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I might be able to shed some light here as my Best man at my wedding was married to a banker at XXXX bank. I had actually asked her once this exact same thing and this is the information that I received:
Current electronic funds are processed as they arrive at the bank for demand of payment, This does NOT mean that when you swipe your card at a store, that the funds are withdrawn immediately. When you swipe your card, the store computer asks your bank, "does acct 12345 have $2.35 available at this time?" You have $10 in the account "Physically" so the bank says "yes". The store then accepts "payment" and gives you your pizza. At the end of the processing day, the pizza store will "batch" their system. This means taking all charges processed, and sends it to the STORE'S bank. Then, based on THAT bank's policy, it will send out a request for payment to YOUR bank, where the money actually transfers "physical" locations....
Now when you do an ATM withdraw, things are different. Those are direct bank-to-bank transfers, and are processed immediately.
So lets use your time line to see what came about....
Primary Account has $10.00 in it at 8:00 AM after all purchases have posted.
1:32 PM - $1.16 Double cheese Burger
1:54 PM - $1.00 Soda at vending machine
2:47 PM - $2.35 Pizza
3:32 PM - $1:00 Another soda
4:08 PM - $7:00 Withdrawn from ATM machine.
The first transaction goes into the store batch to be processed at end-of-day $1.16
The second transaction goes into the store batch to be processed at end-of-day $1.00
The third transaction goes into the store batch to be processed at end-of-day $2.35
The fourth transaction goes into the store batch to be processed at end-of-day $1.00
The fifth transaction is immediately processed
end of day account balance : $3.00
beginning of day 2, batches are processed and directed to their banks, now this next part will be random, as each bank processes things at different times. Some banks process at midnight, others wait until 9 am, and even others process batches at noon.
balance $3.00
2nd trans $1.00 reaches your account:
balance $2.00
4th trans $1.00 reaches your account:
balance $1.00
3rd trans $2.35 reaches your account:
balance -$1.35
overdraft fee applied of $35.00
balance -$36.35
1st trans $1.16 reaches your account:
balance -$37.51
overdraft fee applied of $35.00
balance -$72.51
Now can you see how you can get a double penalty? While I agree that it sucks, it is NOT up to your bank to make sure that money requests are immediately paid, and that they follow a time stamp. For instance if you wanted to buy say concert tickets, and you put them on reservation, the ticket selling entity will query your account to see if the funds are available at time of reservation, but they do not charge your account until you actually PURCHASE said tickets. Otherwise if you were shopping around for a few things, your account funds could be frozen by just checking a few things while you shop around. THAT is why your bank does not actually transfer the funds until another BANK institute requests them, and THAT is how the bank card companies(i.e. Visa and MC bank cards) can protect you from fraud.
I hope this helps explain things better.
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"It is not that I have failed, but that I have found 10,000 ways that it DOESN'T work!" --Thomas Edison
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