Academic journal article ABA Banking Journal

One Giant Leap for ACH

Academic journal article ABA Banking Journal

One Giant Leap for ACH

Article excerpt

With its June announcement of a new same-day settlement opt-in product, the Federal Reserve has single-handedly changed the competitive relevance of the ACH system, making it competitive with the card networks, but at a much lower cost. The new service is limited to three payment options. The eligible payments are:

* Consumer checks converted into accounts receivable entry (ARC) debits;

* Checks written to a business for a one-time purchase and processed later--a back-office conversion (BOC); or

* A check written at a point of sale that is scanned for the MICR line information and then handed back--a point-of-purchase (POP) debit.

With all three of these transaction types, if the originating institution delivers the file to the Fed no later than 2 p.m. Eastern time and if the receiving financial institution has opted in, the transaction can settle same-day (5 p.m. Eastern).

The new service also allows consumers that authorize debit transfers over the internet (WEB-ACH debit) or the telephone (TEL-ACH debit). …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.