This made me cringe:<p>> <i>Your [bank] will set you up with a secure FTP server onto which you’ll upload ACH files.</i><p>Automated financial transactions, with lots of money involved. Secure. <i>FTP server.</i><p>Of course I know that FTP is still considered "secure" for some business applications but this is absurd. With all the security (mis)features the banks have put forward with card payments in order to shift liability to account holders, the very core of inter-bank transactions then runs on something as insecure as FTP.<p>The shoemaker's children have no feet.
If you want to get into the nitty gritty of the format of ACH/NACHA files you can buy the spec here:<p><a href="https://www.nacha.org/nacha-estore-rules" rel="nofollow">https://www.nacha.org/nacha-estore-rules</a><p>But you can find parts of the book online at various places. Many financial institutions support NACHA files, but you'll also find many that violate the spec. I happen to have implemented a C# NACHA implementation recently and it wasn't a lot of fun. And there is a huge difference between ACH receipt and ACH origination.
If you don't want to wait for part 2, NPR had a decent podcast about how the current American ACH system works, and why it hasn't moved out of the 1960s:<p><a href="http://www.npr.org/blogs/money/2013/10/04/229224964/episode-489-the-invisible-plumbing-of-our-economy" rel="nofollow">http://www.npr.org/blogs/money/2013/10/04/229224964/episode-...</a>
Just curious. How hard is it for a bank to agree to be your “Originating Depository Financial Institution"? We currently use Balanced for ACH payouts, but it sounds like we could actually do this ourselves and significantly speed up the process as well as cut down on fees.
So, an entity that's set up with an ODFI can initiate arbitrary debits to arbitrary accounts, with no action by the owner of the debited account. What happens if that privilege is abused? Is it like chargebacks with credit cards? What if the debit is so small the victim doesn't notice?
I'm an ACH product manager who's worked the user side of ACH for years, and I've never seen a conversation like this. It's amazing. Even though most of it went off on a file-transfer tangent, I've picked up some really interesting tips. Like, I never imagined there would be stuff about ACH on GitHub. BTW, ZenPayroll is an amazing product and I want to work there.
Great intro to a near-ubiquitous payment format (in the US - outside the US, it looks like ISO 20022 [1] is taking over).<p>I'm looking forward to seeing details about payment confirmation/rejection, and possibly stuff about automated wire transfers (so-called "high value payments" in payment-geek parlance).<p>For those of you who are just coming into the Finance space, I found this site to be very helpful in getting your feet wet [2].<p>Anyone have other resources they've found useful/informative?<p>[1] <a href="http://en.wikipedia.org/wiki/ISO_20022" rel="nofollow">http://en.wikipedia.org/wiki/ISO_20022</a><p>[2] <a href="http://www.accountingcoach.com" rel="nofollow">http://www.accountingcoach.com</a>
Good start. Would love to see what an actual ACH file looks like. Googling returns some specs and the like, but not sure if any contain the exact doc that gets FTP'd to the Fed.
"moves electronically through the banking system today"<p>I assume only in United States? I wonder if one can automate SWIFT transfers the way one does ACH, that would be epic.
So they use FTP and files as an RPC mechanism. What happens when you accidentally overwrite files? How does sequencing happen? Do they use timestamps on the files?<p>It sorta, kinda makes sense and I can't really deny the simplicity of the whole scheme.
I too was in finance. Had to write ACH processing for loan payments and collection. No fun. However, there are plenty of docs from the Fed. No test systems tho :(. I think I'll go look for some of my old ACH code just for fun.
Is there no getting around debiting party A into your own account, then crediting party B from your own account?<p>Is it not possible to initiate a direct payment from A to B?
"documentation explaining the ACH system is targeted towards bankers, not software developers."<p>The ACH system itself is designed for the benefit of bankers, not developers, or even depositors.<p>Bitcoin alleviates the need for the excesses of the described system.