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ACH (Automated Clearing House)
An article for understanding the work of the translation system in the United States, relevant for those who are engaged in self-registration.
How do Americans transfer money?
First of all, I would like to note that ACH payments account for about 85-90% of all payments that take place within the country. This is the cheapest and most popular way to transfer money to the United States. If the holder receives a Direct Deposit salary, then this is done through the ACH. If the holder sets monthly payments to his insurance company, then they also go through the ACH. If he wants to transfer part of the money from his current account to a brokerage account or to a trading company, then the funds will also go through the ACH. Anyway, all the Bill Pay that the average American makes at least a dozen every month go through the ACH. ACH is wherever there is cash flow.
That is why the ACH topic was and remains relevant for the bays. This is the most popular type of translation. A lazy and greedy American will not rush to part with his hard-earned 25 bucks and make a wire. Rather, he will say to himself: "Let the translation take 1-2 days longer, but I will do it for free." And from this point of view, ACH payments seem to me less suspicious and attract less attention from the SB and bank employees.
Recently, more and more often I hear from drop organizers that they want a wire payment for their drop. I quite understand their desire to get the transfer as soon as possible and not fire up the drop, because, in their opinion, a quick transfer is the key to success. But at the same time, they do not know or forget that in the USA there are a few banks that allow making wire payments on-line and, as a rule, these banks are delayed so much that any wire makes bank employees want to call the holder and almost do not take a stool test from him by phone.
In other banks, wire payments are available in the old fashioned way: the holder must stomp into the branch and make a transfer in person. Or he can request to make a wire in the telephone mode, but before that he still has to visit the branch, sign the agreement and receive a code for telephone transactions. But almost all financial institutions allow making ACH payments on-line, and here we have a wider field of activity.
However, we often encounter the situation that ACH payments in some places are slower than in others. For example, an ACH payment from Fidelity to Chase can come the next day, but from BOA it can come in 2 or 3 days. In some places it takes 3 and more days. I remember a case when we made a transfer from AlaskaUSA to a bank and it arrived in 5 banking days, and in fact in a week. Let's see why this is happening.
ACH supports both types of payment transactions - credits and debits. We can ask one bank to transfer money to another bank (credit) or we can ask a second institution to receive money from the first (debit). Whatever the type of credit-ACH or debit-ACH transfer, the institution where you request the ACN transfer becomes the initiator and is called the Originating Depository Financial Institution (ODFI). And the institution on the other side of the transfer is called Receiving Depository Financial Institution (RDFI).
When requesting a transfer, ODFI must be sure that it is authorized to credit or debit another account. Therefore, sometimes a financial institution may ask us to fill out some form, and in addition also verify that second account (for example, with mini-deposits). With Bill Pay, the second account (recipient's account) is already, as it were, automatically authorized, because the payment goes to a well-known company. And for person-to-person payments, additional authorization is required.
Now about the timing. Remember! RDFI always requires an account to be credited or debited on the same day specified by ODFI. And theoretically, the payment must go through and is carried out by the ACH system within one day, that is, the payment must arrive at RDFI no later than the next day. Even if you sent the payment late in the evening, after the "cutoff time", ACH will process your payment late in the evening and the next morning you should see it in your RDFI account. Therefore, if the payment takes longer than one day, then it is not the fault of the ACH system, and not the fault of the receiving RDFI institution, but the fault of the sending ODFI institution.
Why does it sometimes take two days, three days, or even longer in some cases? This could be because your payment institutions are using a third party rather than doing so directly through the ACH. The third party debits first. It takes one day. Then the third party receives money from ODFI and sends the loan to RDFI the next day. With this ACH scheme, the payment will take at least two days.
Another delay may be because ODFI does not send the request on the same day that you initiate the payment. The bank is withholding your request for several days.
There are several reasons why they are withholding your request. First, for risk management. If during this period the holder discovered an unauthorized transfer request and he reported to the bank, then the money has not actually left. Secondly, in terms of sending time, ODFI can assign itself a bonus for a faster transfer. The bank can offer you to make a "slow" ACH absolutely free of charge, and ask for additional money for a "fast" ACH. So, for example, BOA does: they charge $ 10 for the "next day" ACH, and the standard payment for 3 days is free.
