How long should an electronic check take to arrive

USA question. I paid my health insurance with an online check 12/13 for the first time. The insurance company had the money by 12/14. The insurance company did not credit me until 1/4 so three weeks lag time. I used to have them paid directly by my credit card which went through overnite. This is from wells fargo bank, largest bank in the USA, forth largest in the world, not some little rinky dink operation who would not be recognized by the big bad insurance company.
Does three weeks lag seem like a lot for an all electronic transaction. I would think a paper check would be faster.

The insurance company does not have direct payment unless I let them take out as much as they want when ever they feel like it. Afterr being burned by Kaiser health I would not allow that.
Bill D.

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The insurance company did not credit me until 1/4 so three weeks lag time.

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That could be a billing anomaly. If your payment wasn't due until the 4th they may have a system that doesn't allow them to show it as on the books until then. Insurance companies can be weird that way.

What you want to watch out on is some places will take your payment and the date it clears becomes your new payment date. What ever residual was left from the previous payment just disappears. This mostly happens with annually recurring payments.

jtk

I don't blame you for not letting them take money out of your account. But that's a long time for an electronic payment. My bank is slow and payments usually go through in a couple of days.

Mike

Banks generally follow the government holiday schedule. There were two 4 day weekends in that time span which means there were also four 4 day work weeks. I'm not aware of how the Wells Fargo system works, but when we use electronic checks we need to enter a date when we want the payment made.

It sounds like the payment was received by your insurer overnight, but the insurer was slow posting it to your account. I've had it takes weeks, occasionally, for a company to post the payment to my account. When a credit card payment was "late" because of this I was able to show that the money was received by the company well prior and all interest and fees where reversed.

I paid my wives life insurance by check three weeks before the due date. I received a letter that payment had not been received by the due date. Called them and they told me they had not received the check so I stopped payment on the check and sent in a second payment then received a letter that payment was rejected because the check had a stop payment on it, this was the original check we sent. They apparently really had the original check but not processed it in a timely manner. I incurred a stop payment charge all because the insurance company was guilty of not processing the payment in a timely manner. I know they had the check because it had a date received stamped on it that was prior to the due date of the payment.

Some banks do not use electronic transfer for "online bill paying"...they actually send a check for an aggregated amount to a payee. But then again, some payees don't process payments immediately. Who knows what happened here within the range of possibilities. Only a true electronic transfer "hits" with reasonable immediacy since it's account to account. So if you don't want to use a credit card, but do have a debit card for the account you're paying out of, use the insurance company's online payment process with the debit card for "immediate" payment.

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Originally Posted by George Bokros

I paid my wives life insurance by check three weeks before the due date. I received a letter that payment had not been received by the due date. Called them and they told me they had not received the check so I stopped payment on the check and sent in a second payment then received a letter that payment was rejected because the check had a stop payment on it, this was the original check we sent. They apparently really had the original check but not processed it in a timely manner. I incurred a stop payment charge all because the insurance company was guilty of not processing the payment in a timely manner. I know they had the check because it had a date received stamped on it that was prior to the due date of the payment.

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Ever hear of a "Certificate of Mailing?" Proves you mailed an item First Class to a certain address, on a certain date. Legal proof of mailing. Saved my butt once when paying child support. Got drug into court for non support. Had copy of cashiers check, along with certificate of mailing. Problem was in clerk of court's office. Actually saved a bunch of guys butt, as my case was the first called, and I had proof that there was a problem in the clerk's office. After showing proof to judge, he recessed court for 30 minutes and got actual Clerk of Court to go fire an employee who wasn't doing their job. Judge appoligized to all who were wrongfully brought in.

An "electronic check" is not a check at all, but a form of electronic transfer using the Automated Clearing House (ACH) system. Sender contacts the vendor, vendor uses a payment processor, and payment processor uses a bank which can credit or debit the Federal Reserve. Payments are usually debited from the sender's account by midnight of the same day and credited to the recipient by the next day.

Payment is debited from sender's account by the payment processor using the vendor's payment processor. Payment Processor uses a bank that can send/receive payment out of the Federal Reserve. The Fed scoops the payment out of the sender's account, it goes to the Fed and then to the bank that the payment processor uses, and then using a separate order system from that sender's bank back to the Fed and to the recipient's bank, then to the recipient's account. It should all clear within 24-48 hours, often same day.

That's true, Thomas, but some bank's definition of an "online check" may be different and their internal processing systems may batch transactions, especially when the payment isn't within the same back. There are a lot of variables and unfortunately, sometimes things are not done in the ideal way. The issue could also be at the insurance carrier end, too...sadly.

With our online bill pay in some instances a physical check is still sent by a 3rd party if the recipient doesn't have the ability to process electronic payments. Our water bill is an example. The city doesn't have electronic payments set up so our bill has to be paid by check. Using the online bill pay saves us the cost of a check. Many other bills we have on autopay are deducted on the due date. This is controlled by the recipient. Whether that is the case here I don't know. We used to have US Cellular and they were aggravating. It was on autopay and they would show we were past due on the bill and THEY chose the date they were paid. Not a big deal but annoying.

My wife made electronic payments to Mahindra finance on our tractor. They invariably screwed up the date, whether to credit it to principal or interest, etc. When we were sending the last payment, we couldn't get them to give us a pay off, so we figured it as closely as we could and added $3 . At the same time we sent them an email to refund the balance. That took two months.

Just did a review of checking account this morning. I always do this before sending out bills. During last month, average electronic payment took about five days to clear, but the the two checks I wrote, cleared my account the next day. So much for electronic checks speeding up transactions. As of this morning, Duke Energy bill, written and mailed two weeks ago hadn't cleared my account. That's why I stop at post office, get printed postage and get a receipt, which shows date and zip code letter is going to. Due to volumes of payments, Duke has it's own zip code, so there is no confusing this payment with any other mail.

I figure the cost of a check and mailing it is around 75 cents each. So paying online saves me quite a bit each month. It is even better if I can pay by credit car dand eran brownie points.
Bill D.