Why does it take 3-4 business days to withdraw funds from paypal to my bank account?

[mrbart518]

I curious as to whay it takes 3-4 business days to withdraw funds from my paypal account to put into my bank account that has already been verified?

I'm new to paypal and thought being as a friend can send funds to me from his paypal account instantly, that I'd be able to withdraw those funds from my paypal account and put into my bank account just as quickly.

[PayPal_Adrian]

Hi Justin23!

You're exactly right - balances aren't usually kept by individuals who do a lot of online buying.

However, there's no need to "Add Funds" to your balance before making a payment.  If you have a credit card on file, you can use the Instant Transfer option.  This still debits your bank (and the transfer still processes in the background), but because you have elected to pay via a credit card in the even the cheque doesn't clear, PayPal pays your seller in advance.  That way, you have your item sooner because the seller is paid immediately!  We don't offer this on withdrawals or Add Funds, though, because if it fails, we would have to charge the card as a cash advance - and that could result in some nasty fees for you with your card issuer.

Thanks!

Adrian

[Trina8]

it's not only Paypal. Even if you get a direct deposit from the IRS and many times from jobs it is actully transfered a day or two before sitting there before it gets released to your account. This would be your BANKS fault not paypal etc when that happejs

[ComeOnMan]

Trina,

I'm sure most people will agree that a one day turnaround for funds is a manageable time frame. 3-4 business days can mean eight days when you throw a weekend into the mix and if you requested your funds after 5pm EST that first day. That is a long time. Period. It takes less time to move tens of millions of dollars between businesses. Which is disappointing because that is all that is happening here.  JP Morgan Chase funds faster than any other consumer bank out there (fact) and it takes seven days (with the aformentioned circumstances) for Paypal to fund my accounts. For people whose livelihood depends on the money coming in through Paypal, this is unacceptable.  Paypal makes money on this lag time. Period.  I would be willing to gamble that Paypal adds a "feature" in the near future where you can instantly access your money (for an additional fee of course). As for you, my dear, going in to a forum where users are trying to figure out why, in the 21st century, it can take a week, or more, to get their money and telling them that it's their BANK begs the question, do Paypal employee forum posters get paid well?

-ComeOn(wo)Man

[PayPal_Olivia]

Hi ComeOnMan, and welcome to the forums!

ladybugsakuya04 and Trina8 are correct. The one thing I'd clarify from Trina8's post is that it's not a matter of fault, but a matter of process. The funds move in batches to multiple institutions, and it takes time for the processing.

The ACH process of moving funds is a more cost-effective means of safely transferring funds. If wire transfer were employed as a means of moving money more swiftly, it would be prohibitively expensive. The Automated Clearing House process allows us to keep our costs lower, which means keeping your fees lower. It also means that we can offer most of our services for free.

You can learn more in this FAQ. Most of it is information that Adrian already covered in his post last month, but there's also a link to the website of NACHA - The Electronics Payment Association, which oversees the Automated Clearing House process. You can learn more about the process there.

I hope this helps clarify!

Olivia

[Vancedean]

No, nothing anyone has said here explains why it should 3 - 4 days to process a funds transfer from my PayPal account to my personal bank account. Just because transactions are sent in bundles to a clearinghouse shouldn't require that a recipient wait. This practice ought to be investigated. I signed the change.org petition. I hope others will, too.

[Rglater]

Can PayPal show that it takes 3-4 days for payments TO eBay to clear?  You are potentially getting a 1-4 day float while transferring to my bank but if the company that owns yougets paid instantly and this happens millions of times that's quite the racket.

Of course if I had a PayPal debit card I wouldn't need to transfer but I was denied something I didn't quite understand it's a Debit Card not a Credit Card.

[Rglater]

This is asking for a slightly ifferent explnetion.  When I request a transfer of money from my bank to PayPal and PayPal "tells" my bank this my bank puts those funds on hold.  Correct?  If Paypal's computer can communicate with my bank instantaneously then why cant the funds move instantaneously?

Does ACH have to tell their customers (a bank or PayPal) how well they are processing funds?  If their numbers lag do you pay less?  

Can you point me to research that shows what it would cost to do instant transfers versus ACH?  In other word what pproach does a wire transfer use that is faster and why does that cost more?  Would it cost less if every entity used it (economies of scale)?  Would it cost more (clogging the system)?

Aside from my genral grumpiness on the issue (and don't get me started on the Float built in to "Pending") I find the back ground system of interest and I assume someone at PayPal knows the answer.

BTW- Any answer that simply says "but we told you it might take 3-4 days" is not an answer.  Let's dig deep.

[PayPal_Adrian]

Rglater -

First, love the questions.  It's always nice to see well thought out inquiries!  The different financial networks and how they operate are very complex, very interesting, and if you're not familiar with them, they can seem a bit unexpected. There's a whole world behind processing payments and transferring funds that most people never see or even know about, and that part alone makes it interesting to me!

When PayPal requests an ACH transfer, the funds are not always placed on hold from your bank account immediately.  We can send a request and start the process quickly, but the amount of time that elapses from when the request is made to when the bank holds the funds in advance can vary for a number of reasons.  Sometimes the bank is behind or there's a systems issue anywhere along the way slowing things down.  Sometimes the bank just isn't open at the time we send the request, even though the mail is waiting on their doorstep, so to speak.

You point out a great differentiation - the request to hold funds and the actual transfer of funds might be a separate system and a separate process.  This is also a portion of the reason why there are several different types of ACH (yep, there's more than just one!) and wire transfers.  Delving into the finer technical details and differences is beyond the scope of these forums, but I can point you at a great starting point for further research - NACHA.

Thank you for the inquiry!

Adrian

[Washrl]

I had money from my bank account transfered to paypal around 6 days ago.  I understand it takes 3-4 buisness days but now the clearing date has been pushed back to JAN 5 2012 originally from DEC. 21 and I requested this withdrawl on DEC.17. Is this a glitch or something?

[PayPal_Adrian]

Washri -

The initial transfer period is 3-5 business days (weekends/holidays don't count).  If the first attempt to pull the funds fails for whatever reason - the account can't support the transfer, the banking information is outdated, there is another issue that prevents the bank from sending the transfer - the transfer waits two business days before proceeding again. If it fails a second time, the Add Funds will cancel out.

If your estimated arrival date is January 5th, that would mean the transfer had to be re-attempted.  It also would indicate that your transfer was initiated somewhere between December 17th (a non-banking day; Saturday) to as late as December 22nd.  Given that you've already received notice it wasn't honored on the first presentation, and today's date, my best guess would be it was initiated closer to the beginning of that period.  I would recommend reviewing your History in PayPal to see the exact date of when the transfer was initiated.

Also, a factor to consider is that transfers around this portion of the year have to contend with both the holidays (banks don't complete transfers on holidays or weekends) as well as increased volume, which can place the banks behind in completing your transfer.

However, if you're trying to complete a payment, there's no need to add funds into your balance first.  If you complete checkout, PayPal will just debit your bank directly for the cost of the purchase.

Thanks!

Adrian