10 ms·

From the article, when I searched for "holiday": "NACHA projects that ACH Originators would generate approximately 1.4 billion same-day ACH payments annually a

by rsync 9y ago

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.

tjohns 9y ago
That means you need engineers on call 24/7/365, which raises the cost. One of the nice things about ACH is that it's dirt cheap, especially compared to the credit card network. For example, Stripe charges 0.80% for an ACH transaction, capped at $5 max. Some processors just charge a flat rate. A credit transaction is a whopping 2.90% + $0.30, with no cap. When it comes to my paycheck and bills, slow and cheap is totally fine. On top of that, many banks don't even post transactions on weekends/holidays anyway. They'll remain pending until close of business on the next weekday. That's been starting to change, but still. The banking system is built around store-and-forward and batch processing, with lots of auditing in between. This is a feature, not a bug. :) Sure, it could be speed up... but if you really need instant, there are already options that exist (debit, credit, wire). You just have to pay for them. (Fun fact: Even the credit card system isn't really instant. The credit authorization goes through immediately, but the actual charge still takes 1-2 days to clear... and is often done in end-of-day batches. And yes, there are exceptions... but it's not the norm.)
- X-Istence 9y ago
  By November 2017 in Europe you will be able to transfer money almost instantly: https://www.ecb.europa.eu/press/pr/date/2015/html/pr151127.en.html https://www.ecb.europa.eu/press/pr/date/2015/html/pr151127.e... https://www.europeanpaymentscouncil.eu/what-we-do/sepa-instant-credit-transfer https://www.europeanpaymentscouncil.eu/what-we-do/sepa-insta... Same day transfers have been a reality for a long time (at least in The Netherlands), the fact that it takes 3 - 5 days here in the US is absolutely insane.
  - seanp2k2 9y ago
    Don't forget that many banks will still require that they fax you a form to sign which must be faxed back for large transfers. This + multiple phone calls to both the bank and the person you're trying to pay make for a fun time.
    - jon-wood 9y ago
      Sure, but most transactions aren't large. The UK system is convineant enough that I've had several occasions where people have asked me to grab some cash for them on the way to meet because it was easier to make an instant bank transfer than to make the detour to a cash point.
- zkms 9y ago
  > One of the nice things about ACH is that it's dirt cheap, especially compared to the credit card network. So is UK's Faster Payments, which is near-real-time and far cheaper than the ACH numbers you gave: http://www.fasterpayments.org.uk/membership/access-options/direct-membership/fees-structure http://www.fasterpayments.org.uk/membership/access-options/d... Really, there's no reason for ACH to suck so much. Other countries have better payments infrastructure that costs less (to operate and for end-users) and is more modern -- and it hasn't imploded their banking systems.
- jopsen 9y ago
  Banking isn't expensive in the US because of engineering costs... It's expensive because of greed Enabled by a lack of competition and regulatory pressure. In Europe politicians, giant co-operatives, and partially state owned companies aren't afraid to join the debate when someone mentions credit card fees.
- kerkeslager 9y ago
  A team of 100 24/7 engineers amortized across the full amount of money transferred across i.e. Bank Of America or Credit Suisse's would cost a fraction of a penny per dollar, and it wouldn't require 100 24/7 engineers. The costs of real-time ACH have nothing to do with engineering payroll, and everything to do with executive payroll.
  - mooreds 9y ago
    Or cannibalization of existing revenues from wire transfers.
zkms 9y ago
> What we need is instant clearing, 24/7/365. Nobody cares that it's Sunday. Nobody cares that it's Presidents Day. UK has had near-real-time transfers for a while, it's called "Faster Payments" and there's no fees for end-users. It's also a "push" system (and not a "pull" system like ACH) which has serious advantages -- you can send money to anyone given their sort code and account number, and those numbers do not need to be kept private. With ACH if you have someone's routing number and account number you can pull money from their account without them needing to authorise it. Same-day ACH is just ACH with more batches, it's the same old shit cooked a little faster.
- hackerboos 9y ago
  Faster payments is one of the best systems I've used having lived in several countries. Paypal funds to a UK bank usually takes a few minutes. Here in Canada they have the Interac E-Transfer which is money by email and not usually free $1-$2 per transfer. It also has a question/answer security component which can be annoying if you simply want to send someone money.
  - neospice 9y ago
    RBC and TD now waive the e money transfer fee.
  - vidarh 9y ago
