(+) Partial answer found here, but not satisfying https://money.stackexchange.com/questions/27474/why-are-wire...
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?
To be clear I'm not arguing that this is a good system, but as long as it is the system we have, it's wise to limit who you give your banking account information to, regardless of channel.
All it takes to extract money from my bank account is the routing and account numbers. Print a fake check with that info, take a couple crappy photos with one of those mobile deposit apps, and boom my money is gone. This happened to me just a couple years ago. The signature on the check was literally "John Hancock." Perhaps things have improved in the past couple years, but I doubt it.
As for replacement programs, I trust banks no further than I can throw them. You want me to sign up for Zelle, or whatever new money transfer program is? What's the catch? No way I'm trusting any program introduced by a bank.
We really are blessed with SEPA¹.
Still, a few cents sounds at least reasonable.
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...) there might still be some fees from banks.
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.
The EU states are (fairly) confident in their status as independent countries, and thus dare subject themselves to and implement such things as SEPA.
While the U.S. is a single country, the states within are not independent countries and, very aware of that, try to defend their independence within the union at every turn.
Anecdotally, I recently moved my banking to a discount broker and my paycheck is now credited to my account the night before. I don't know if that has anything to do with same-day ACH.
Also anecdotally, Ally takes 5 business days (!) to open a CD via ACH even for an already verified bank. Definitely faster to have a checking/savings account with them, wire in the funds, then open the CD from checking/savings which is instant.
That means for consumer accounts there's a ton more risk of things going sideways well after the money has moved on.
(Source: possibly outdated circa 2011 NACHA rules and transaction types)
In fact, I just called Citi earlier today because I’d closed a CC with them and had a credit. The CS rep asked for my routing and acct number and without even verifying it with me immediately said “you’ll see the credit in a couple days.” I asked her to verify the account number and she said “I’m sorry but the number is no longer visible to me but rest assured I sent it to the correct account.” So if those funds went somewhere else I suppose I’ll never see them?
I was also able to establish the ability to wire from my discount broker today to another checking account I have without performing any verification of the destination beyond providing the routing/acct number.
I have a feeling I actually don’t want to know how this all works...
 Contingent on the transaction going through and not being reversible, which can happen for many reasons (staleness by the time you report it, disinclination of someone who enjoys Monopoly to repay Bank Error In Your Favor, CS staff not having a button that reverses the transaction, Citi’s ops team  considering it beneath their notice, etc.)
 I oddly enough know the name of their SVP in charge of this team because Citi escheated a check due to me to the state of Illinois back in 200X. Illinois told me they had insufficient information to determine that I’m the same Patrick McKenzie so they want said SVP to file a report on my behalf. I assess 80%+ likelihood that they’ll comply. This is boring inside baseball mostly meant to underline the fact that BigBank actually does have people with names and addresses who deal individually with transactions according to some fairly involved business processes.
I hope not. You can't imagine how annoying it is to get them on the phone. Well actually, you of all people probably know exactly how annoying it is. But I'll recap it anyway. First, when you login to the web site to access your closed account to check the statement, the 1-800 number displayed is for card activation only. Go to main web site, dig up correct number. None of the usual tricks (wait in silence, try 0, try 9, ask for an operator, ask for customer service) will bypass they infernal voice response system. Even "close account" is automated now. I guess they don't care about retention.
While I'm griping, the account has been closed for more than 90 days. Are they required at any point to send me a check?
They're required to do what they promised to do in your Deposit Account Agreement and/or are required to do by state law. In some states if you take no action to recover it they will be required to "escheat" the money to the safekeeping of the state treasurer to await your eventual claim for it.
You can also easily block or reverse transfers either in general or for specific merchants including down to blocking only weekly payments under 50€ from vendor X if you want to be really specific.
How is that any indication of its security?
It’s like saying the people of North Korea believe their government is good enough to get the job done, otherwise KJU would have been displaced by now.
Some "nice" banks always do this, like USAA.
It is owned by the same company doing RTP.
Clearexchange was purchased by EWS a few years ago.
I suppose this isn't inflation indexed, so RTP will become increasingly useless over time? -- halving in 35 years per fed plans and much sooner under monetary policy twitter-proposed by the president?
I think most of the % fee-based "instant withdrawals" are done without understanding the effective APR. "It's only 1%!"
I had $2K in my Paypal account. I had about $1200 in my primary checking account. And another few Gs in savings.
I needed to pay a $2700 expense. I could have transfered from the savings, but you are restricted to the number of times per year you can do that, without penalty.
TLDR: I have no problem sacrificing $10 to get immediate access to another $2K in cash, with the thought co-resident in my mind that I do not want to incur any potential savings -> checking with-drawl penalties.
