PayPal “near real-time” transfers to take 6 hours

According to the BBC, PayPal reckon that all their technical glitches are over and payments should now be hitting your bank account more quickly.

The article explains that “technical issues” in the UK that led to a string of transactions being sent for security checks have been solved. They go on to say that transfer of funds into bank accounts should now take place within six hours. PayPal still have a regulatory obligation to make a certain number of security checks so for a small number of transactions it may take longer but it will be a “very small proportion”.

I have to say I’m slightly bemused by all this. I was under the impression that Faster Payments was in most cases instant and at the worst would occur within two hours. Six hours isn’t “Faster” payments, six hours is a four hour hold for everyone followed by an eventual faster payment.

It’s understandable that PayPal won’t be sharing their algorithms for selecting payments for hold – be it frequency, amount, seller history etc, as that would enable selers to game the system to access their funds. What isn’t understandable is why if a transaction isn’t selected for a security check what the four hour delay is for.

Contrasting transferring money to your bank account, I’ve yet to hear of anyone complain that every time they try to make an eBay purchase PayPal delay the payment for up to six hours. Personal payments between PayPal accounts also seem to be instant. If I can spend my money or send it to a friend why can’t I withdraw it to my bank account in a timely fashion?

I’ve been reviewing the statement that PayPal gave Tamebay in January which said “although PayPal is not a UK Bank it will give its UK customers the same almost instant real time money transfers to bank accounts as offered by UK banks in the Faster Payments scheme. Other organisations use the Faster Payments system in a different way, delaying the transfer of funds by a number of hours. PayPal took the decision to be the first non-UK bank to provide near real-time transfers to give our customers the best possible experience“.

Six hours is by no means “near real-time transfers”. Come on PayPal, you promised you’d give us Faster Payments. You let us pay trading partners with “near real-time transfers”. Now let us transfer money to our bank accounts at the same speed.