The ACH Payment Processing System

Paper Summary:

The paper explains what is meant by ACH System, how it works, its advantages and disadvantages. The paper also discusses how the U.S. Payment System has been affected by the new ACH System. Further, the paper includes a discussion about the past, the present, and the future of the U.S. Payment System.

From the Paper:

"If the same customer were to authorize an electronic debit to their account, then the transfer of the funds would be carried out electronically, and this is what is known as the Automated Clearing House or the ACH transfer. However, whatever may be the innate advantages, there are a few things to be remembered at the outset, and these are: the money would not be transferred immediately; rather the transaction would proceed as if the customer did indeed have a valid physical account with the necessary funds available in his account, and it may take up to two or three days, and four at the most, to obtain information that the transaction has been accomplished. Secondly, there is no guarantee that the money is paid; and this can be quite risky when dealing with strangers or in cases where payment is expected immediately."

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