Why does it take 3 to 5 business days for PayPal to update my account?

[MayorGreg]

Why does it take 3 to 5 business days for PayPal to update my account after my bank shows the transfer being complete?  My bank shows the debit.  PayPal still says 3 to 5 business days.  It would almost make sense if you had to wait 24 hours but that isn't the case.  

[kernowlass]

@MayorGreg 

https://www.paypal.com/us/smarthelp/article/how-do-i-add-money-to-my-paypal-account-faq1348?app=sear...

Paypal uses electronic transfer not wire transfer for bank to paypal account transfers (cheaper for them).

Normally when a buyer pays funded via a bank transfer ie echeque then paypal credit the seller upfront and paypal take the wait for the funds to transfer from the buyers bank account, this is to prevent any delay of an item being shipped to a buyer BUT when you are adding funds yourself OR its a friends/family payment where its free then you take the wait.

[MayorGreg]

It sounds like PayPal takes advantage of their members by using their member's cash in the interim.  They create an artificial limbo period or purgatory for the money between the time it leaves your bank to the time it gets applied to your account.  Do they use that money to bolster their numbers?  Do they use it to backfill their credit line?  Is the money sitting in a PayPal escrow account in the interim?  Where does the money go?  

[kernowlass]

@MayorGreg 

You never heard of the difference between wire (instant) and electronic (echeques) payments then as you don't seem to have understood my above post?

https://tipalti.com/en-uk/ach-vs-wire/

Thats why buyers post on here confused that their item is on the way and the seller paid when the funds have not left their bank account yet ie paypal have credited the seller in advance and paypal wait for the funds to transfer...again 3-5 business days.

[MayorGreg]

I understand the difference between the two but but what I don't understand is why PayPal doesn't credit my account when the y receive the money.  It's like a scam so they can use the money until they decide to credit you.  That's many millions of dollars a day (maybe billions?) that PayPal has the money in their account and has not made the transfer to the users' accounts.  
The way PayPal explains it, the process could take 3-5 days depending on when my bank sends the money and PayPal receives it.  My bank shows the debit and then the money disappears for 3 to 5 more days.  That's shady!  Must be nice for the PayPal shareholders to borrow my money for a few days.  

[kernowlass]

@MayorGreg 

Because as I have already said they only credit in advance if you have paid for an item so there is no delay in the despatch of that item.

Adding funds to your balance yourself OR friends/family payments etc which are free then you have to wait instead.

You still don't understand the meaning of electronic transfers. The funds leave your bank account but then go via the automated clearance house in 'batches' for processing, so paypal do NOT have them at that point, when Paypal receive the echeque then you are credited.

[MayorGreg]

I appreciate your patience in explaining this to me.  Let me make sure I understand you correctly. You are saying that the "automated clearance house" holds on to my money for a few days?  If that is what you are saying, why would they do that?  It is not like they need to drop it into the mail or take the money someplace and the name implies that this is an automated process.  Why does it take the automated clearance house so many days to do something that is automated?  If Amazon can take money from my bank account and deliver a product to my door within 24 hours, why does the process of moving money take 3 to 5 business days?  It doesn't make sense.
Seriously, I am not trying to be difficult.  I just want to know where my money disappears to when it leaves my bank and before my PayPal account is credited. Who has it and why?  You may have answered the who but not why.  Why does this automated clearance house take several days to move the bits and bites of one account into another?  What are they doing with my money in the interim?

[kernowlass]

@MayorGreg 

The automated clearing house does not hold on to it, they process the echeques in 'batches' so it takes longer.

Try reading how long it takes in this link.

  https://www.nerdwallet.com/article/banking/ach-transfers

[MayorGreg]

Thank you!  After reading the article, I am more even concerned.  It says:

Financial institutions can choose to have ACH credits processed and delivered within the same day, or in one to two business days. In contrast, ACH debit transactions must be processed by the next business day. These timelines are based on rules from the National Automated Clearing House Association, or NACHA, the trade group that oversees the network. Upon receiving the money, a bank or credit union might also hold these transferred funds for a period of time, so the total delivery time varies.

This means that my bank releases the money and then it still takes 5 days for ACH or PayPal to post the money to my account.  There is at least a 3-day period where the money is missing or "pending".  There is still no information available as to WHO has my money and WHY during this period. 
The article points out that the originating bank has the say as to when the funds are released.  My bank notifies me of their release and then it still takes 4 days for the funds to show up at PayPal.  Since I have ruled out my bank as the bottleneck and the article states that ACH can process and deliver the same day, it still sounds like PayPal is holding money for no apparent or obvious reason.  Why does PayPal hold onto the money for an extra few days?  Does PayPal have a cashflow problem they are not sharing with customers and investors?    

[kernowlass]

@MayorGreg 

These are debit not credit transactions so...........if you can't understand and continuously want to blame paypal then go ahead if it makes you feel happier.

How long it takes.

Delivery of ACH transfers can take several business days, meaning days that banks are open — typically not weekends or holidays. Unlike the real-time processing of wire transfers, ACH transfers are processed by a network operator in batches only seven times a day.