The APR in this case is meaningless to me completely. $10 for low latency access to my cash is a small price to pay, versus waiting a day or longer for slower (free) transfer methods to complete.
- 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 to redesign it are part of that system and benefit from it
- as an insider, it's hard not to make money within the system
- it's a closed ecosystem - access to the system is controlled by the established players (like Wells Fargo, BoA, Visa, Mastercard, etc.) and they will revoke access if you threaten their position.
- Insiders are making so much money at this game that end consumers have little leverage at this scale.
Paypal, stripe, venmo, zelle, square, name-your-favorite-fintech-start-up are all working within the existing system by exposing easy to use integrations and interfaces. They aren't really fixing anything, just wrapping it up, putting a bow on it and making a handful of basis points on your transactions.
The RTP system is a chance to fix it but I suspect it will take years for that to replace the existing systems. I've heard it discussed as an additional feature not a replacement.
[I know HN likes proof but any real numbers I can't disclosed due to NDAs. I'm basing my opinion on the margins I saw and heard referenced while working at a smaller financial institution]
(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.
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?
Automatically approved bills didn't get auto paid - but they appeared in the "upcoming bills" when issued, with a pay date of the due date on the bill. I could go an hit "pause" or "stop" on any bill - and it either wouldn't pay or would be removed entirely. Anything that wasn't auto-approved would start in paused mode and I'd have to manually approve it - but that was a single click.
Still, I agree that when I'm in the states it feels crazy old tech. They still require signatures on credit cards!
Now we have Osko and PayID which is immediate free payments without needing to remember bank account details. It’s neat!
For me this week: Paid for a city license, paid the cat sitter, paid for a small magazine subscription, made a charitable donation, and paid the rent.
The cat sitter and the charity were check only. No other option. The magazine has a PayPal option, but I don't trust PayPal. The city license could have been done with a card online, but I'm not interested in setting up yet another account with yet another third party to mishandle my information. Paying the rent by check is free, but paying with a credit card is a $74 fee. And this is with a very large company that almost everyone knows.
People do abandon checks when possible. But for the most part it's the businesses that put up barriers. Or, in my case, a lack of trust, which has caused me to use checks more. I like the paper trail. I check my bank statement every month and at least once a year there is an error.
I am coming around somewhat on the trust thing. If I can use a virtual credit card number, I will. But not if I have to make yet another account with yet another password and yet more gathering of information that is nobody's business.
Edit: I forgot that I also had to send a check to a county recorder out if state to file some legal documents. But that was a cashier's check, not a bank draft. Still, the only form of payment accepted by that county government is cash if you live there, or a cashier's check if you're out of state.
Also, my accountant only takes cash and checks. I consider it a virtue since it indicates that she watches every penny. But I didn't put that payment in the list because it was a couple of months ago.
When your life is simple, banking is simple. As you get older and your life becomes more complicated, banking gets more complacated.
The way the European system works is that there is one possible operation; the owner of an account can move money from their account to any other account.
If you want me to pay you rent, you provide me with a standard format bill, which includes your account number, the amount, the date to pay by, and an optional reference number (for use of the recipient to tell what I was paying for). To pay, I input those into my banking app (or more likely, read the barcode on the bill with my phone), verify that everything is correct, and press a button to transfer funds.
The point is, I don't have to trust you to do any of the banking right. I have paper trail from you in form of the bill you provided (which confirms that the numbers I used are correct), and from my bank that the transfer was initiated on a given day at a given time. There cannot be any error that I didn't make.
This isn't true at all. The direct debit system allows any participant to withdraw money from your account, providing just your account number and a claim that you authorised them to do that. You never have to directly tell the bank anything, and in many cases you can't even opt out of the process or deny access to an individual withdrawer through the bank.
The banks are meant to limit access to the direct debit program to companies they trust, and cut off access to bad actors, and make whole customers who were debited in error or by fraud. How enthusiastically they do this depends on the bank and the local regulator.
So you setup something like "account 123 can debit up to 100 EUR monthly" and the bank enforces that.
You could theorically withdraw money from an account by faking the procuration, providing you know the id details of the account owner, but you are still required to present your id card which contains a digital photo of you to prove you are who you pretent to be.
Fake id are maybe common in the us thanks to your broken SSN system but in europe, digital id cards are centralised from the moment you're registered as human being at your birth and banks have access to that system when they check your id.
Any attempts to withdraw money from your account leave a trace, and in case of fraud, you would be quickly with the cops on your trail.
The UK and Denmark don't have identity cards. At least in those countries, there is occasional fraud. The banks will fix it (at least in the case you describe), but it can happen.
