The real reason for Neteller payment delay

[JPFisher55]

IMO, the lack of access to ACH is not the reason for Neteller delaying refunding US accounts. If Neteller cannot access the ACH system, then how can they service their non-US customers? Do you really think that the banks servicing Netellers' ACHs can tell the difference between an ACH to non-US customer and US customer. Remember ACHs are completed by computer. I do not believe that software to make this distinction could be put into place in so short a time period.
The real problem is a short term liquidity problem. IMO Neteller only keeps about 10% of its clients funds in cash accounts. The rest is invested in short term CDs and govt. bonds with an average maturity about 6 month.
Now Neteller faces a "bank" run due to their decision to abandon the US market. If they had the cash on hand, then they could issue paper checks if the ACH system was not available. Now they are even stopping transfers from non-US to US customers. Clearly they have a liquidity problem.
They will eventually repay their US customers, but IMO it will take 3-6 months on average.
This situation negatively impacts the online gambling industry more than anything that the DOJ efforts. Neteller will never regain their market position. I predict that within one year, the DOJ campaign will fall to WTO pressure and US court losses. Maybe Neteller should have stayed in the US market, fought the DOJ and suffered the consequences which would not have been as bad for it as the present situation.

[Arnfinn Madsen]

Don't write so long posts when you have no idea what you are talking about. They can liquidate all sorts of government bonds very quickly, also most other ways that have invested clients' money can be liquidately quickly (it takes 2 mins, not 3-6 months, this isn't 1842 [img]/images/graemlins/tongue.gif[/img]). If they haven't made some horrible investments or taken money from accounts to run their operations (both would probably include illegal actions), then your money should be available quickly.

[millerlolife]

Agreed. It would take about 2 seconds (assuming they have the funds) for them to sell their bonds on the open market. Personally, I think people are gonna be screwed out of a lot of money.

[HeavilyArmed]

[ QUOTE ]
Don't write so long posts when you have no idea what you are talking about. They can liquidate all sorts of government bonds very quickly, also most other ways that have invested clients' money can be liquidately quickly (it takes 2 mins, not 3-6 months, this isn't 1842 [img]/images/graemlins/tongue.gif[/img]). If they haven't made some horrible investments or taken money from accounts to run their operations (both would probably include illegal actions), then your money should be available quickly.

[/ QUOTE ]

Much better to keep it short when all you've got is idle speculation.

[JacobsCreek]

I can share with all here with good authority that the ACH reference by the OP is the ACH for US Banks, and, federally (US) charted banks of foreign banks.

The plumbing for NT to pay you would be ...
1 - NT instructs it's bank to pay your bank (for your benefit).
2 - NT's bank would tell it's correspondent bank (a US federally chartered bank) to pay your bank (for your benefit; assuming your bank is not NT's correspondent bank).
3 - NT's bank US correspondent would then use ACH to send money to your bank (for your benefit).
4 - your bank would credit your account.

So ... I think the OP has it wrong.
NT doesn't have access to ACH anyway - only their banks US correspondent does.

ACH has nothing to do with payments between non-US banking accounts.

[AceCR9]

what I'm wondering is how did they not anticipate this?

or do they just not care?

[Clownfish]

I agree with Jacob and what I was trying to explain is if their US correspondent bank has shut off Neteller, they can not fund US bank accounts until they can find a new sponsor bank which I can't see any bank willing to take on that much risk for almost zero revenue.

[DVO]

Not sure abouth the ACH comments, but I 100% agree regarding the liquidity issue. That is a huge issue here.

[Clownfish]

Although all of this has been posted already, the problem they are most likely having is with NACHA. This is the American regulating body regarding ACH. I work for a company that does provide this service. Recently, we have been opening bank accounts in other states due to some regulatory issues. Surprisingly, few banks would sign an agreement which is required to ACH funds from someones checking account. The reason was simple, they are "on the hook" for 3 days worth of payments should the company decide to steal the funds. While we are much smaller than Neteller, it is not uncommon for us to pull close to a million in a day. Without a sponsor bank, the ACH option is not open to Neteller.

They could wire funds to everyones accounts. This goes through a different set of protocols. The problem with wires is they are REALLY expensive. For us to wire funds from one of our accounts to the other is $25 per wire. We have been working with the banks and hope to get this closer to $10 per wire but, this would be very expensive for Neteller.

The simplest form would be sending paper checks to everyone. At first, I was surprised that they haven't started to do this as it is inexpensive and would at least show some progress. The only problem that I see here is the volume of payments that they may be faced with. If your company does not normally send extremely large volumes of checks, I would think it could take you a couple of weeks to get everything necessary to print the checks (normal check stock turn around is 10 business days for us). Obviously you can do rush orders on the checks but, you still need printing and mailing capabilities. If you are accustomed to sending 100-200 checks per day, trying to send 10,000 a day can cause some logistical problems.

I would be much happier if Neteller explained why they are not able to process any payments right now. I understand they may have been caught slightly off guard but, they had to know this day was coming and should have been prepared. Unfortunately, we may never know what is going on. From what I understand, the Customer Service is just a call center. Our company uses 2 separate call centers and if you know how they work, you understand why they give seemingly conflicting answers. The rep that you are talking to just took orders for Oxi-Clean and Hercules hooks just before you called. They are looking at a screen with a script and a few rebutals to the questions that Neteller expects you to ask. Anything off the script and they are trying to improvise. Call centers work fine under normal conditions but, they are not part of the company and really have no clue what is going on.

[JPFisher55]

The NACHA governs ACH's for US banks. Neteller does business with foreign banks whose ACHs are governed by foreign regulatory entities not the NACHA. Also, if Neteller holds short term bonds, they may not want to liquidate them before maturity. Doing so costs money in commissions, lost interest and maybe sales price.