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I was a NACHA member for the better part of the past year so I've talked to many of the bankers, consultants and government-types involved with running the ACH

I was a NACHA member for the better part of the past year so I've talked to many of the bankers, consultants and government-types involved with running the ACH network about this. It's not about the float. It's about the up-front investment in the standard, which millions of bank customers have already implemented. It's also about the risk of allowing instantaneous funds transfers; the current delay allows for at least some mitigation. It's also about the fact that there is no new standard yet. (Based on what I know about NACHA, there won't be for a while.)

mgkimsal 16y ago
What's cute is that much of the time when I pay for something it's instantly charged to my card - my account balance reflects the deducted money, whether it's been actually moved out to the other account or not. But if a merchant gives me a credit/refund, it can take several days for that to show up - some places will say "two billing cycles" (although they have no idea how long my billing cycle is - I presume they mean their own internal cycles). Money already seems to be moved somewhat instantly, but only ever out of my accounts.
- mkramlich 16y ago
  Bingo. This is why it smells like something fishy. Like the banks are trying to earn carry/float interest. And possibly the government is in bed with them, by adding some regulation to impose an artificial delay, to supposedly add safety/caution, but in reality to give the banks cover to earn more profit on this carry/float interest. This is my best thumbnail theory, anyway.
- thinkcomp 16y ago
  That's because the plastic card interchange works in real time and ACH does not. Even your charge cards have a delay, though. There's a difference between authorizing a purchase and capturing the funds. Once funds are captured there's still a batch settlement process that happens each day. So it's not really that big of a conspiracy; the players aren't even the same.
  - mgkimsal 16y ago
    Agreed on auth/capture/settle - it's possible it could be different though, we just have an entrenched group of players that prefer the status quo.
    - thinkcomp 16y ago
      It definitely could be different. That's why I'm working on FaceCash.

mgkimsal 16y ago

What's cute is that much of the time when I pay for something it's instantly charged to my card - my account balance reflects the deducted money, whether it's been actually moved out to the other account or not. But if a merchant gives me a credit/refund, it can take several days for that to show up - some places will say "two billing cycles" (although they have no idea how long my billing cycle is - I presume they mean their own internal cycles). Money already seems to be moved somewhat instantly, but only ever out of my accounts.

mkramlich 16y ago
Bingo. This is why it smells like something fishy. Like the banks are trying to earn carry/float interest. And possibly the government is in bed with them, by adding some regulation to impose an artificial delay, to supposedly add safety/caution, but in reality to give the banks cover to earn more profit on this carry/float interest. This is my best thumbnail theory, anyway.
thinkcomp 16y ago
That's because the plastic card interchange works in real time and ACH does not. Even your charge cards have a delay, though. There's a difference between authorizing a purchase and capturing the funds. Once funds are captured there's still a batch settlement process that happens each day. So it's not really that big of a conspiracy; the players aren't even the same.
- mgkimsal 16y ago
  Agreed on auth/capture/settle - it's possible it could be different though, we just have an entrenched group of players that prefer the status quo.
  - thinkcomp 16y ago
    It definitely could be different. That's why I'm working on FaceCash.