ACH Finally Catches & Passes Check Clearing … or Will It?

The other day a friend was telling me about how he ordered a lens for his camera via Amazon at 10am in the morning, and had an Amazon truck in his driveway at 3:30pm that afternoon. We used to be astounded by 48-hour delivery, and now the “click”-to-doorstep duration is only a little longer than the average baseball game.

So, in line with that level of service, we should expect real-time or at least same-day payments any week now in the United States, right? While various countries in Europe and East Asia are accustomed to instantaneous availability of funds to a depositor, that’s not going to happen in the United States for some time.

“We’ll see a lot of different projects that move us toward the direction of real-time payments, but we’re not likely to see this system in our life time,” says Peter Ehmke, partner, chief financial officer, and head of North America, at Edgar Dunn & Co., an international consulting firm with payments expertise. “We will not see a movement where the whole industry comes together to build one central, faster payments hub, as was done in other countries.”

It’s interesting that industry experts tend to try to illustrate a slow payment by comparing any type of new payment to the check, and by exaggerating the clearing process as in a “two-day wait” for a check to clear. Last time I went to the bank, it was either same day (on-us), or next day… but that’s besides that point.

NACHA’s Same Day ACH program shows progress is being made. The website shows great information related to the impact of a Same Day ACH to the ODFI and RDFI. As you can see in the article, it is optional. So we’ll see about ramp-up time, getting the kinks out, obvious training time, and incremental fees to absorb.

The vision of incremental change to the industry is coming to fruition slowly but surely. However, all existing payment types will remain viable and will compete in the space as they have for the past 10 years…