scheme rules require a waiting period between a DD collection being set up and the 1st collection being made to allow the client to receive notification of the schedule of payments, and have an opportunity to cancel.

I think a significant proportion of the UK population and hence forum members will have had a payment collected or received a credit by the now retired system that I was one of the developers of :-).

This is different from "faster payments" and card transactions which are processed on a per transaction basis.

As others have said Banks only run their main batch cycle on banking days - which exclude Saturdays, Sundays and public holidays. This works reasonably well for all concerned as others said it gives time for maintenance at weekends and avoids having to staff all support roles 7 days a week. Same applies to the clearing cycle for paper cheques.

There are rules that govern what happens when collection date falls on a non banking day.

The consumer and business need for a payments outside this batch cycle outside he clutches of Mastercard / Visa has lead to the introduction of the 'faster payments' product. Though to complicate things collecting organisations can submit a batch file of requests!

worked at Lloyds acouple of years ago. They were still faxing things around and printing out emails and putting them in a folder which was then taken away and put into an archive.
I was very surprised when I saw their systems.
.
It might just be a Lloyds thing, I would often ring, say, Barclays and say can I fax this to you, and they would say, erm… I’ll go and see if we have a fax machine anywhere and sound confused

RBS was the same. I left in 2009, at the time they were still trying to roll out a 'new' CRM system that was fax based. It was archaic and very expensive, the whole project cost was in the millions, we were supposed to create finance documents (we're talking about very big lends with complex repayments and securities for corporates) fax them to our clients, they'd sign them and fax them back to eFax, which would read the barcode on it and automated payments, anything from £50k to millions. few clients had fax machines, fewer still used them. It became a long process of working around the system.

Prior to that, we created 20+ page finance agreements in Word (or even pre-printed carbon paper!) drove down to get them signed, drove back and then sent that lot via courier to the payment office in Rotherham, after we photocopied the lot and filed them.