Everyday Banking

[#1]

Given banking transactions are generally processed electronically these days, and not manually by data entry why are there still payments and cut-off times.

What stops Australian banks processing our payments 24/7, including on weekends and public holidays?

[#2]

This is supposition, but I think that's likely because not all payments are electronic. Some are still manual - going into the branch, and banking with a teller. Some people still use cheques (which seems crazy, but hey. Change is scary and there are folks who cling to them. Like my Nanna, bless her cotton socks). Sometimes people don't have enough money in their accounts to cover things, so the cut-off time gives a chance for them to catch up their account or for the payment to bounce so the other bank knows they can't credit the recipient. 

Cut off times need to account for all sorts of transactions, including things like international transfers, or real time gross settlements, people's pay or pensions, and the fact that the bank is like any other accounting business, and needs to balance at the end of the day. 

It's a nice thought, though. Hope it happens one day!

[#3]

Thanks for contributing to this one @ChanSings 

[#4 · Accepted solution]

@ChanSings raises some good points - thanks! @cgm while I don't have the technical answers as to why all banks operate this way, there's some really exciting changes on the horizon as part of Australia's New Payment Platform of which one change will see near real-time payments/transfers between banks.

You can read more about this through the Reserve Bank of Australia and the Australian Payments Clearing Association.

[#5]

Wow these changes are exciting @PeteW!

The Australian Payments Clearing Association website advises:

"This multi-layered infrastructure has been designed to promote competition and drive innovation in payment services. It ensures the NPP will be equipped to meet the evolving needs of Australians in the digital age - and beyond."

I'll be watching this space!!