
Same day ACH: moving payments faster in the USA - fanf2
https://www.nacha.org/rules/same-day-ach-moving-payments-faster-phase-2
======
rsync
From the article, when I searched for "holiday":

"NACHA projects that ACH Originators would generate approximately 1.4 billion
same-day ACH payments annually as of ten years after full implementation and
rollout, primarily for transactions that can be initiated before 2:45 PM ET on
business days (not on weekends or holidays), and that do not require real-time
functionality."

So you'll still have to deal with the absurd notion of holidays and weekends
when working with bank transfers.

What we need is instant clearing, 24/7/365\. Nobody cares that it's Sunday.
Nobody cares that it's Presidents Day.

~~~
pbreit
The fact that HNers are so adamant that payments should happen faster displays
a complete lack of understanding of user needs. In fact inter-bank transfers
in the US via ACH have worked just fine for many decades.

Further, the US is one of the only countries where you can pull funds from a
bank account.

~~~
seanp2k2
Yeah, amazing how the public routing number and secret can be used to empty an
account without any further auth.

We need to end this madness. I was hopeful for chip&PIN but we just got
chip&recurring transaction fraud. Places don't even try to check your ID, but
now the card verification takes at least 4x as long without any additional
meaningful security factors. As someone who has had cards stolen from their
mailbox and activated + used, this is frustrating to say the least.

~~~
johncolanduoni
The majority of fraud is via counterfeit cards (which chip is effective
against), not stolen cards. Most of the US credit card industry decided that
they'd lose more by being the "difficult card" in your wallet than those
transactions cost them. They're not just lazy or incompetent.

------
Falkon1313
As described at [http://engineering.gusto.com/how-ach-works-a-developer-
persp...](http://engineering.gusto.com/how-ach-works-a-developer-perspective-
part-3/) , ACH has called itself a 'next-day' settlement system yet funds
transferred on a Thursday may not be available until the next Wednesday (6
days later) since they leave several days of buffer in case of returns and do
not count weekends or holidays. And that's only if the transfer is done early
in the day. If it's the evening, it could take 7 days.

Unless they changed something else, changing from so-called 'next-day' to
'same-day' would only reduce that by 1 day from 6 or 7 days to 5 or 6 days,
which isn't really that significant and certainly isn't what people think of
when they see 'same-day'.

It says "for transactions that can be initiated before 2:45 PM ET on business
days (not on weekends or holidays)" so it's still broken with several days of
delay, but there is a line that says "RDFIs will be mandated to make funds
available from same day ACH credits (such as payroll Direct Deposits) to their
depositors by 5:00 PM at the RDFI's local time." Does that require them to
drop the return buffer? That could at least cut it down to only 2 or 3 days
delay.

If it does cut the delay in half, that's a mixed blessing since it reduces the
pressure to develop a better protocol or even change ACH implementations to
reduce the delay to a few minutes. It's just a series of 3 requests and 3
responses - even with processing, that shouldn't take more than a few minutes.

And if they added an extension for the receiving institution to confirm
success in the return file (or another file), everyone involved would be
better off (except the bankers making interest while the money sits in limbo,
I guess).

~~~
tome
> bankers making interest while the money sits in limbo, I guess

This is a common refrain. Has anyone ever actually done a calculation to show
that it's a significant amount, at least enough to disincentivise building a
quicker payments system?

~~~
maccard
[https://www.nacha.org/news/ach-volume-grows-
more-25-billion-...](https://www.nacha.org/news/ach-volume-grows-
more-25-billion-payments-and-43-trillion-value-2016) says 43 trillion usd was
transferred using ach. With 365 days a year, that's 100 million a day, and 5%
would be an extra 5 million a year... seems pretty worthwhile to me!

~~~
soVeryTired
Divided across an industry the size of the US banking system it's not that
much.

------
wtmt
Living in India, this has always stuck me as very odd with the U.S. that there
are no quick ways to transfer money between bank accounts. In India, payments
have long been done in hourly batches six days a week (with time limits) in a
system called NEFT (National Electronic Funds Transfer) and for higher
amounts, an almost real time system called RTGS (Real Time Gross Settlement).

A few years ago, a consortium of private and public entities setup IMPS
(Immediate Payment Service) that allowed instant payments (just a few seconds)
24x7 with a cell phone number and a bank provided ID (called MMID). Then came
UPI (Unified Payments Interface), which improved on this and provided for user
chosen IDs (like name@bank) as an easier way to exchange information and
transact. In both cases, there's no need to reveal the underlying bank account
number, branch and other details. The latter two systems have been criticized
for how they work (mainly that they don't maintain audit trails and that they
could be used to launder money).