An article for understanding the work of the translation system in the United States, relevant for those who are engaged in self-registration.
How do Americans transfer money?
First of all, I would like to note that ACH payments account for about 85-90% of all payments that take place within the country. This is the cheapest and most popular way to transfer money to the United States. If the holder receives a Direct Deposit salary, then this is done through the ACH. If the holder sets monthly payments to his insurance company, then they also go through the ACH. If he wants to transfer part of the money from his current account to a brokerage account or to a trading company, then the funds will also go through the ACH. Anyway, all the Bill Pay that the average American makes at least a dozen every month go through the ACH. ACH is wherever there is cash flow.
That is why the ACH topic was and remains relevant for the bays. This is the most popular type of translation. A lazy and greedy American will not rush to part with his hard-earned 25 bucks and make a wire. Rather, he will say to himself: "Let the translation take 1-2 days longer, but I will do it for free." And from this point of view, ACH payments seem to me less suspicious and attract less attention from the SB and bank employees.
Recently, more and more often I hear from drop organizers that they want a wire payment for their drop. I quite understand their desire to get the transfer as soon as possible and not fire up the drop, because, in their opinion, a quick transfer is the key to success. But at the same time, they do not know or forget that in the USA there are a few banks that allow making wire payments on-line and, as a rule, these banks are delayed so much that any wire makes bank employees want to call the holder and almost do not take a stool test from him by phone.
In other banks, wire payments are available in the old fashioned way: the holder must stomp into the branch and make a transfer in person. Or he can request to make a wire in the telephone mode, but before that he still has to visit the branch, sign the agreement and receive a code for telephone transactions. But almost all financial institutions allow making ACH payments on-line, and here we have a wider field of activity.
However, we often encounter the situation that ACH payments in some places are slower than in others. For example, an ACH payment from Fidelity to Chase can come the next day, but from BOA it can come in 2 or 3 days. In some places it takes 3 and more days. I remember a case when we made a transfer from AlaskaUSA to a bank and it arrived in 5 banking days, and in fact in a week. Let's see why this is happening.
ACH supports both types of payment transactions - credits and debits. We can ask one bank to transfer money to another bank (credit) or we can ask a second institution to receive money from the first (debit). Whatever the type of credit-ACH or debit-ACH transfer, the institution where you request the ACN transfer becomes the initiator and is called the Originating Depository Financial Institution (ODFI). And the institution on the other side of the transfer is called Receiving Depository Financial Institution (RDFI).
When requesting a transfer, ODFI must be sure that it is authorized to credit or debit another account. Therefore, sometimes a financial institution may ask us to fill out some form, and in addition also verify that second account (for example, with mini-deposits). With Bill Pay, the second account (recipient's account) is already, as it were, automatically authorized, because the payment goes to a well-known company. And for person-to-person payments, additional authorization is required.
Now about the timing. Remember! RDFI always requires an account to be credited or debited on the same day specified by ODFI. And theoretically, the payment must go through and is carried out by the ACH system within one day, that is, the payment must arrive at RDFI no later than the next day. Even if you sent the payment late in the evening, after the "cutoff time", ACH will process your payment late in the evening and the next morning you should see it in your RDFI account. Therefore, if the payment takes longer than one day, then it is not the fault of the ACH system, and not the fault of the receiving RDFI institution, but the fault of the sending ODFI institution.
Why does it sometimes take two days, three days, or even longer in some cases? This could be because your payment institutions are using a third party rather than doing so directly through the ACH. The third party debits first. It takes one day. Then the third party receives money from ODFI and sends the loan to RDFI the next day. With this ACH scheme, the payment will take at least two days.
Another delay may be because ODFI does not send the request on the same day that you initiate the payment. The bank is withholding your request for several days.
There are several reasons why they are withholding your request. First, for risk management. If during this period the holder discovered an unauthorized transfer request and he reported to the bank, then the money has not actually left. Secondly, in terms of sending time, ODFI can assign itself a bonus for a faster transfer. The bank can offer you to make a "slow" ACH absolutely free of charge, and ask for additional money for a "fast" ACH. So, for example, BOA does: they charge $ 10 for the "next day" ACH, and the standard payment for 3 days is free.