    It also allows for things like one of the UK Bitcoin trading sites that offers payment by bank transfer where it generally takes less time for the bank transfer to reach them than it takes for the BTC transfer to confirm.
    - skolsuper 9y ago
      Which site is that? Last two times I tried to buy bitcoin in the UK, I had to send Euros to some Polish bank.
      - vidarh 9y ago
2bluesc 9y ago
> What we need is instant clearing, 24/7/365. Nobody cares that it's Sunday. Nobody cares that it's Presidents Day. This always amazed me that the ACH transaction couldn't be set in motion (not fully committed perhaps) duing holidays and weekends. Do servers cost more to run on weekends and holidays?
- pbreit 9y ago
  No, but people do.
  - PretzelFisch 9y ago
    I think some of the smaller banks still have people interacting with the ACH. At least that is my impression from planet money http://www.npr.org/sections/money/2013/10/04/229224964/episode-489-the-invisible-plumbing-of-our-economy http://www.npr.org/sections/money/2013/10/04/229224964/episo...
    - seanp2k2 9y ago
      The dates are probably hard-coded in Fortran and no contractors will touch the core of the banking operation with a 1024PB pole.
      - pfarnsworth 9y ago
        Fortran is a scientific language, and is not used in banks and financial transactions.
      - antonvs 9y ago
        The language would more likely be COBOL.
    - pbreit 9y ago
      All banks have lots of people interacting with ACH.
  - 2bluesc 9y ago
gerdesj 9y ago
"What we need is instant clearing, 24/7/365. Nobody cares that it's Sunday. Nobody cares that it's Presidents Day." Given that the whole thing is done by computer, how on earth do holidays fit in? I will grudgingly accept an answer involving maint. staff but computers themselves don't take hols. The really funny/sad thing is that this is even a thing. The basic technologies required for near instantaneous inter bank account transfers has been available for quite a few decades.
- patio11 9y ago
  c.f. https://news.ycombinator.com/item?id=10505251 https://news.ycombinator.com/item?id=10505251 , where I explain the similar case of why some IRS web apps have office hours.
pbreit 9y ago
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.
- deleted 9y ago
  [deleted]
- seanp2k2 9y ago
  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.
  - zaroth 9y ago
    I am no fan of chip&sign, but there is added security from the terminal to the merchant gateway, where a very significant amount of card theft has traditionally occurred. The POS system can be compromised and your card number is still safe.
  - johncolanduoni 9y ago
    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.
- deleted 9y ago
  [deleted]
- kerkeslager 9y ago
  Does it occur to you that HN users are probably users of the banking system, and therefore quite qualified to comment on what users need?
mrb 9y ago
"So you'll still have to deal with the absurd notion of holidays and weekends when working with bank transfers." The blockchain works on holidays. Say what you want about Bitcoin and other cryptocurrencies, but the hard truth is that processing transactions 24/7/365 is part of their appeal compared to legacy financial systems, as perfectly illustrated in this example...
- hudon 9y ago
  A SQL database also works on holidays. The problem with the "legacy financial systems" is not that their technology mysteriously shuts down on holidays, it's that the people do. As soon as they automate clearing house processes, they can also have 24/7/365 transactions, blockchain or not.
  - uiri 9y ago
    Doesn't ACH stand for Automated Clearing House? Which part of the process has yet to be automated? Clearly it is poorly named if it isn't fully automated which seems to be the case. It is possible that it is fully automated but because money is important, you need maintenance staff to be available to correct any mistakes.
    - will_hughes 9y ago
      It's automated. It doesn't mean continuously operating. I'd recommend listening to this planet money episode[1] where they describe how the ACH came to be. It's called automated, because it's a step up from the original method of payment processing between banks: handing physical slips of paper between each other. [1] http://www.npr.org/sections/money/2013/10/04/229224964/episode-489-the-invisible-plumbing-of-our-economy http://www.npr.org/sections/money/2013/10/04/229224964/episo...
      - sizzle 9y ago
        Thanks for the link
  - 9y ago
shepardrtc 9y ago
There are a few cryptcurrencies that are attempting to solve this problem. Some are actually centralized enough that banks are testing them out for this exact purpose (Ripple). Are they the solution to the problem? I don't know. But ACH is pretty old school and there are more than enough technologies to do far better.
jo6gwb 9y ago
The Clearinghouse has developed a 24/7/365 network and is currently testing - rollout is expected in 2018 https://www.theclearinghouse.org/payments/real-time-payments https://www.theclearinghouse.org/payments/real-time-payments

