Why it takes 3-5 days for disbursements to show up in a bank account?

[sacka_man]

I never understood why it takes 3-5 days for money to be transferred from an Amazon seller account into a bank account. This means that for 3-5 days your money is in control of someone else and cannot be used. What is going on behind the scenes with the banks that makes it take this long?

Amazon payments show up in my bank account as "CCD - AMAZON.COM", I looked up what CCD means and it stands for Cash Concentration and Disbursements which is apparently an "electronic payment used to transfer funds between remote locations".

Payments from Paypal also always take 3-5 days and always show up as "ACH - PAYPAL". ACH stands for Automated Clearing House. So I think ACH and CCD are related, I'm just not quite sure how.

In our age of instant communication, I would assume that money transfers could be immediate, but I know that companies have to worry about fraud all the time, so I'm curious what is going on behind the scenes that make these types of transfers take 3-5 days. Is it Amazon that holds the money for 3-5 days to avoid fraud, is it the banks that holds the money for 3-5 days to avoid fraud, or is it another in between party that holds the money for 3-5 days to avoid fraud?

REALLY curious about the technical aspects of what goes on behind the scenes. Thanks for any insight you may provide.

[jeffweico]

I'm not sure about CCD, but Amazon uses ACH like everyone else. The 3-5 day difference between their supposed "payout date" and the money showing up in your bank account is an AMAZON issue. I am very familiar with ACH, my previous employer used it all the time to transfer funds to clients. ACH is nearly INSTANT. Banks MAY hold all of their ACH transactions and process them in one big batch at the end of the day, but I don't know of a single bank that holds these transactions for 3-5 days.

Now, WHY does Amazon do this? It COULD be fraud prevention - to give them a little more time to review transactions - but it could also just be some internal issue where they batch payments and process them a couple of times a week for reasons of efficiency or cost containment.

Amazon and some other processors would like you to believe that this is dependent on your bank, but that is simply not the case.

[GreenBean]

I have always taken it to be a combination of both parties.

Banks schedule transfers daily. ( whisper used be they were earning interest on the incoming monies).

The different selling platforms do their transfers daily as well. Two factors come into play as well. Fraud protection & possible interest earning would need to be considered.

Back in the day, accounting was done manually. Such memories.

[sacka_man]

Originally Posted by jeffweico

Amazon and some other processors would like you to believe that this is dependent on your bank, but that is simply not the case.

If that were true though then wouldn't, for example, Paypal take maybe 3 days and Amazon take 5? Or Amazon take 1 day and Paypal take 8? It's weird to me that they seem to take the same amount of time, which leads me to believe that it's the ACH process itself that takes 3-5 days, not the retailer. However, it could also be a "tried and true" method for these companies to earn a few extra dollars without inconveniencing the customer (us) _too_ much, which could also explain why they both use it.

Originally Posted by GreenBean™

Back in the day, accounting was done manually. Such memories.

Heh heh, you must have been around the block many times to remember those days - I have been doing this for many years now and do not remember those days.

I also agree with you that holding the money for 3-5 days so that _somebody_ (who?) can earn interest on our money is something to consider as well.

[jeffweico]

When I request a transfer from PayPal it normally shows up in my bank account in 24-48 hours. For Amazon it always takes 4 days. So, there IS a difference.

[zoneout]

I am pretty certain the government has its nose into this for obvious reasons. Hence the delay.

[user3657]

Originally Posted by zoneout

I am pretty certain the government has its nose into this for obvious reasons. Hence the delay.

Yea, everthing gets passed to the "ACH" AKA Our Gov, then from there it gets routed to your bank.

ACH wants to keep track of our every move and I would guess they double dip and gain interest on it too.

[TonyAlmeida]

For me. From Amazon to Ingdirect take less than 24hrs. From Amazon to BOA around 48hrs

[tmastermind]

My PP withdrawals takes max 2 hours for transfer, in 95% of cases its like instant as in the time it takes me to log out of PP and log into my online banking and its there!

AZ is still 3-5 days though :( Wish that would be a 2 hour thing!

[trig]

from my experience it has a lot to do with the bank you use. BOA & BBT is under 48hours from the time you get the email. others can take 3-4 days.

[quantum773]

Amazon and Paypal usually takes less than 3-5 days from my experience. For me, it takes about 24-48 hours. In regards to the delay, money takes time to clear from institution to institution, just like as if you were making a deposit with a check from a different bank. Money actually has to be moved and cleared. I work at an investment bank and everything has to be cleared first before electronically transferred, unless a wire is processed. Wires hit banks immediately, but are more expensive and have cut-off times. ACH and CCD are codes for automated clearing house.

[rsot]

Originally Posted by zoneout

I am pretty certain the government has its nose into this for obvious reasons. Hence the delay.

Would not jump to this rumour for EVERY bank delay. I deal with other countries and there are delays there too. Lot of variables involved including the bank itself.

[jeffweico]

I doubt that the government is reviewing every ACH transaction made. There are MILLIONS each day, probably millions every hour. I'm sure the government can ACCESS this data if they want it, but I don't see why they would need to review it in real time. ACH leaves a paper trail, which is what the government likes. I would think they are more concerned with things like Western Union and MoneyGram.

[sacka_man]

It seems like it is all speculation in this thread but still a _lot_ of good ideas bouncing around.

I wouldn't be surprised if governments (US gov't especially but other countries too) have access to this data somehow and keep a record of it electronically, but I don't think that would cause too much of a delay, if any.

Based on what people are saying in this thread it seems that the amount of time people have to wait varies greatly depending on what bank they use. I use a smaller credit union and it always tends to take 3-5 days regardless if I'm transferring from Amazon or Paypal. Usually it's closer to 3 days. I think Amazon/Paypal say "up to 5 days" to cover their butts.

[glacier922]

I'm going to be cynical here. They do it to make money off of your money.

[rsot]

Originally Posted by glacier922

I'm going to be cynical here. They do it to make money off of your money.

A day or 3 at some re-investing rates....sure they good do it. Banks have departments just for these kind of purposes so sure.

[GreenBean]

A point not mentioned in all of this is the simple fact that the actual check needs to go from where it was used to the ACH to complete the procedure.

This is not done physically at once although it does happen online (almost in an instance).

Time delays happen there.

Smaller branches of a bank will have all their paperwork delivered manually to centralised offices. This is usually down towards the end of a business day.
Bank balances online at its address all daily transactions . It sends all the vouchers ( by courier) to be sorted, balanced again.
Cycle is repeated and what is needed by the ACH goes there...
So many procedures exist depending on the transaction.
Literally, our own money can be in cyberspace

[mari]

No transfer should take that long. I opened a square store and my money was transferred the next day! There was no holds, no blocks, I had the absolute best experience. The only thing is getting traffic there.