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Comment by dylan604 | Hacker News Reader

Why in the world does ACH take so damn long to complete? Do the electrons move slower in the ACH network? I make a request to purchase, the funds availability in my account are verified, the withdrawl is requested, then, waiting, waiting, waiting. Why? This is the area I would love to see "distrupted". Force the banks to honor the requests in order they are received (not in the order they choose that is most lucrative to the bank). If a transfer request comes in for a value greater than my account has, decline the transfer.

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> Why in the world does ACH take so damn long to complete?

An ACH transaction is literally FTP and text files. If you can find a way to get rid of millions of lines of COBOL you can probably disrupt this.

This is the most spot on post ever. The amount of stuff in the world that relies on old, tried and true "a file appears in a directory somewhere overnight and is processed the next morning on 'the other side'" method is probably staggering. But most people nowadays don't know or understand this at all, as they've never been exposed to this. And why would they ever be. And all the fixed column width stuff as well and delimiter based import/exports.

Heck I've had to fix one of these things where it suddenly started failing the overnight transfers and when I went to check why it was because a fricking musician had named their song to include the delimiter used in one of those...

> a fricking musician had named their song to include the delimiter used in one of those

Paul McCartney’s “Pipes of Peace”?

Yes, it's a complex problem. Yes, mythical man month, etc. But US banks over the last several years have averaged a quarter trillion dollars per year in profit.

They just have very little incentive to change things. In the meantime, they're earning interest on funds.

Then burn it down and do it from scratch as a parallel system. Or buy a system from Europe, we have plenty of different ones to choose from.

It's largely artificial and controlled by the Fed; it can't really be disrupted since you can't replace the Fed (PayPal and Zelle haven't replaced ACH), but they have shaved off a day in recent years and plan to add actual realtime settlement in the next few years. In the meantime, the computers still work business hours and take off weekends for some reason.

> Force the banks to honor the requests in order they are received (not in the order they choose that is most lucrative to the bank).

Didn't this already happen?

> In the meantime, the computers still work business hours and take off weekends for some reason.

They're just making sure they can avoid needing to pay their computers overtime when they get worker's rights. /s

I always just assume it so they earn interest on the money they have withdrawn immediately from the payer's account, yet refuse to deposit into the receiver's account for 3-5 biz days. I don't think I'm being cynical about it. It's the only logical explanation. Computers only working banker's hours is not a logical excuse (while fun to joke about). A phone support person tried to tell me that a human still approves the transactions. Whatever that means, but it's not logical either.

Interest rates have been effectively 0% since the 90s.

> A phone support person tried to tell me that a human still approves the transactions.

This is true in some cases. They do at least have to audit some of them manually and possibly close your account, file SARs, etc, if they don't like you enough.

ACH settlement is getting faster. There's been a big push in the last few years, which will finish March 19, 2021 with three same day ACH settlement windows, and from what I can tell most (all?) ACH transactions under $100,000 eligible for same day settlement, with the remainder settling the at 8:30 AM Eastern the next business day (or future day if future dated).

What services banks and brokerages offer on top of that, can be more limited of course, but that's the state of the system.

I'm amazed that we consider same day, and not sub-second to be an improvement in an electronic system these days.

A problem os fraud. The faster the settlement, the faster money can be stolen.

The fix is to slow it down at the egress, not within the system.

> ACH settlement is getting faster.

I have seen a snail move through my garden at a faster pace. If it were 1992, and all we had were 9600kbps, then I could understand the burst all transactions after hours and then do the settle up over night. Suggesting that they are going to have 3 windows each day for settlement windows is a 1999 solution. That also sounds counter intuitive in that at each of those windows their systems will get slammed with orders to process. If they just let each one settle as they come in, then they would spread the load.

I'm really dumbfounded at how either I'm an idiot and just cannot understand the issue, or at how the rest of the world has been snowed over into believing it is terribly complex and takes decades to make incremental changes.

Not the rest of the world. Canada has fixed it. Interac settlement is 30 minutes max, with a $5000 limit, and interbank transfers are end-of-same-day. This is even assuming you have to change banks: there are only five banks, and they're regionally divided. Settlement in the same bank (and their investment arms!) is 30 minutes, even if the money is going to a different person. I paid for my house with this, and the payment was received before we walked out of the room!

It's only America's payment system that's woefully behind.

EFT's with IBAN are instantaneous too, at least in Turkey

The FedNow system coming online in 2023/2024 will clear transactions within a few seconds. These are just attempts to make ACH faster in the interim.

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