by rsync 9y ago

tjohns 9y ago

That means you need engineers on call 24/7/365, which raises the cost. One of the nice things about ACH is that it's dirt cheap, especially compared to the credit card network. For example, Stripe charges 0.80% for an ACH transaction, capped at $5 max. Some processors just charge a flat rate. A credit transaction is a whopping 2.90% + $0.30, with no cap. When it comes to my paycheck and bills, slow and cheap is totally fine. On top of that, many banks don't even post transactions on weekends/holidays anyway. They'll remain pending until close of business on the next weekday. That's been starting to change, but still. The banking system is built around store-and-forward and batch processing, with lots of auditing in between. This is a feature, not a bug. :) Sure, it could be speed up... but if you really need instant, there are already options that exist (debit, credit, wire). You just have to pay for them. (Fun fact: Even the credit card system isn't really instant. The credit authorization goes through immediately, but the actual charge still takes 1-2 days to clear... and is often done in end-of-day batches. And yes, there are exceptions... but it's not the norm.)

X-Istence 9y ago
By November 2017 in Europe you will be able to transfer money almost instantly: https://www.ecb.europa.eu/press/pr/date/2015/html/pr151127.en.html https://www.ecb.europa.eu/press/pr/date/2015/html/pr151127.e... https://www.europeanpaymentscouncil.eu/what-we-do/sepa-instant-credit-transfer https://www.europeanpaymentscouncil.eu/what-we-do/sepa-insta... Same day transfers have been a reality for a long time (at least in The Netherlands), the fact that it takes 3 - 5 days here in the US is absolutely insane.
- seanp2k2 9y ago
  Don't forget that many banks will still require that they fax you a form to sign which must be faxed back for large transfers. This + multiple phone calls to both the bank and the person you're trying to pay make for a fun time.
  - jon-wood 9y ago
    Sure, but most transactions aren't large. The UK system is convineant enough that I've had several occasions where people have asked me to grab some cash for them on the way to meet because it was easier to make an instant bank transfer than to make the detour to a cash point.
zkms 9y ago
> One of the nice things about ACH is that it's dirt cheap, especially compared to the credit card network. So is UK's Faster Payments, which is near-real-time and far cheaper than the ACH numbers you gave: http://www.fasterpayments.org.uk/membership/access-options/direct-membership/fees-structure http://www.fasterpayments.org.uk/membership/access-options/d... Really, there's no reason for ACH to suck so much. Other countries have better payments infrastructure that costs less (to operate and for end-users) and is more modern -- and it hasn't imploded their banking systems.
jopsen 9y ago
Banking isn't expensive in the US because of engineering costs... It's expensive because of greed Enabled by a lack of competition and regulatory pressure. In Europe politicians, giant co-operatives, and partially state owned companies aren't afraid to join the debate when someone mentions credit card fees.
kerkeslager 9y ago
A team of 100 24/7 engineers amortized across the full amount of money transferred across i.e. Bank Of America or Credit Suisse's would cost a fraction of a penny per dollar, and it wouldn't require 100 24/7 engineers. The costs of real-time ACH have nothing to do with engineering payroll, and everything to do with executive payroll.
- mooreds 9y ago
  Or cannibalization of existing revenues from wire transfers.

zkms 9y ago

> What we need is instant clearing, 24/7/365. Nobody cares that it's Sunday. Nobody cares that it's Presidents Day. UK has had near-real-time transfers for a while, it's called "Faster Payments" and there's no fees for end-users. It's also a "push" system (and not a "pull" system like ACH) which has serious advantages -- you can send money to anyone given their sort code and account number, and those numbers do not need to be kept private. With ACH if you have someone's routing number and account number you can pull money from their account without them needing to authorise it. Same-day ACH is just ACH with more batches, it's the same old shit cooked a little faster.

hackerboos 9y ago
Faster payments is one of the best systems I've used having lived in several countries. Paypal funds to a UK bank usually takes a few minutes. Here in Canada they have the Interac E-Transfer which is money by email and not usually free $1-$2 per transfer. It also has a question/answer security component which can be annoying if you simply want to send someone money.
- neospice 9y ago
  RBC and TD now waive the e money transfer fee.
- vidarh 9y ago
  It also allows for things like one of the UK Bitcoin trading sites that offers payment by bank transfer where it generally takes less time for the bank transfer to reach them than it takes for the BTC transfer to confirm.
  - skolsuper 9y ago
    Which site is that? Last two times I tried to buy bitcoin in the UK, I had to send Euros to some Polish bank.
    - vidarh 9y ago