It's good to see the U.S. system improving, but this needs to get a lot better
to be comparative to other places.

------
aioprisan
I can't believe how behind the US still is compared to the rest of the world..

~~~
magila
You can come up with all sorts of proximal causes for the current situation,
but once all the bs excuses are stripped away it really comes down to plain
old corruption.

Banks collude with their regulators to both minimize required changes to the
system and make it effectively illegal to create a competing system. Without
pressure from regulators or markets, banks can rest on their laurels while
doing just enough to avoid public outrage over their level of dysfunction.

~~~
zkms
There's a _lot_ of money to be made with overdraft fees and offering pseudo-
banking services (cheque cashing places, refillable debit cards that can be
ACH-deposited into) to the unbanked, so US banks have a very strong incentive
to keep their consumer-facing offerings slow and sucky.

------
xatnys
Most major US banks currently support instant transactions up to a certain
amount.

Check if your bank has an equivalent Zelle client; it's usually built into
your banking frontend as a transfer or send money feature.

Other banks are also supported, but you'd have to register through the
clearXchange network until your bank builds support directly.

~~~
patio11
I used this recently to send my little brother a wedding present. The UX was
pretty poor from his side for enrollment, but after that was done the transfer
was instant as advertised.

------
0003
>Only international transactions (IATs) and high-value transactions above
$25,000 are not eligible.

The $25,000 limit makes this useless for business.

~~~
patio11
I wouldn't be so sure about that. Businesses have call to send _many_ payments
(and many types of payments); the overwhelming majority by count are below
$25k. Since nothing about existing ACH or wires is going away as a result of
this system, it's a pure win.

~~~
tim333
Yeah, the international stuff and >$25k will tend to go by SWIFT wire transfer
anyway

------
alkonaut
This is revolutionary. What's next, US human operated telephone switchboards
to be replaced by electronic switches? /s

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h43k3r
India has Immediate Payment Service ( IMPS ) which allows instant transfer.
It's great for most of the transfers and works 365/24/7

[https://en.wikipedia.org/wiki/Immediate_Payment_Service](https://en.wikipedia.org/wiki/Immediate_Payment_Service)

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em3rgent0rdr
The bitcoin threat is a motivator for these legacy systems to get up to speed.
Even if bitcoin ends up not being universally used, I'd still consider it a
success for causing this.

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MiddleEndian
It's a sadistic joke that it's so hard to transfer money from one person to
another (at least here in the US). The fact that it even takes more than an
hour is absurd.

~~~
rjeli
It's incredibly easy to transfer money. I and all my friends use Venmo.
Settling the tab, paying rent, utilities, in a few seconds. It works extremely
well for me.

~~~
volkl48
Venmo isn't any more instant. If you want to actually have money back in your
bank account rather than a balance in Venmo, it takes 2-3 business days.

~~~
chairmanwow
In China with Alipay, I receive transfers instantly and deposits to my bank
account "can take up to 2 hours", but typically land within 5 minutes. I get
instant WeChat notifications whenever my card is used. Although, to be honest
I haven't used a physical card in months. I pay for everything with QR codes.
There's a code you can present to the attendant and they scan you (typically
faster) and then I authenticate the transfer with a fingerprint or pin. It's
honestly astounding to see how advanced the financial system is here,
ESPECIALLY when compared to the bullshit that currently exists in the US.

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ppurka
Singapore has this thing called FAST transfers (Fast and Secure Transfer)
that's instant transfer between the banks here. It's been around since 2014.

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hbcondo714
So what exactly makes this same day? Is it because there will be "two
additional clearing windows"?

~~~
jameshart
They now Uber the check from one bank to the other, instead of the previous
mechanism of sending it via pony express.

~~~
wmf
Thanks to truncation, the pony express was replaced with faxes a few years
ago.

------
apple4ever
If only we had some sort of electronic system that can make instant data
checks and updates...

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pbrb
Same day??? Check out Ripple... 2 seconds, from anywhere in the world.

~~~
brucephillips
Or, you know, Paypal.

~~~
pbrb
Paypal has nothing to do with ACH or cash settlement. Totally different.

~~~
QML
When you withdrawal from PayPal (or at least Venmo), doesn't it go through an
ACH?

~~~
wmf
Which is why PayPal can't be faster than ACH.

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exabrial
Why can't we have continuous... I don't understand!

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horsecaptin
Bitcoin is putting pressure on banks to wise up.

~~~
__s
Too little too late

------
jobeirne
It's called Bitcoin.

