Late transfers, slow deposits, and delays are real and expensive nightmares. Banks make errors; you take the hit. Trust us; we know the pain. Slow transactions affect income earners, family members, and friends. They also impact entrepreneurs, investors, and governmental organizations.
Many of us have experienced the frustration of waiting in line at a bank or supermarket only to find that the cashier is having trouble making a payment. We’ve all been there: you’ve been standing in line for 20 minutes, only to be told that your bill can’t be processed because of problems with your bank. It’s frustrating—not just for you but for everyone behind you who has waited just as long!
Most Nigerians Expect Slow Transactions
Recently, I heard a woman, a single mom, nagging about the stress of handling her small business while still having to keep up with uncleared bank transactions. It’s that bad. Most people expect their transactions to be delayed. This one affected a friend of mine. Some time ago, she felt unsafe walking through a dangerous environment. She knew how late it was, so she stopped at every available taxi. My friend had no physical cash and was completely relying on her Bank’s mobile transfer. Unfortunately, each driver refused to cooperate after considering their payment option. They were all sure about having slow transfer issues. The drivers even felt justified about avoiding the potential hassles they’ll go through if their payment delays.
For a long time, the Raven team considered the issue of slow bank transfers. It’s something that customers talk to us about all the time, and it’s something that many companies have tried to address in different ways. We considered this at length before launching our product last year and decided that what was needed was a solution that didn’t require any additional effort from our customers. First, let’s discuss the problems transactions face.
Why are bank transactions slow?
Suppose you complete a transfer checkout process instructing your bank to send money into another account. Your transfer begins as your bank notifies the recipient’s bank. The notification carries encrypted data with details about the executed transaction. The information is essentially permission for the recipient’s bank to make the payment on your behalf – using they are stored up money (assuming they have enough to go around).
Your bank knows that their message was successfully sent, and you receive a debit alert. (Regardless of your recipient’s account balance). In the end, both institutions take their time to balance their accounts and settle themselves.
This collection used to be a good enough method to maximize speed. Traditional Banks only had to trust that other institutions would follow the plan. The process, however, came with potential disadvantages for all parties. One challenge was that settlement depended on transferring large sums of physical cash constantly and needing to move them from bank to bank. But, payments between traditional institutions have the potential for many drawbacks. During unexpected events like the Pandemic, travel restrictions, curfews, etc., the process can take days. During that time, settlement funds can get delayed, lost, or stolen. Unfortunately, such events will lead to challenges that affect future transactions.
A temporal solution
The rise of digital banking made this process easier. Many banks reduced their reliance on human input when executing transactions (From interpreting bank tellers to forwarding transaction data to other banks), and most of the process became automated. The upgraded tech helped reduce the overall time per transaction; it also cut down certain errors that usually led to payment delays.
A digitized banking system was a significant step forward for the industry, but it still left room for improvement. While transactions were now faster, they still required human intervention. There were still points in which errors could be made – especially when dealing with non-standard transactions.
The growing population of banking services with the expansion of digital tech added gravity to the existing responsibility of traditional banks. The process needed for the management, interpretation, and settlement of multiple external bank accounts is already a tedious one, with mistakes ultimately resulting in delayed transaction processes for many banks.
In recent years, several technological innovations have changed this reality once again. To overcome slow transactions, innovative digital-only banks, including Raven, rely on transaction processes that improve speed.
Solution
Raven Bank uses a centralized system that specializes in clearing transfers. The system utilizes a centralized process focused on executing transactions well enough to deliver your money faster!
The process involves a secure receiving depository financial institution. They receive batches of transactions, sort them out, and make them available to the bank or financial institution of the intended recipient.
The receiving depository financial institution then checks for the authenticity and validity of the transaction before authorizing it for settlement recipients.
Because regulators have vetted these institutions, they provide security and convenience for banks and other financial service providers.
Conclusion
With our quick and seamless transfer system, you can send money to anyone. You don’t even need to worry about the recipient’s bank—it doesn’t matter which one they use! Because there is no need for the complex personal bank-to-bank settlement process, processing transactions reduces the cost of transfers.
If you’re one of the many people affected by a late transfer, slow deposit, or hold on your account, you need to act fast. Get started with Raven Bank, download our App on Google Play store and Apple Store; enjoy high-speed transfers.