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Your blog article is startlingly incorrect pretty early on. Individuals can and do use ACH between each other all the time. It is literally how paper checks wor

Your blog article is startlingly incorrect pretty early on. Individuals can and do use ACH between each other all the time. It is literally how paper checks work in the US. And I’ve been able to use a routing number and account number to send money to someone else online via ACH for decades...

throwanem 6y ago
I think the distinction being made there is that, while individuals can request that banks or businesses perform an ACH on our behalf, as in your funds transfer example or to pay a bill without incurring payment card fee overhead, we can't generate and submit our own batches directly to any clearinghouse. Which is just as well! In that circumstance, there would be nothing structurally to stop anyone who knows your routing and account number from performing ACH debits against your account. That's actually an already extant attack vector - and the reason why I never pay bills via ACH; I don't trust most payment processors to be very secure and fraudulent payment card transactions are easier to claw back - but without the barrier to entry inherent in the attacker having to subvert or convince some third party to act on their behalf, I think it'd be a much more common occurrence.
- dataflow 6y ago
  > I think the distinction being made there is that, while individuals can request that banks or businesses perform an ACH on our behalf, as in your funds transfer example or to pay a bill without incurring payment card fee overhead, we can't generate and submit our own batches directly to any clearinghouse. Is that possible in any country? I've never heard of a banking system where ordinary people directly submit a transaction to the national clearing house. They always tell their bank to send their funds, right?
  - throwanem 6y ago
    As far as I know, yes, and UPI/"FedNow"/Cashapp-and-friends don't change that. That being so, if I'm honest I'm not really sure where the prior commenter's objection originates. Maybe they know about some directly accessible clearinghouse that I don't? I'd be surprised for several reasons to learn such a thing exists, but I've been surprised plenty of times before.
    - dataflow 6y ago
      Unless this is actually possible in some country, I think they're both confused. But I'm guessing the objection was probably intended to convey "this is just as 'direct' in the US as it is in Australia", which would seem like a valid objection to the article.
      - throwanem 6y ago
        I suppose that's fair. In the article author's defense, he did pretty much disclaim any detailed or experiential knowledge right up front. That said, while my own relevant experience is now many years past and was in any case mostly refracted through the payment card industry, I didn't spot any obvious howlers.
      - zaroth 6y ago
        Most country’s bank systems have a “receiving only” number which can be shared and then used by a 3rd party to directly enter an instant money transfer into the system. Because America doesn’t have the equivalent of a “receive only” code, every service has to build that functionality themselves “on top of” ACH, and prevent direct access to ACH debit and credit functionality. That being said, for $10/month any business can get direct access to ACH including debits and credits, and then whatever gateway you use is supposed to do some level of fraud detection against your transactions.
        mehrdadn 6y ago
        A few days ago someone here point out the numbers aren't actually "receive-only" for IBANs either, but anyway, the point you're making is a separate point from the one being made here. If anything, it's the opposite -- it's arguing that the US system is too capable, rather than insufficiently capable.
Dobbs 6y ago
In the UK if I want to send someone money to anyone in the UK I open the mobile app and input their sort and account number, type in the amount of money and hit send. Done. Similarly in the NL if I want to send someone money to anyone in the EuroZone I open my bank app type in their IBAN type in the amount of money and hit send. Done. Back in 2017 when I lived in the US this just wasn't possible. If I wanted to send money to someone I had to use Paypal, TransferWise (or similar), Venmo, etc. Some banks had direct access to ACH but far from all, then if they do support it it takes two days to arrive. Some banks allowed easy instant payments between accounts within the same bank. Much of my family purposefully keep an account with a small west coast credit union to facilitate moving money amongst ourselves. Maybe things have gotten massively better in the US in the last 3+ years, but it was light years behind the UK and NL. In terms of speed, ease of use, and adoption.
- pbhjpbhj 6y ago
  Those transactions always make me nervous - is there a reason they don't have a step of showing the account name when you input the number? Like, I type 31-45-76 0452768934 and it says "Mr & Mrs Y O Mama" or "Notafraud & Co. Ltd." or whatever, as a confirmation?
  - IanCal 6y ago
    That does exist now in the UK, I had it last time I sent money - I put in the name I expected and then it showed me the name on their account because they were a bit different. For companies there are present lists so I don't need to know most company details to send say gas bill payments.
  - acta_non_verba 6y ago
    You’ll be pleased to know we do now have this in the United Kingdom. It’s called Confirmation of Payee.
  - Dobbs 6y ago
    We have this for IBAN payments within the NL, I can't speak for the rest of the EuroZone.
woodruffw 6y ago
Thanks for the feedback! I’m aware that checks (and “instant” payments like PayPal, Venmo, Zelle) are settled via ACH; as other commenters have pointed out for me, the claim was that individuals can’t make “raw” ACH transactions. As for sending money via routing and account number: I’ve received conflicting information from different banks on how acceptable this is. The university I went to allowed it as a way to pay tuition (you could give them your account number and they would debit you), but every bank that I’ve privately banked with has told me that I need to own or be responsible for both accounts in order to do a “direct” (i.e. non-cheque) transfer. But I don’t know whether that’s just a policy thing among financial institutions.
mixmastamyk 6y ago
I tried that two months ago and the bank didn't support it, unless I was holder of both accounts.

