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Old 6th January 2005, 11:43   #1
Join Date: Mar 2003
Posts: 126
Default Standing Orders for Non-UK bank a/c holders

Is there any plans to enable MUST members who do not have a UK bank a/c, (i.e. do not live in the UK), to be able to avail of a Standing Order arrangement to efficiently and regularly make deposits to the Phoenix Fund?
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Old 6th January 2005, 14:21   #2

J.D.'s Avatar
Join Date: Jan 2004
Posts: 11,524

Good question.

If you think about it, there are three parts to a DOMESTIC financial transaction. The sending part (your bank scheduling your funds to go OUT), the transmission part (your bank having a conduit to send the money and then executing the transaction) and the receiving part of it (your funds coming IN to SU's bank.

The issue is the transmission part, the electronic funds transfer. In the US we have the Automated Clearing House (ACH), which is an association of providers and industry reps and our central bank (the Federal Reserve) which makes all this happen. It's probably the same in most countries with reasonable banking systems.

In an INTERNATIONAL transaction you add another part of the transaction, namely the part where the money makes it overseas. Institutions who perform the cross-border transaction are called gateway organisations. The foreign exchange conversion happens here.

So in order to execute an overseas transaction you need to live in a country that has a central bank who will settle the payment and that also has relationships with gateway organisations.

I know from my research that between the US and Canada for example, one of our 12 Federal Reserve branches (specifically the one in Minneapolis) works with Toronto-DOminion bank to form the cross border gateway. THis gateway doesn't exist for US -> Europe yet. Not sure about other countries.

More reading info:

there's a good picture in here (pages 4 & 5):

also more info here, at least insofar as the US FRB is concerned...

-- JD

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