I've done a lot of thinking in this area, mostly a few years ago when we were starting kraken.com but also ongoing.<p>Though the US ACH system is a particularly bad case, as others have pointed out it affects credit cards, and to a lesser extent cryptocurrencies too, and it's a global problem.<p>The solution is to build systems that objectively consider the real properties of these settlement networks, known or inferred, before committing to transactions.<p>This allows, for wont of a better term, a 'free market' in financial services that should act to increase efficiency and reduce overheads/latency worldwide by incentivising financial services companies to be more objective and transparent in their dealings.<p>Now: <i>[forced to accept legalese at your bank]</i> <i>[try to do something at your bank]</i> <i>[wallow in pain and self-pity as they fail to either do anything or communicate about the flailing process]</i><p>Future: (with plugin support for arbitrary cryptographic protection, financial endpoint identification and entity identification/reputation systems) <i>[send RFQ]</i> <i>[receive quotes on what you want to do, including temporal and cost overheads, references, jurisdiction information, intermediate path details, asset-types/currencies supported]</i> <i>[select a quote based on your local priorities, risk profiles, etc.]</i> <i>[execute and manage state versus promised progression with incremental status updates]</i><p>If anyone else believes this is generally logical I'd love some feedback on <a href="http://ifex-project.org/" rel="nofollow">http://ifex-project.org/</a> ...<p>The only thing I see sort of remotely in this space right now is high end logistics solutions, of the type probably employed by SAP customers, global courier companies and places like Amazon's global warehousing.
Good read. The most interesting fact to me was that it takes 3 days to 100% confirm a transaction.<p>I thought bitcoin was slow, but this really gives me hope.
The details you provide are especially interesting, especially in light of PayPal's announcement yesterday of their Next-Day-Settlement (NDS) service: <a href="http://thenextweb.com/insider/2014/07/08/paypal-now-lets-us-firms-bypass-4-day-waits-transfer-money-bank-accounts-24-hours/" rel="nofollow">http://thenextweb.com/insider/2014/07/08/paypal-now-lets-us-...</a><p>NDS must be a proprietary alternative to ACH.<p>Thanks for this write-up. Looking forward to your next post on the ACH file format.
It's interesting how the incentives are misaligned for the two banks. The receiver wants to wait as long as possible before returning a REJECT, because returning earlier doesn't benefit them, and in fact can hurt the customer experience.<p>My bank will send me a warning that an ACH is pending, and I need a certain amount in the account by 10am the next morning. That's plenty of time to move funds into place from a neighboring account (as long as it doesn't involve selling shares). And on the other hand, it's an interesting benefit that the requester of the debit doesn't see this happening.<p>I think the solution is an explicit ACK. We could add an optional pingback url as part of each transaction message, and let everyone else deal with building the infra.<p>I have a feeling it's a lot more complicated than that. $39 trillion a year is a lot of transactions to track live status for, so I suspect this is both complicated and valuable.<p>What the heck NACHA -- impress us with your ability to build the next gen ACH system! Oh right, unless we're talking a physical structure, that's never going to happen.
"the RDFI is allowed 60 days to return the ACH debit. Because of this, the ACH protocol is very consumer friendly, since the originator of the ACH debit must now return the money they debited"<p>Well, consumer-friendly if the consumer has enough money in their account to temporarily cover the unauthorized debit amount plus any other authorized debits/withdrawls that occur in the meantime. But if the ODFI's do their homework to keep fraudsters from getting accounts, I suppose that issue is minimized.
Good Read for non-developers.<p>Best resource is official NACHA Rule Book - must read for any payments/ach developer.<p><a href="http://www.metcapbank.com/2013_Corporate_Rules_and_Guidelines.pdf" rel="nofollow">http://www.metcapbank.com/2013_Corporate_Rules_and_Guideline...</a>
In the case of a debit, say, is the account receiving the money always the ODFI? Can you do an ACH transfer from one client’s account at bank A to another client’s account at bank B, with you using a third financial institution to process this?
I'm interested in two things:<p>1. What would happen if ACH was fully guaranteed minus chargebacks instantly? What is that worth?
2. What would it be worth if ACH was fully guaranteed instantly PERIOD - including chargebacks? What would that be worth?