Umbrella Companies - bank charges for same day payments

[Vallah]

I notice that several big umbrella firms charge anything from £12 to £30 to process a same day payment for contractors. Since the vast majority of the major banks now operate the Faster Payments Payments service for same day payments, and generally charge less than a pound for each transaction, how can they justify such a huge fee?

[northernladuk]

I notice that several big umbrella firms charge anything from £12 to £30 to process a same day payment for contractors. Since the vast majority of the major banks now operate the Faster Payments Payments service for same day payments, and generally charge less than a pound for each transaction, how can they justify such a huge fee?

Prioritising their work to deal with your pay rather than the others not on same day?

[wim121]

My suggestion is to go with a better umbrella.



To be honest, im fine waiting and just being paid by BACS. However I cant remember if it was Excellium or JMK who do CHAPS for £5 (process costs them £4, they charge £1 admin).


Going for umbrella's, I had a big list of questions, that was one of them even though it ranked as nothing of too much concern for me. Feel free to call around and have a chin wag.

If anyone wants the recent list of umbrellas to consider and avoid, feel free to let me know.

[Vallah]

It was more the case that they claim payments have to go by BACS, and that same day transfers come as a premium. When in reality, the majority of payments automatically go by faster payments. Looks like a case of misselling to me, presumably as a way of upping profits.

Here's one such company's statement from their website:

"*Our normal payment method is BACS which can take 2 to 3 days to clear through the banking system. A Same Day Payment guarantees that the money will reach your account on the same day as we process it. "

This company charges £12 for a same day payment. Either they use a bank that doesn't provide the Faster Payments service, or they're the equivalent of Ebay sellers bumping up their profits by adding loads to postage.

Just something to be wary of.

[jmo21]

I'm with Intelligent Finance, and they charge £25 for CHAPS same day payment.

[Vallah]

I'm with Intelligent Finance, and they charge £25 for CHAPS same day payment.

Well that's about right for a CHAPS charge, but why are they using CHAPS instead of Faster Payments?

You should ask them.

[wim121]

I'm with Intelligent Finance, and they charge £25 for CHAPS same day payment.

Wow, they sound like bandits!

It was more the case that they claim payments have to go by BACS, and that same day transfers come as a premium. When in reality, the majority of payments automatically go by faster payments. Looks like a case of misselling to me, presumably as a way of upping profits.

Here's one such company's statement from their website:

"*Our normal payment method is BACS which can take 2 to 3 days to clear through the banking system. A Same Day Payment guarantees that the money will reach your account on the same day as we process it. "

This company charges £12 for a same day payment. Either they use a bank that doesn't provide the Faster Payments service, or they're the equivalent of Ebay sellers bumping up their profits by adding loads to postage.

Just something to be wary of.

Indeed!

[SueEllen]

Well that's about right for a CHAPS charge, but why are they using CHAPS instead of Faster Payments?

You should ask them.

Some banks have different limits for incoming and out going faster payments for personal current accounts.

So even if you have a business account that will pay out large sums via faster payment, it doesn't mean that the recipients personal current account will allow them to receive this.

As I have more than one personal current account and they are my current accounts, it's very easy for me to work out the different current account incoming limits.

However for a business working out that Bank A will allow up to £10,000 , Bank B will only accept £1,000 and Bank C* will sometimes do it via faster payment or may take a 3 day transfer is a load of hassle.

*LTSB and Santander have had complaints about this.

[Vallah]

Some banks have different limits for incoming and out going faster payments for personal current accounts.

So even if you have a business account that will pay out large sums via faster payment, it doesn't mean that the recipients personal current account will allow them to receive this.

As I have more than one personal current account and they are my current accounts, it's very easy for me to work out the different current account incoming limits.

However for a business working out that Bank A will allow up to £10,000 , Bank B will only accept £1,000 and Bank C* will sometimes do it via faster payment or may take a 3 day transfer is a load of hassle.

*LTSB and Santander have had complaints about this.

Banks will automatically send payments by the quickest available method. For the vast majority of payments this will be Faster Payments and not BACS. So claiming that BACS is the default method, and then whacking on a huge fee for a same day payment is not on. Unless anybody from a brolly firm would like to deny that this is what happening and explain how they can justify charges from £12-£30?

[LisaContractorUmbrella]

Banks will automatically send payments by the quickest available method. For the vast majority of payments this will be Faster Payments and not BACS. So claiming that BACS is the default method, and then whacking on a huge fee for a same day payment is not on. Unless anybody from a brolly firm would like to deny that this is what happening and explain how they can justify charges from £12-£30?

Actually banks don't work in that way. The fee structure for BAC's payments and Faster Pay payments is different with FP's being more expensive