
What Happens When You ACH a Dead Person? - saarons
https://www.moderntreasury.com/journal/what-happens-when-you-ach-a-dead-person
======
itcrowd
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 much better at this .. ?

(+) Partial answer found here, but not satisfying
[https://money.stackexchange.com/questions/27474/why-are-
wire...](https://money.stackexchange.com/questions/27474/why-are-wire-
transfers-and-other-financial-services-in-canada-so-much-more-expen)

~~~
saarons
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...](https://www.theclearinghouse.org/payment-
systems/rtp/institution)

~~~
itcrowd
Thank you for the RTP information! Had not heard of it yet. The fees look very
reasonable ($0.01-$0.045 depending on type of transaction) and they provide a
level playing field (flat-fee, no discounts for volume)

I also heard someone say at some point that Americans are very wary of having
people transfer money to their bank account. Not sure what the rationale is
(maybe taxes or afraid of criminal money?) but I was wondering if you have
heard this and if so, whether RTP has some protections or safeguards against
this?

~~~
Freak_NL
You can't transfer money between banks in US Dollars within the US for free?

We really are blessed with SEPA¹.

Still, a few cents sounds at least reasonable.

1:
[https://en.wikipedia.org/wiki/Single_Euro_Payments_Area](https://en.wikipedia.org/wiki/Single_Euro_Payments_Area)

~~~
mynameisvlad
Most times, the financial institution will eat the ACH fee, so to the customer
it looks like it's free.

SEPA also doesn't mean that the transactions are free, either. According to a
third party transfer service ([https://transferwise.com/help/15/paying-for-
your-transfer/29...](https://transferwise.com/help/15/paying-for-your-
transfer/2956754/what-are-sepa-transfers)) there might still be some fees from
banks.

~~~
zaarn
If you do commercial SEPA Transfers, yes there are fees. If you only do push
transactions (ie, customers sends SEPA transaction to you), it's largely
account management fees.

The pull transaction (SEPA Debit) isn't free, you can buy transaction packets
(usually around 5-15€ per 1000 transactions) as well as paying a fee on
monthly cash inflow (usually around 0.1-0.3%). Honestly, it's peanuts.

------
teilo
Ah, NACHA, oh how I hate thee.

If only NACHA files _were_ JSON as shown in the example in the article.

I wrote a NACHA processor in MS Access many years ago for a client in the
insurance industry. That thing is _still_ being used. God, I wish it would
die. Although, I'm not sure which is worse: Parsing and generating the NACHA
record format, or trying to parse and generate JSON in VBA.

Why MS Access? Their entire claims processing system (which I did not write)
ran on it. I only _just_ got that damn thing migrated to an MSSQL backend. The
pain.

~~~
__s
My previous job involved MS Access for insurance too, this in Canada. We got
them to use SQL Server as a backend for most of the databases at least, so I
could build infrastructure for reporting off the SQL. But all the data entry &
quite a few reports were built into Access UIs. Quite a few places where we
had to shunt table valued functions into Access to output into Excel

------
s9w
Neither the title of this post nor the article explains what ACH is. And it
somehow got 15 points in 6 minutes or so. Am I missing something?

edit: yes, downvote me to -3. I love you all

~~~
teraflop
Also currently on the front page:

* An article about a null-pointer bug in GCC that doesn't explain what pointers are

* An article about Stripe that doesn't explain what Stripe is or does

* An article about the programming language Julia that doesn't explain what Julia is.

I think it's your expectations that are out of whack. Not every article needs
to explain everything as if the reader is completely unfamiliar with the topic
being discussed.

~~~
munk-a
The article on the null-pointer bug goes into technical details about what the
exposed error case is - the fact that it's a bug is made super clear - the
fact that it's a logic bug is pretty readily apparent.

The Stripe article starts with "I worked at Stripe for 3+ years" so Stripe is
clearly a company, the article itself is focused on the operations & team
cohesion side of stripe not on their line of business.

