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The article characterized healthcare as an anticipated future front, but US insurers have been required to offer ACH payments since 2014. https://www.cms.gov/Regulations-and-Guidance/Administrative-...
Does ACH cost? I know in the UK we have faster payments, it usually shows up a few seconds later in the target account, and it's free. I've mostly stopped using paypal as a result.
ACH transfers are not same day by default, and definitely not near-instant. However some of the consumer visible services offer immediate delivery, while still using normal "slow" ACH in the backend. Typically this is done via another network that verifies that the funds are available, and that the ACH transaction has been submitted. If both are verified, the receiving institution can be fairly confident they will get the money, and will make it available immediately.
For more immediate and irrevocable transfers, wire transfers are used. The Fedwire system for example, allows banks to directly transfer funds from their Federal Reserve deposits to each other. The sending bank ensures that the sender has the available money and debits it, while the receiver bank gets notice from the federal reserve that the transfer is complete and credits the receiver account. Obviously the banks can also use this system to directly settle any debt that they owe to the other bank, since federal reserve balances are legally equivalent to cash in the vault.
The US does not have any system quite like the UK's faster payments system. In the US there is basically an unwritten rule that no consumer should ever actually see the account number of a company or other consumer except when printed on a physical paper check.
So the closest we've gotten to the faster payments system is the Zelle payment network, which unlike Paypal or Venmo is a service offer directly by the bank, but abstracts away account numbers by using phone number or email addresses. Zelle does offer immediate settlement from the consumer's perspective. This system is far from universally implemented right now, and still only works for consumer to consumer payments.
For bank's billpay services, they end up using ACH if they have an agreement with the biller, or otherwise create and mail a physical paper check!
Basically the US payments systems are still stuck back in the 1990s.
Does ACH cost? I know in the UK we have faster payments, it usually shows up a few seconds later in the target account, and it's free. I've mostly stopped using paypal as a result.
ACH is not a service directly exposed to consumers. Instead it is the backend for a lot of other services. It backs direct deposit, paying with "electronic cheque", and most interbank-bank consumer transfers, broker-to-bank transfers, and even many service-to-consumer transfers. For example, when you withdraw money from paypal in the US, it would normally be via an ACH transfer to your bank account. ACH transfers are…
I was listening to a podcast a few weeks ago (Planet Money) and was genuinlely shocked at how poor the US payments network is in relation to here in the UK. Most bank transactions here complete within 2 hours (faster payments service) and are completely free.
The US Federal Reserve is currently trying to work towards faster payments - and seems to want to let private industry solve the problem. It really is terrible though and has been for a long time.
I was listening to a podcast a few weeks ago (Planet Money) and was genuinlely shocked at how poor the US payments network is in relation to here in the UK. Most bank transactions here complete within 2 hours (faster payments service) and are completely free.
The US Federal Reserve is currently trying to work towards faster payments - and seems to want to let private industry solve the problem. It really is terrible though and has been for a long time.
The point of change in EU was legally mandated changes (PSD) which (after a transition period, something like 2 years maybe?) essentially required banks to deliver payments within a certain time or compensate the payer for any losses/costs caused by the delay, at which point suddenly the private industry managed to quickly solve all the technical and organizational problems that were impossible before.
If anyone's interested in beta testing an app for easily viewing/editing fixed length files (ACH format files) shoot me an email.
I seem to remember reading somewhere the transport channel used to be nightly FTP of these files in a cron job. Is that still true, and if so, how do they manage to secure something like that?
If anyone's interested in beta testing an app for easily viewing/editing fixed length files (ACH format files) shoot me an email.
I seem to remember reading somewhere the transport channel used to be nightly FTP of these files in a cron job. Is that still true, and if so, how do they manage to secure something like that?
I joked that it was originally designed for delivery by telegraph. I'm still not convinced I was wrong.
Earlier quoted context omitted.
I seem to remember reading somewhere the transport channel used to be nightly FTP of these files in a cron job. Is that still true, and if so, how do they manage to secure something like that?
SFTP - I can't say what's happening today, but 8 years ago this was the only channel available when I added an ACH payment system to B2B accounting system. 80 column text files SFTP'd overnight to the company's bank. I also had a couple of 200 page dead tree books on my desk describing the process & formats. I joked that it was originally designed for delivery by telegraph. I'm still not convinced I was wrong.