Current Account Switch Service: Experience with payment redirects


#1

I’m looking for some feedback from anyone who has used the Current Account Switch Service (not necessarily with Starling) but around one specific area: payment redirects and messages to payees regarding my new account details.

The CASS website says:

Each time an electronic payment is redirected an automatic message is sent back to the originator advising them of the new account details so they can update their records. Some organisations may contact you directly to confirm your details have changed.

But I’m curious how this actually looks/works in practice.

If you had someone that regularly sent you money via bank transfer (Faster Payments or BACS) do/did these people get notified automatically of your new bank details? If so, how does/did this work? i.e.

  • If it’s from someone’s personal account, does a message appear next time they try to send you a payment? What form is this message in?

  • Do the account details just update automatically most of the time? e.g. if my friend were to log into their online banking to make me another payment post-switch, will the payee in their account have been updated with my new details?

  • If someone does try to send a payment to my old bank details and the payment gets redirected to my new account, am I able to identify that this payment was redirected, so I can make sure to inform the sender to update my bank details for next time?


#2

My understanding was they get a file with that data, however there appear to be two issues, firstly some companies don’t retrieve or read or act upon the file, secondly some use a third party for payments and while that third party get the info they themselves do not. I personally do not rely on the CASS and always individually contact each company and provide new direct debit details. If you rely on CASS it is highly likely that as long as they are being paid, all be it redirected, they will not update your data. They will only look at the file data or write to you the time they don’t get their money.


#3

My impression was that it updates the payee automagically, but I’m not actually sure.

Let’s put it to the test… I switched over to Starling from Natwest late last year. I’m going to check with my Dad if it updated his payee and will report back! :sunglasses:


#4

Ace, thanks James, would be great to hear how this looks/works from the NatWest side.

Just to clarify, it’s my business account that I’m looking at using CASS to switch over to Starling. So I’m not too fussed about Direct Debits, it’s more about knowing how it will look/work from my client’s side as most pay my invoices via their online banking.


#5

Yeah - totally makes sense. I imagine it’s the same for business and personal CASS. I’ll report back shortly!


#6

Apparently, yes. This updated in his account automagically and shows on his account!


#7

Ah, ace! So did attempting to make a payment trigger the account details update? Or does it look like they’d already been automatically updated?


#8

I’m pretty sure this would be updated when somebody makes a payment.


#9

Thanks James. Good to hear that no action is likely required from the paying party.

Still interested to hear anyone else’s experiences.

Do all the main banks update the details automatically like NatWest did?

In what circumstances don’t the details get automatically updated?

If they’re not updated, and the payment gets redirected instead, am I able to tell that the payment was redirected? So I can notify the sender to manually update my bank details instead.


#10

The current account switch service has rules in place that all banks follow. How they internally process things is the only difference and its minor.

Barclays for example when you initiate a Current Account switch out, it notifies all your payees automatically before they have even tried to pay you.

Natwest they notify businesses immediately, all others they notify when they try and make a payment to you.

HSBC just forward the payment on, they only notify the other party if its a business, they don’t notify personal accounts, although that may have changed recently.

With some banks if its only redirected they prefix the payment with your name, some prefix it with a word for example RBS use Switch Service Redirect as a reference.

So there is no simple rule on how each individual bank works. The CASS only states they have to forward on payments for a certain period. Since the end of last year, banks where possible notify payees of change of bank details, due to the nature of banking that doesn’t work with every account.

How Starling report forwarded payments, I have no idea, I’ve not actually tried with Starling.


#11

Wow, thanks for that. It’s incredible useful, just the insight I was after!

So just to be clear, as to whether redirected payments are marked differently is up to the originating bank? Not the receiving bank?


#12

The originating bank sends the payment, they have the facility to add a reference or note, most do. The originating bank also should be changing the bank details to the new one automatically, but that is still hit and miss, although they all say they do it, but loads of people that have switched will confirm it is hit and miss. So I’m stating a real life situation not the official line.

Banks get a redirect report when a payment is sent to an account that has been closed under the Current Account Switch Service, its really down to internal processes on how they handle the data in the automated report, some are still slow and don’t always do it efficiently, that’s where errors and delays occur. I would assume Starling building the system from scratch, shouldn’t have an issue dealing with redirected payments.

So in answer to your question, officially yes its down to the originating bank, they send the payment and reference, however its really the receiving bank and the processes they use on whether that is shown.


#13

Thanks again, most helpful. Yep, it’s how it works in the real world that I’m after.

@StarlingSupport So are you able to confirm how you indicate if a received payment had been redirected?


#14

Digging for an answer on this one. It may be tomorrow though!


#15

Thanks James, no worries.

@daedal One last question: a couple of my clients are in Europe and send me invoice payments in EUR using my IBAN and BIC details. Presumably I will definitely need to manually tell them my new IBAN & BIC, but if they made a payment to the old details would a redirect still occur?


#16

The Current Account Switch Service technically only covers payments using a Sort Code and account number, however all the big banks will transfer payments made quoting an IBAN & BIC details to the new account.

The reason they don’t fall under the Current Account Switch Service is actually simple, the banks can’t guarantee the payments will be made, so they fail with the guarantee they are offering if they allowed the payments automatically.

The terms of the CASS are the same with every bank, and they all state this as regards to non Sort / Account number payments.

If you have any existing regular payment mandates that are non-sterling, or that quote a BIC or IBAN, these won’t be
switched to your New Account automatically. If we can facilitate non-sterling mandates, or ones that quote a BIC or IBAN,
you will have to provide us with the relevant details separately so that we can set them up on your New Account.

After the Switch Date, payments received in sterling from within the UK, Channel Islands and Isle of Man by your Old
Bank will be redirected and credited to your New Account on the same working day that they were received by your Old
Bank.

The actually terms don’t specifically exclude IBAN & BIC payments (although clearly states only Sterling transactions are forwarded), but the terms don’t specifically include them, although in practice banks will forward the payment on.


#17

Extremely helpful @daedal on this thread :+1:t2: