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ACH (Automated Clearing House)
An excellent article for understanding how the transfer system works in the USA, relevant for those who are engaged in self-registration of PayPal.
How do Americans transfer money?
First of all, I want 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 in the USA. If the holder receives a Direct Deposit salary, then this is done through ACH. If the holder sets up monthly payments to his insurance company, then they also go through ACH. If he wants to transfer part of the money from his current account to a brokerage account or a trading company, then the funds will also go through ACH. And in general, all Bill Pay, which the average American makes at least a dozen times every month, go through ACH. ACH is everywhere where there is movement of funds.
That is why the topic of ACH was and remains relevant for the bays. This is the most popular type of transfer. 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 transfer take 1-2 days longer, but I will do it for free." And from this point of view, ASN payments seem less suspicious to me and attract less attention from the Security Service and bank employees.
Recently, I have been hearing more and more often from droppers that they want a wire payment to their drop. I can understand their desire to quickly receive the transfer and not expose 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 limited number of banks that allow you to make wire payments online and, as a rule, these banks are so screwed that any wire makes bank employees want to call the holder and almost take a stool sample from him over the phone.
In other banks, wire payments are available the old-fashioned way: the holder must go to the branch and make a transfer in person. Or he can request to make a wire by phone, 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 you to make ASN payments online, and here we have a wider field for activity. However, we often encounter a situation where ASN payments in some places are slower than in others. For example, an ASN 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 days or more. I remember a case when we made a transfer from AlaskaUSA to some bank and it came in 5 banking days, but in fact in a week. Let's figure out why this happens.
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 the second institution to receive money from the first (debit). Whatever the type of transfer, credit-ACH or debit-ACH, the institution where you request the ACH 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 the Receiving Depository Financial Institution (RDFI).
When requesting a transfer, the 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 a form, and in addition to verify the second account (for example, mini-deposits). With Bill Pay, the second account (the recipient's account) is already automatically authorized, because the payment goes to a well-known company. And with person-to-person payments, additional authorization will be required.
Now about the terms. Remember! RDFI always requires the account to be credited or debited on the same day as specified by ODFI. And theoretically, the payment should be cleared and posted by the ACH system within one day, i.e. the payment should arrive in RDFI no later than the next day. Even if you sent the payment late in the evening, after the "cutoff time", then the ACH will post your payment late in the evening and the next morning you should see it in the account in RDFI. So if the payment takes longer than one day, it is not the fault of the ACH system, and not the fault of the receiving RDFI institution, but it is the fault of the sending ODFI institution.
Why does it sometimes take two days, three days, or even more in some cases? It may be because your payment institutions use a third party, and do not do it directly through the ACH. The third party debits first. This takes one day. Then the third party receives the money from ODFI and the next day sends a credit to RDFI. With this ACH scheme, the payment will take at least two days.
Another reason for the delay is that ODFI does not send the request on the same day you initiate the payment. The bank holds your request for several days.
There are several reasons why they hold your request. First, for risk management. If during this period the holder detects an unauthorized transfer request and he reports it to the bank, then the money has not actually left yet. Second, by operating with the sending time, ODFI can set a premium for itself 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. For example, this is what BOA does: they charge $10 for a “next day” ACH, and a standard payment within 3 days is free.