Even ten years ago in Australia all of that was done through internet banking, and if I wanted to I could set it up to pay those automatically when the next bill came in (or not, it's up to me).
I've never written a check in my life (I'm 37), and whenever I get one I laugh and am shocked people still use them.
And to top it all off, the American bank cheque system is so insecure.
Functionally it's the same thing, except that instead of writing on a piece of paper that you're giving the bank authority to withdraw your funds, you're doing it online. It takes less time, it's more reliable, and you get even better record keeping, as you can enter notes when you make the transfer.
I have stamps to use up, and it costs them probably $7-$10 to handle it.
I doubt their remote deposit app is any less clunky than the consumer one they give me. If it’s better, they’re paying for it.
Someone needs to manage those people. And they need space to do their work.
I could see it taking 15 minutes in total labour costs.
Chargebacks are a thing, but they require constant vigilance and the occasional bureaucratic task.
Everyone already has the basic ability to pull funds from arbitrary checking accounts. heh.
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.
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.
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 transfer money to someone elses account. (With very restrictive exceptions, e.g. same bank, or maybe the bank has integrated a third party service...)
As inconceivable as the American system is in the beginning for somebody coming from the EU, I guess for many people from the US it's similarly non-obvious that a push system can (and does) exist somewhere else.
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.
PayPal et al are barely used here because the bank transfer system is free and frictionless.
There are very strong guarantees in the individual's favour if the company makes a mistake.
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 your life.
SEPA direct debits allows for R-transactions to unwind a collection up to 13 months after execution, no questions asked, it’s wild.
If you want to stick to paper bills, they all have the receiving account number and customer reference number so they can be paid manually via a transfer.
I keep enough money in my accounts (partly because of this) that I don't really care about it, but I'd be surprised if they don't use the preferred date.
> Our bank details are:
> Bank account number - 99183129
> Sort code - 57-40-99
This company is easily large enough that their bank details are already listed in online banking systems. You can choose "Pay a bill", then select "Southern Energy" rather than type in those account details.
Don't get me started on filing taxes!
which has your account information on it
(I do the same thing, though.)
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 banks in, say, Georgia.
In short, US banks cannot easily set up a way cheaper system with the vast number of banking partners they'd need to coordinate with and the large amount of regulatory systems to navigate.
The EU has 6,250 banks though. Each with different countries. With 28 different languages, cultures and governments, with far more differences than the states in the USA.
You're really arguing that it's harder to unify that in the homogeneous USA than it is in Europe? Come now.
Technically this is true but the clearing houses were set up a long time ago to solve this problem and they work fine
In the UK there are Building Societies. Originally the concept went only like this: If a thousand workers in a town pool their savings to form a mutual Building Society it can use that money to loan someone (one of their number or somebody else) money to build a house. The new house owner's payments on the loan provide good interest on the savings and a profit the society can use to expand, as savings and loan payments roll in they can loan more money for another house and so on, eventually everybody gets a house and rich bankers get nothing because the society's savers and borrowers are also its owners. The first ones were Limited Building Societies, they ceased to exist after a period of time having served their purpose - providing loans within a geographically constrained community, but the Permanent Building Societies grew, and eventually came to dominate mortgage lending as an industry in the UK.
Towards the end of last century unfortunately there were what the press called "Carpetbaggers". The carpetbaggers realised that a Permanent Building Society has a considerable cash reserve because it needs to be able to survive a "bank run" and its main assets are other people's homes which aren't liquid enough to cash out if a run happens. Their plan was, join the society and then vote as members to convert the society into a limited company, an ordinary bank - effectively cashing out. This worked on a number of famous Permanent Building Societies, including the one that had loaned money for the house I was growing up in at the time. I voted against, my parents (whose mortgage it was) voted in favour, and their side won, the society no longer exists. Some societies instituted "anti-carpetbagger" rules to try to prevent it, challenged demutualisation in the courts, or just plain voted against - those are still successful today, while the ones that turned into ordinary banks were mostly ruined in the recession (e.g. Northern Rock)
Edit: I also nearly witnessed a "carpetbagger" situation at a local credit union (where leadership wanted to become a bank/corporation), which was voted down.
It was perhaps more obvious (especially for the Limited Building Societies) that they've achieved something good if now everybody owns a home, whereas if now everybody has a savings account with the credit union, er... is that better? Maybe?
I can probably look it up but I received a not inconsiderable sum of money for my shares when I sold them many years later. I presume my parents sold and spent the money very soon after the plan went through. All members received shares (it would be obviously inequitable to propose that only those voting for the deal get shares if the vote passes, I'm not sure if that would be straight up illegal, but it would clearly be immoral).
