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It’s got nothing to do with that. ACH is a batch processing system written in COBOL in the 1970s. Nothing is going to get rid of the batch nature of the system
by TedDoesntTalk 6y ago
It’s got nothing to do with that. ACH is a batch processing system written in COBOL in the 1970s. Nothing is going to get rid of the batch nature of the system except a new system based on asynchronous messaging. That’s what FedNow is.
- kelnos 6y agoThe issue with ACH isn't the batch nature, it's that banks on both sides of the transaction are allowed a fairly long amount of time (upwards of a business day) to decide whether to accept or decline the transaction. If they decide immediately, it can go faster, but they don't have to, and many banks have no incentive to work on processing faster. They could still use a batch processing system, and just process the batches once per hour, or half hour, or whatever. It would still be slower than some newly-designed instant payments system, but could potentially be more palatable within the current system.
- TedDoesntTalk 6y ago> no incentive to work on processing faster Not sure I agree. How about the incentive to prevent customers using competing services like Venmo and others? Also the incentive to quickly receive funds into bank coffers so the bank can lend it faster. Presumably, increasing the ACH batch frequency would break something in the system or it would already have been done.
- vxNsr 6y agoACH is used either to get paid by an employee or to move money between accounts, neither of those things are that easy to do with Venmo, in fact zelle was created to compete with Venmo and it addresses that competition so nicely that many of my friends have moved to it.