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Circa 2003 I learned first hand that payments from bank accounts (i.e. bank transfers, standing orders, and debit card transactions) were backed by a paper cheq
by Jenk 5y ago
Circa 2003 I learned first hand that payments from bank accounts (i.e. bank transfers, standing orders, and debit card transactions) were backed by a paper cheque from your bank to the recipients bank - at least within the UK.
The big(ger) banks owned fleets of enormous OCR machines that could read and sort cheques at hundreds per second, and hundreds of employees to read the cheques that the machines couldn't. I was on a team that were supporting the rollout and testing a new set of these machines.
I don't know if this is still the case today, but I was surprised then to learn they were still paper backed.
- viceroyalbean 5y agoThat sounds insane. What's the average processing time on a payment in that case?
- Jenk 5y agoMultiple business days for clearance. This was before BACS and SWIFT, so now I am assuming we don't have the same paper trail. A transaction would show up on the system as pending pretty promptly, so you could do your accounting etc - but they wouldn't clear until the cheque was received.
- AnimalMuppet 5y agoBack in the 1990s, they literally flew these on private planes. It was worth it to get a billion dollars in checks to the other end a day sooner, thereby saving one day's interest on a billion dollars. I talked to a pilot who flew those flights. He said that it would be gone in a year or two, replaced by electronic transfer.