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Simple: ACH is the 800-pound gorilla of banking in the United States and the established players basically have zero incentive to change. It is in fact only a l
by belfalas 4y ago
Simple: ACH is the 800-pound gorilla of banking in the United States and the established players basically have zero incentive to change. It is in fact only a losing proposition for them. The banks make great fee-based money from the ACH system and the lag times in ACH create lots of juicy arbitrage opportunities.
It is true that the system is insecure and terrible for consumers, but this is not an issue for the banks. They have insurance.
- gernb 4y ago> The banks make great fee-based money from the ACH system Confused. The companies that give me the option of ACH vs Credit Card always charge 2-3% to pay via credit card and nothing to pay via ACH. Why wouldn't they pass on ACH charges to me if they are a "great fee"? update: I see from another link that Chase charges $0.25 per transaction so not such a great fee. But maybe across tons of charges it adds up.
- mywittyname 4y agoNot the OP. The 2-3% credit cards charge as fees are largely used to deal with fraud. There were 30 billion ACH transactions in 2021, and this number has been growing by 8%+ YoY for a while now. $0.25 a transaction is solid revenue when you consider that it's almost pure profits because fraud isn't a big issue and the computational power to manage ~100 million transactions a day is pretty modest.
- quesera 4y agoThis is true, and even more so. Medium and large ACH customers pay much less than $0.25 per entry, which reflects the security and low-risk nature of the network.
- JohnHaugeland 4y agoThe post is asking about the low rate of fraud
- mousetree 4y agoWhat fees and what arbitrage opportunities?