throwanem 6y ago

I think the distinction being made there is that, while individuals can request that banks or businesses perform an ACH on our behalf, as in your funds transfer example or to pay a bill without incurring payment card fee overhead, we can't generate and submit our own batches directly to any clearinghouse. Which is just as well! In that circumstance, there would be nothing structurally to stop anyone who knows your routing and account number from performing ACH debits against your account. That's actually an already extant attack vector - and the reason why I never pay bills via ACH; I don't trust most payment processors to be very secure and fraudulent payment card transactions are easier to claw back - but without the barrier to entry inherent in the attacker having to subvert or convince some third party to act on their behalf, I think it'd be a much more common occurrence.

dataflow 6y ago
> I think the distinction being made there is that, while individuals can request that banks or businesses perform an ACH on our behalf, as in your funds transfer example or to pay a bill without incurring payment card fee overhead, we can't generate and submit our own batches directly to any clearinghouse. Is that possible in any country? I've never heard of a banking system where ordinary people directly submit a transaction to the national clearing house. They always tell their bank to send their funds, right?
- throwanem 6y ago
  As far as I know, yes, and UPI/"FedNow"/Cashapp-and-friends don't change that. That being so, if I'm honest I'm not really sure where the prior commenter's objection originates. Maybe they know about some directly accessible clearinghouse that I don't? I'd be surprised for several reasons to learn such a thing exists, but I've been surprised plenty of times before.
  - dataflow 6y ago
    Unless this is actually possible in some country, I think they're both confused. But I'm guessing the objection was probably intended to convey "this is just as 'direct' in the US as it is in Australia", which would seem like a valid objection to the article.
    - throwanem 6y ago
      I suppose that's fair. In the article author's defense, he did pretty much disclaim any detailed or experiential knowledge right up front. That said, while my own relevant experience is now many years past and was in any case mostly refracted through the payment card industry, I didn't spot any obvious howlers.
    - zaroth 6y ago
      Most country’s bank systems have a “receiving only” number which can be shared and then used by a 3rd party to directly enter an instant money transfer into the system. Because America doesn’t have the equivalent of a “receive only” code, every service has to build that functionality themselves “on top of” ACH, and prevent direct access to ACH debit and credit functionality. That being said, for $10/month any business can get direct access to ACH including debits and credits, and then whatever gateway you use is supposed to do some level of fraud detection against your transactions.
      - mehrdadn 6y ago
        A few days ago someone here point out the numbers aren't actually "receive-only" for IBANs either, but anyway, the point you're making is a separate point from the one being made here. If anything, it's the opposite -- it's arguing that the US system is too capable, rather than insufficiently capable.

Dobbs 6y ago

In the UK if I want to send someone money to anyone in the UK I open the mobile app and input their sort and account number, type in the amount of money and hit send. Done. Similarly in the NL if I want to send someone money to anyone in the EuroZone I open my bank app type in their IBAN type in the amount of money and hit send. Done. Back in 2017 when I lived in the US this just wasn't possible. If I wanted to send money to someone I had to use Paypal, TransferWise (or similar), Venmo, etc. Some banks had direct access to ACH but far from all, then if they do support it it takes two days to arrive. Some banks allowed easy instant payments between accounts within the same bank. Much of my family purposefully keep an account with a small west coast credit union to facilitate moving money amongst ourselves. Maybe things have gotten massively better in the US in the last 3+ years, but it was light years behind the UK and NL. In terms of speed, ease of use, and adoption.

pbhjpbhj 6y ago
Those transactions always make me nervous - is there a reason they don't have a step of showing the account name when you input the number? Like, I type 31-45-76 0452768934 and it says "Mr & Mrs Y O Mama" or "Notafraud & Co. Ltd." or whatever, as a confirmation?
- IanCal 6y ago
  That does exist now in the UK, I had it last time I sent money - I put in the name I expected and then it showed me the name on their account because they were a bit different. For companies there are present lists so I don't need to know most company details to send say gas bill payments.
- acta_non_verba 6y ago
  You’ll be pleased to know we do now have this in the United Kingdom. It’s called Confirmation of Payee.
- Dobbs 6y ago
  We have this for IBAN payments within the NL, I can't speak for the rest of the EuroZone.

woodruffw 6y ago

Thanks for the feedback! I’m aware that checks (and “instant” payments like PayPal, Venmo, Zelle) are settled via ACH; as other commenters have pointed out for me, the claim was that individuals can’t make “raw” ACH transactions. As for sending money via routing and account number: I’ve received conflicting information from different banks on how acceptable this is. The university I went to allowed it as a way to pay tuition (you could give them your account number and they would debit you), but every bank that I’ve privately banked with has told me that I need to own or be responsible for both accounts in order to do a “direct” (i.e. non-cheque) transfer. But I don’t know whether that’s just a policy thing among financial institutions.

mixmastamyk 6y ago

I tried that two months ago and the bank didn't support it, unless I was holder of both accounts.