The article about Julia is hosted on `julialang` and within the first
paragraph there is a sentence containing: "So I thought it might be helpful to
the broader Julia community—and maybe even for other programming language
communities—to actually write down Julia’s release process"

None of these articles give you a full and complete comprehension of their
topics - walking away from Strip I don't know if they're a listed company or
what their market cap is - but I was given enough information to make it
through.

ACH is not a common jargon term, and even with common jargon there usually is
some explanation, if someone writes a well-written article about some MySQL
quirk, it'll probably have the term "SQL" somewhere in the first paragraph and
it'll certainly have the term "database" and "query" \- those hints are enough
to grasp the general subject matter. The word "bank" doesn't show up in the
article until paragraph three and the jokey description of doing it to "a dead
person" immediately derails the users ability to grasp that it's a monetary
transaction - it's perfectly logical that monetary transactions need to have
error handling around dead, missing and not-yet-existing people, but leading
with that point harms readability.

I think this article is a great example of a poorly written piece that with
some very minor edits to clearly define the scope of the article would be a
lot more legible.

~~~
baddox
> ACH is not a common jargon term

It’s not jargon at all, is it? It’s just literally the proper name for the
specific payment network. I thought jargon is industry-specific slang terms
for concepts that could otherwise be described with less industry-specific
terms. There is no simpler or clearer way I’m aware of to refer specifically
to ACH.

As for it being common, if you work as a developer on any web products that
accept or send significant payments in the US, you’ve almost certainly heard
of ACH. If you haven’t, then this article probably won’t be of any interest or
use to you even if it had an extensive introduction about what ACH is.

~~~
Animats
> ACH is not a common jargon term

It is for anyone involved with money. However, it is a noun, not a verb.

~~~
M2Ys4U
Maybe if you live in the US.

------
kyrra
As someone who has worked on integrating with BACS (UK version of ACH) they
have the have the same code.

[https://gocardless.com/direct-debit/receiving-
messages/#audd...](https://gocardless.com/direct-debit/receiving-
messages/#auddis-messages)

"2 Payer deceased You have attempted to set up a DDI on the account of someone
who is deceased. Extremely rare."

------
runako
Relevant podcast on the workings of ACH, if you're interested in something
less technical than this post:

[https://www.npr.org/sections/money/2018/01/10/576879734/epis...](https://www.npr.org/sections/money/2018/01/10/576879734/episode-489-the-
invisible-plumbing-of-our-economy)

------
killjoywashere
The Social Security Administration's Death Index and Death Master File are a
great resource. Too bad they make it such a pain to get.

The US military keeps its own death file for its beneficiary population (all
members of the military, retirees, and their dependents). I have been told
(not surprisingly) that there are disagreements between the various
authorities on who exactly is dead.

So, even if you get an R15 and the bank tells you they certified the death
against the SSA's MDF, they may only be mostly dead.

------
ergothus
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 noted as invalid and the deposit reversed.

...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?

The amount of fraud committed using this must be astronomical, based on how
many reports I see without really looking.

What is the piece I'm missing?

~~~
snoman
ACH is a file format. You generate an ACH file and then SFTP that to the
Federal Bank (or another central bank... I forget which). In simple terms, the
file contains a header and a bunch of batches. The header has the account info
whomever generated the ACH file (a bank, usually) and the records in each
batch the account info of another party.

The federal bank iterates through all of the records in the file and attempts
to perform each transaction using the pair of account info, the type of
transaction, and the details in the transaction record.

To answer the question about why it takes so long?

Generally it doesn't actually. Most companies will tell you it takes 24hrs to
send you money, and that's because most companies generate and submit an ACH
file once a day, and the federal bank will process those files at some point
after that.

Why does it take weeks for a deposit to be marked invalid and reversed? Well,
analytics, fraud detection, and those kinds of activities are not all real-
time. More than you think are actually caught _remarkably_ fast, but many take
time to find and often include collaboration with multiple banks, government
agencies, and policing organizations from multiple countries. That means geo-
political concerns, international treaties, timezones, communication problems.
You name it.

~~~
Kneecaps07
I actually had a job where part of my responsibility was processing this file.
It was literally me opening WS_FTP Pro and manually downloading and uploading
that file. It blew my mind that this was how we were doing it.

------
paule89
What is ACH?