You may want to read the findings of the Faster Payments Task Force (FPTF) https://fasterpaymentstaskforce.org/
Free and nearly instant email address based transfers directly through your bank account without having to sign up for anything extra. I've done a bunch of transfers with it and it's been solid.
It's about as easy as you can get and most US banks support it.
It's been a while since I sent funds to a new address but I am pretty sure my bank's UI provided protection against that, and now when I send future funds to the same account, I just pick them from a drop down box instead of entering it manually.
Much, much safer way to use Zelle is to ask the receiver to request a payment from you and then accept the request.
Although I'm guilty of just sending funds direct but only through email addresses which I usually copy / paste straight from what someone wrote to me.
Which is why services like Zelle have a bunch of things in their terms to make you more responsible for fraudulent transactions - so they're in a better position of not having to roll back as many. For that same reason, I think it's a terrible idea to sign up for things like Zelle with any account that handles more than petty cash
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.
I think that the nature of wire transfers makes them somewhat risky. The institutions facilitating the transfers assume some of that risk for their consumers. If a large some of money is moved from your account to someone else's, and you dispute the transfer, the institution sending the wire may have to refund you the money.
The cost of a single transfer offsets the risk of the aggregation of fraudulent transfers. This could be a calculation of volume, fraud rates, average amount transferred on that channel, etc.
This is all in addition to network costs as payment processors (third party inbetween financial institutions)
So, fees = portion of network cost + risk offset
Hope this sheds a little light.
Cheques can be forged, just as easy, if not easier than a wire transfer.
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.
Australia has fewer still, with the big 5 almost entirely dominant, yet we have instant bank transfers through Osko, have had almost universal contactless in store payments for years, etc. I suspect it's more about government corruption. Governments are captured, each for its own historical reasons, by different industries. Australia by mining industries, the US by medical & finance, local governments almost everywhere by property development.
It blew my mind going from that to what the US has.
The U.S. historically had many more banks than in Europe as the banking industry in Europe has historically been more centralized at the national level. Whereas in the U.S. not only did we have 50 states each regulating their own banking system (similar to Europe), but you had many more smaller banks rather than a few larger ones in each state.
It appears the U.S. now has fewer banks, but that's only because of a precipitous decline over the past few decades, and it's only been in the paste several years that the number of E.U. banks surpassed those in the U.S., long after the E.U. saw better payment systems.
So the reason the E.U. banking industry has more convenient payment systems, especially retail payment systems, is because they were historically both more centralized and less in number, which made consistent adoption of newer payment systems easier. Whereas the banking system in the U.S. was more fractured and far more diverse, and even with the dramatic drop in number and increase in centralization, we still see the repercussions.
If I give you a car / boat / house / gold bar to look after you will charge me a fee for the effort.
Where money is concerned there has been a magic trick - initially banks took your money and paid you a fee (interest rates).
However they sneakily make more money from other things
- Just offering less interest than you earn (competed away)
- Account fees (competition eats those away)
- Taking three days to move
money (regulators eat those away in EU, in US finally the Fed is killing it off - soon)
But overall, giving someone else money costs us money. Positive interest rates it seems are a thing of the past.
now wires (near instant transfers) have usually been about $25 sometimes plus a certain percent of the transaction amount. I always assumed that was the cost of having a real human audit the request and perform it in realtime.
Given other stories I've heard about the difficulty of resolving problematic payments over Venmo with no recourse, I bet they don't have much of a robust system in place for resolving that either.
Banking controls are expensive. It's cheap when you simply don't have them.
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.
One thing I remember was I think there were 3 different places in the ACH file to insert company name, and they were fixed length, each with a different length. I had a list of companies to support, so for each company, I carefully created 3 different abbreviated names for it, one for each length, applying more extreme abbreviation strategies for the shorter lengths.
20022 does a lot more than just payments, too.
edit: yes, downvote me to -3. I love you all
* 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.
User s9w appears to be German. ACH is a USA construct. The closest analog would be PE-ACHes for SEPA, of which OP might be familiar. Without context and operating from a localized search zone, googling ACH may render results irrelevant to the topic at hand, requiring marginally more google-fu than might otherwise make sense just to embrace a hackernews thread.
Hackernews in general is pretty US-centric in terms of assumptions, and this comment is emblematic of this defect.
In the future, you could just answer the question, or you could opt out of replying entirely. You never know what constraints a person has encountered when trying to answer it on their own. For all you know, the user asking must work with an impairment or disability rendering simple web queries as taxing or arduous.
