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What Happens When You ACH a Dead Person?

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Re: What Happens When You ACH a Dead Person?

#131

Post by falsedan »

ThrustVectoring wrote: post #72
itcrowd wrote: post #12

This reminds me of a question I've had for the longest time (+): why is it that in the US wiring money between accounts is so expensive or difficult? Whole ecosystems of companies have sprung up (PayPal and Stripe come to mind, and apps such as TransferWise) to reduce the friction when the banks could easily set up a way cheaper system that would actually be better (privacy etc.) for the consumer. The EU seems to be…

A partial answer is also the US's approach to banking regulation. First off, the US prioritizes having many small community banks. The US has 4,909 banks, while Japan has 198. This necessarily makes setting up inter-operation between banks more complicated. Second, US banks are regulated on both a Federal and State level. A system that works for a bunch of banks in California may not be viable for interoperation with…

> This necessarily makes setting up inter-operation between banks more complicated.

Technically this is true but the clearing houses were set up a long time ago to solve this problem and they work fine

Re: What Happens When You ACH a Dead Person?

#132

Post by pbreit »

kevin_thibedeau wrote: post #127
pbreit wrote: post #94

Earlier quoted context omitted.

Businesses use ACH extensively to pay each other same-day (and debit consumer bank accounts). But it has never caught on for consumer "push" payments.

For the better since ACH is woefully insecure.

Secure enough to process $50 trillion in 2018.

Re: What Happens When You ACH a Dead Person?

#133

Post by TylerE »

emiliobumachar wrote: post #129
loeber wrote: post #24

Earlier quoted context omitted.

That's not actually correct. By giving an external person a check, you give them the ABILITY to PULL funds from you. It looks like a push, but it's actually not. https://www.bankrate.com/financing/banking/writing-checks-in...

They probably meant a fire-and-forget method to pay untrusted parties without giving them the ability to charge more than agreed. Chargebacks are a thing, but they require constant vigilance and the occasional bureaucratic task.

Checks have substantially less security there. Not more - and even if/when it gets fixed the money comes out immediately.

Re: What Happens When You ACH a Dead Person?

#134

Post by iagovar »

anonymouz wrote: post #105
wereHamster wrote: post #31

Earlier quoted context omitted.

> Every other form of payment online is “pull”, […] Wat? When I transfer money to another account via my bank's ebanking app that is very much "push". The transfer is executed either immediately or at the end of the business day. Nobody is pulling anything.

I assume you live in the EU (or somewhere else outside the US), where it is the most natural thing to just send money from your account to another one. This simply isn't a thing in the US, as I discovered when moving to there for a time. They use third-party apps, cheques, and wire transfers (which are expensive and seem to work via ACH, a pull type system). It's simply not possible to go into your ebanking app and t…

But why? It just doesn't make sense to not have a push system. I, honestly, don't get it.

Re: What Happens When You ACH a Dead Person?

#135

Post by falsedan »

emiliobumachar wrote: post #126
lettergram wrote: post #19

Earlier quoted context omitted.

I use checks all the time actually. Every other form of payment online is “pull”, I only want to “push” my funds to external people.

Sorry if I'm out-of-date, but how do checks work online?

Like, to pay for something remotely? I’ve emailed a picture of the check to sellers who refuse to use PayPal and then they use their bank’s online deposit system to drop it into their account (a couple of times for second-hand board games).

Re: What Happens When You ACH a Dead Person?

#136

Post by falsedan »

tialaramex wrote: post #128
Symbiote wrote: post #118

Earlier quoted context omitted.

I'm guessing, but I think most people probably give the electric company permission to pull the money from their account (direct debit) rather than reviewing the bill and "pushing" the money every time. There are very strong guarantees in the individual's favour if the company makes a mistake.

Although, you need your bank to actually fulfil the guarantee, depending on how terrible your bank's customer service is, this may be a lot of trouble. I've actually done this (use the DD Guarantee to unwind bill payments I didn't want paid) with my good bank and it was a pleasure, no trouble at all. But I can imagine that a bank with bad customer service is going to make it a nightmare that will suck up hours of you…

I doubt it, they might lose their banking license over it.

SEPA direct debits allows for R-transactions to unwind a collection up to 13 months after execution, no questions asked, it’s wild.

Re: What Happens When You ACH a Dead Person?

#137

Post by mindslight »

Symbiote wrote: post #120
mindslight wrote: post #54

Earlier quoted context omitted.

> ...why can't the big players (at least) confirm things quickly? Why can't there be an easy status to say if a check has truly "cleared" or not? Consider a forged check with valid identifying information. Think about what the other side of that transaction looks like. That other customer needs time to review incoming transactions to their account, notice the errant one, and dispute it. And so waiting this time is th…

Does that mean Americans check their account every day or two? I probably read my statements (online only) about every two months...

The timeframe is much longer - 60 days AFAIK. So essentially you verify every statement, or verify the online transactions every month and a half.

Even with the smaller attack surface of a banking system based on only "pushing" money, surely other countries must have analogous timeframes for reporting unauthorized transactions (eg from an authorized login).

Re: What Happens When You ACH a Dead Person?

#138

Post by edubs25 »

pbreit wrote: post #110
edubs25 wrote: post #67

Earlier quoted context omitted.

Snarky answer - there's no real motivation to change it and from an institutional perspective it's not broken. - it costs a lot to fix or redesign a money system moving billions of dollars in volume per day - change is risky - any impacts on reliability would be unacceptable and have significant economic impact [both direct and indirect] - stakeholders that fully understand the existing system and have the knowledge…

The biggest reason is that fast money is almost never needed, and usually indicative of a problem.

Yeah, the only good use cases I heard for wanting real time payments had to do with businesses not wanting to keep cash reserves on site at all times. The two I recall were

(1) in businesses that have variable payment demand (think scrap yards that buy scrap material from anyone that walks up) and they currently handle this by keeping large amounts of cash on site in a safe

(2) some states where when a hourly employee is terminated, due to regulations it's easiest to pay them out for hours worked on the spot and this is currently usually handled in cash that's kept in a safe on site

I might be forgetting some details on the whys but it seemed like they wanted a way to avoid having to secure cash funds.

Re: What Happens When You ACH a Dead Person?

#140

Post by falsedan »

mynameisvlad wrote: post #119
C14L wrote: post #14

Earlier quoted context omitted.

Probably the US version of European SEPA.

That's not quite right. An automated clearing house for transactions isn't a US-specific concept, it's used all over the world (sometimes called an ACH, sometimes under a different name). SEPA uses STEP2 as the pan-European clearing house. Each European country also has their own equivalent to the ACH. From https://en.wikipedia.org/wiki/Automated_clearing_house , Germany's seems to be a service offered by the Bundesb…

In the context of the title though, ACH =~ SEPA
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