2bluesc 9y ago

> What we need is instant clearing, 24/7/365. Nobody cares that it's Sunday. Nobody cares that it's Presidents Day. This always amazed me that the ACH transaction couldn't be set in motion (not fully committed perhaps) duing holidays and weekends. Do servers cost more to run on weekends and holidays?

pbreit 9y ago
No, but people do.
- PretzelFisch 9y ago
  I think some of the smaller banks still have people interacting with the ACH. At least that is my impression from planet money http://www.npr.org/sections/money/2013/10/04/229224964/episode-489-the-invisible-plumbing-of-our-economy http://www.npr.org/sections/money/2013/10/04/229224964/episo...
  - seanp2k2 9y ago
    The dates are probably hard-coded in Fortran and no contractors will touch the core of the banking operation with a 1024PB pole.
    - pfarnsworth 9y ago
      Fortran is a scientific language, and is not used in banks and financial transactions.
    - antonvs 9y ago
      The language would more likely be COBOL.
  - pbreit 9y ago
    All banks have lots of people interacting with ACH.
- 2bluesc 9y ago

gerdesj 9y ago

"What we need is instant clearing, 24/7/365. Nobody cares that it's Sunday. Nobody cares that it's Presidents Day." Given that the whole thing is done by computer, how on earth do holidays fit in? I will grudgingly accept an answer involving maint. staff but computers themselves don't take hols. The really funny/sad thing is that this is even a thing. The basic technologies required for near instantaneous inter bank account transfers has been available for quite a few decades.

patio11 9y ago
c.f. https://news.ycombinator.com/item?id=10505251 https://news.ycombinator.com/item?id=10505251 , where I explain the similar case of why some IRS web apps have office hours.

pbreit 9y ago

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.

deleted 9y ago
[deleted]
seanp2k2 9y ago
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.
- zaroth 9y ago
  I am no fan of chip&sign, but there is added security from the terminal to the merchant gateway, where a very significant amount of card theft has traditionally occurred. The POS system can be compromised and your card number is still safe.
- johncolanduoni 9y ago
  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.
deleted 9y ago
[deleted]
kerkeslager 9y ago
Does it occur to you that HN users are probably users of the banking system, and therefore quite qualified to comment on what users need?

mrb 9y ago

"So you'll still have to deal with the absurd notion of holidays and weekends when working with bank transfers." The blockchain works on holidays. Say what you want about Bitcoin and other cryptocurrencies, but the hard truth is that processing transactions 24/7/365 is part of their appeal compared to legacy financial systems, as perfectly illustrated in this example...

hudon 9y ago
A SQL database also works on holidays. The problem with the "legacy financial systems" is not that their technology mysteriously shuts down on holidays, it's that the people do. As soon as they automate clearing house processes, they can also have 24/7/365 transactions, blockchain or not.
- uiri 9y ago
  Doesn't ACH stand for Automated Clearing House? Which part of the process has yet to be automated? Clearly it is poorly named if it isn't fully automated which seems to be the case. It is possible that it is fully automated but because money is important, you need maintenance staff to be available to correct any mistakes.
  - will_hughes 9y ago
    It's automated. It doesn't mean continuously operating. I'd recommend listening to this planet money episode[1] where they describe how the ACH came to be. It's called automated, because it's a step up from the original method of payment processing between banks: handing physical slips of paper between each other. [1] http://www.npr.org/sections/money/2013/10/04/229224964/episode-489-the-invisible-plumbing-of-our-economy http://www.npr.org/sections/money/2013/10/04/229224964/episo...
    - sizzle 9y ago
      Thanks for the link
- 9y ago

shepardrtc 9y ago

There are a few cryptcurrencies that are attempting to solve this problem. Some are actually centralized enough that banks are testing them out for this exact purpose (Ripple). Are they the solution to the problem? I don't know. But ACH is pretty old school and there are more than enough technologies to do far better.

jo6gwb 9y ago

The Clearinghouse has developed a 24/7/365 network and is currently testing - rollout is expected in 2018 https://www.theclearinghouse.org/payments/real-time-payments https://www.theclearinghouse.org/payments/real-time-payments