There's nothing wrong with not knowing what ACH is and asking about it. But conversely, there's also nothing wrong with writing an article about ACH that doesn't bother to explain the background in detail, nor is there anything wrong with posting such an article to HN.
The only thing I take issue with is the suggestion that it's somehow unusual or noteworthy.
> In the future, you could just answer the question, or you could opt out of replying entirely.
I noticed that other commenters had already answered the question adequately, or else I would have included it in my response.
(For what it's worth, I just tried a Google search for "ach" in an incognito window with both region and language set to Germany, and two articles about the ACH system were on the first page of results. Again, I am not saying this to criticize for not knowing about it.)
It seems though that there are things like ACH that are somehow very common knowledge but I've never come across until now.
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.
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.
It is for anyone involved with money. However, it is a noun, not a verb.
>* An article about a null-pointer bug in GCC that doesn't explain what pointers are
That's obviously the finger you point at people with, a null pointer is when you don't point at someone but just angrily stare at them.
>* An article about Stripe that doesn't explain what Stripe is or does
Obviously a stripe is those lines on zebras that make them zebras
>* An article about the programming language Julia that doesn't explain what Julia is.
Clearly the one and only Julie Roberts...
Obviously I'm being stupid but that's genuinely how I feel sometimes when I open HN
- "RUST does..." erm, why are they screaming rust, I know rust is annoying if you don't sand it down and deal with it quickly but why are we yelling about oxidation
- "ExFAT..." why are they talking about their weight loss on HN
- "Wave-based non-line-of-sight computational imaging in Julia" some woman named Julia used a computer to figure out how to best appear in photographs of them waving? Must be one of the royals.
- "A+, the Programming Language of Morgan Stanley" why do I care about Morgan's grades?
- "YouTube should stop recommending garbage videos to users" I dunno, I watched a really good one on landfills one time, I think it also recommended me one on how fuel trucks refill gas stations after that.
- "Curl exercises" yeah, I hammer curl on Tuesdays as some of my accessory work, not a real fan of bicep curls though.
- "Is Ringo Starr a Good Drummer?" I assume this is about the Beatle but it's probably about some computer programming language in some network security application.
- "Perils of Constructors " must be English as a second language, clearly they mean Perils of Construction, certainly a mod will fix that title soon. I'm guessing death and hemorrhoids.
If someone submitted "How I managed to emulate Super Mario in C without using more than 30 Kb of memory" I'd be super interested and look to see what sorts of crazy pointer tricks or unioned structs were in use - even though I don't currently work with games or C in my daily.
If every detail was explained in layman's terms, reading would be terribly boring and nuanced technical writing would be dead.
There are some terribly complex CS concepts (try and explain how a hash function produces essentially random output - or how private and public keys are actually computed in a manner to make private keys non-trivially derivable from public keys) and some terribly ingrained jargon (Oh, how's that SSL cert was it SHA signed?) but the effect on your topic of how these jargony terms work is usually easy to express, you don't need to know the history of POSIX to comprehend that CS people have a tool that checks if a string sorta looks like an expect format that we use everywhere, and you don't need to explain positive lookahead zero width assertions to convey that point.
Having a single clause stating "ACH (the preferred US method for bank-to-bank transfers)" would instantly clear all this up... it's also insanely relevant because the topic of the article is about what happens when bank-to-bank transfers have a recipient who is dead.
As an end consumer or other entity(like a TPA or bank ISO), you can submit a request or set of requests that will end up in that banks ACH file. At the end of the day, the bank that submits that file is responsible for ensuring those requests are valid, and ensuring all the returns are processed. These requests consist of to/from account routing information and dollar amounts with a lot of other rules in the file specifications. Not every banks can submit these directly. A lot of banks submit to larger banks and so on. I vaguely recall there also being fines/fees applied to the file submitter on if you send bad data or exceed return thresholds.
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 Bundesbank.
"2 Payer deceased You have attempted to set up a DDI on the account of someone who is deceased. Extremely rare."
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.
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?
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.
It assumes intermittent serial connections between systems to transfer the payload. The systems then process the payload offline, generate a response, and send back the result during the next transfer window.
Nowadays this is done via the Internet,* but the same basic architecture, and in many cases, the same mainframe backends, are still being used to do the processing.
* I'm not sure how the banks and the Fed are connected, actually. But ACH from businesses almost always go over the Internet. They used to go over dialup.
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."
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.
And the accompanying hackernews thread - https://news.ycombinator.com/item?id=7636066
But basically it seems like ACH is slow because the federal reserve runs once a day batches.
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 the only practical way the receiving bank can fully clear a transaction.
I probably read my statements (online only) about every two months...
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).