What Happens When You ACH a Dead Person? • Hacker News Board

Re: What Happens When You ACH a Dead Person?

#21

Post by designium » Wed, Aug 28, 2019, 6:28 PM UTC

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…

ACH transfer itself is charged by batches from the banks like BofA. As an example, they might charge $5 for each NACHA file transfer but you can have hundreds or even thousand transactions of many different types. From that perspective of cost per value transfer, it is going to be cheaper if you have a lot of transaction with higher dollar amounts.

But the total cost of ownership is expensive. I mean the time and money to develop the process to integrate with your bank on ACH is going to be a heavy fixed cost and that is one of the reasons of the cost. Now Wire transfer and other type of transfers, they use different system and the costs varies because of that.

Also regarding about the speed of transfer, that is hinging at the speed for the banks to reconcile all transactions with the Central Bank. I think the US Central Bank is planning to implement real time transaction and that consequently will speed up transfer.

Re: What Happens When You ACH a Dead Person?

#22

Post by fernandotakai » Wed, Aug 28, 2019, 6:29 PM UTC

lettergram wrote: post #19

grecy wrote: post #15

Earlier quoted context omitted.

Moving from Australia to Canada/US felt like going back in time 20 years when it came to banking. Even ten years ago in Australia I could do more with my online banking than I can today in North America. Checks are for what now?

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.

i've never used a check in my entire life. when i need to pay someone i just do an online transfer.

Re: What Happens When You ACH a Dead Person?

#23

Post by jedberg » Wed, Aug 28, 2019, 6:29 PM UTC

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…

The short answer is "because they can". The longer answer is because banking in the US is not as sophisticated as Europe since we have many fewer banks. The few banks we have have decided it isn't worth trying to compete on convince, so they haven't bothered to update the technology to be synchronous instead of asynchronous. In Europe, there are many banks in many countries, so they had to standardize quicker.

FWIW in the US the banks are starting to play nice. They came up with Zelle, which is basically a federated payment processing system amongst the biggest banks to compete with PayPal/Venmo. You can instantly (almost, five minutes delay usually) send money to someone at another bank. The downside is that it is limited. Each bank has different rules, but it's usually just a few thousand a week. For example Bay Area rent can't be paid with Zelle.

Re: What Happens When You ACH a Dead Person?

#24

Post by loeber » Wed, Aug 28, 2019, 6:29 PM UTC

lettergram wrote: post #19

grecy wrote: post #15

Earlier quoted context omitted.

Moving from Australia to Canada/US felt like going back in time 20 years when it came to banking. Even ten years ago in Australia I could do more with my online banking than I can today in North America. Checks are for what now?

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.

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...

Re: What Happens When You ACH a Dead Person?

#25

Post by kolinko » Wed, Aug 28, 2019, 6:31 PM UTC

lettergram wrote: post #19

grecy wrote: post #15

Earlier quoted context omitted.

Moving from Australia to Canada/US felt like going back in time 20 years when it came to banking. Even ten years ago in Australia I could do more with my online banking than I can today in North America. Checks are for what now?

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.

That’s what wire transfers are for in EU. Same day/instant, either free or with a flat fee of $0.25-0.5.

In Poland if you’re going out with friends and someone paid for you bc you forgot a card, you just wire them money from your phone.

For my whole adult life (36 yo) I only used and saw an actual check once. Wire transfers since I can remember.

Re: What Happens When You ACH a Dead Person?

#26

Post by itcrowd » Wed, Aug 28, 2019, 6:31 PM UTC

lettergram wrote: post #19

grecy wrote: post #15

Earlier quoted context omitted.

Moving from Australia to Canada/US felt like going back in time 20 years when it came to banking. Even ten years ago in Australia I could do more with my online banking than I can today in North America. Checks are for what now?

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.

> Every other form of payment online is “pull"

Sorry, but if I transfer funds to a friend from my banking app, how is that "pull"? If I send you money with PayPal, that's not "pull". If we settle our debt using e.g. TransferWise, that's not "pull"..? I don't get your point. There are plenty of "push" methods.

Re: What Happens When You ACH a Dead Person?

#27

Post by mantasm » Wed, Aug 28, 2019, 6:31 PM UTC

lettergram wrote: post #19

grecy wrote: post #15

Earlier quoted context omitted.

Moving from Australia to Canada/US felt like going back in time 20 years when it came to banking. Even ten years ago in Australia I could do more with my online banking than I can today in North America. Checks are for what now?

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.

The numbers at the bottom of the check are all that someone needs to initiate an ACH transfer out of your account!

Re: What Happens When You ACH a Dead Person?

#28

Post by mattmarcus » Wed, Aug 28, 2019, 6:32 PM UTC

ergothus wrote: post #16

Perhaps those well-versed in such arts can inform me, who knows little about ACH and the rest: Why is it so slow? I get that this is a system that can work built on top of any number of manual processes, but check-cashing scams are rampant and function in world where a major bank gets a check (apparently) from a different major bank and the customer is told it is all good....and possibly weeks later the check is note…

Hey there - author of the article here.

Like some of the other comments said, ACH payments are handled by a middle man(The Clearing House/FedACH). In terms of speed, this is what their current guidance is:

"Specifically, the Nacha Operating Rules require that ACH credits settle in one to two business days and ACH debits settle on the next business day. Recent enhancements to the Nacha Operating Rules now enable same-day settlement of virtually all ACH transactions."

(https://www.nacha.org/news/what-ach-quick-facts-about-automa...)

For what you're asking about with check reversals, there are protections that let you challenge payments after they have "cleared". ACH payments from individuals can be challenged for up to 60 days and for businesses, up to 3 days (although sometimes banks will let you do it beyond that window).

ACH is built to be reversible. If you want avoid that, you can use wires or (soon) RTP.

Re: What Happens When You ACH a Dead Person?

#29

Post by saarons » Wed, Aug 28, 2019, 6:32 PM UTC

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…

CTO of Modern Treasury here. Banks are actually starting to setup a new payment system between themselves called Real-Time Payments (RTP) which has a lot of the same benefits as wire transfers. RTP is 24/7, instant, and (from our experience) much cheaper than wire transfers. It's starting to roll-out across more banks and currently ~50% of bank accounts can receive RTP transfers [1]. I just cashed out on Venmo the other day and their instant transfers are going over the RTP system. Other than coverage not being complete, one of the main downsides is the $25,000 cap which means that for higher dollar volumes people will likely choose a wire. If you're sending $1mil, then the $35 wire fee doesn't seem like so much in comparison.

[1] https://www.theclearinghouse.org/payment-systems/rtp/institu...

Re: What Happens When You ACH a Dead Person?

#30

Post by asadlionpk » Wed, Aug 28, 2019, 6:32 PM UTC

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…

I was confused at how bad this is in the US compared to where I come from (Pakistan). I have to rely on Paypal and Venmo because the online banking is so backwards here.