ACH has handled trillions of dollars in transactions, including payroll and e-commerce, for many decades in the United States. Now, however, it faces the challenge of evolving to incorporate a new approach to transactions and authentication.
The ACH of the very near future will not only be more secure, but it will also be much faster. Instead of waiting for “once a day” ACH clearance, it will be possible to authorize and move forward on ACH transactions several times a day.
Back in late 2014, NACHA, the professional association that handles U.S. ACH strategy, grew committed to long-term plans to improve ACH technology for businesses around the country.
Now, the U.S. Federal Reserve has made comments related to the ACH modernization.
It’s very important that the Federal Reserve be on the same page with NACHA, since the U.S. federal government is by far the largest single user of ACH when it comes to payroll.
ACH actually has its origin in the federal payroll system, and was used mainly for paying U.S. servicemembers abroad for the first few decades of its existence.
The Federal Reserve, of course, is one of the most influential federal players in finance.
NACHA had proposed the possibility of an 8.2% transaction fee that would pay for the overall costs of ACH modernization. At this time, comments for the proposal are still coming back on a regular basis.
The Federal Reserve joins several trade associations in opposing the fee.
While it is still too early to know exactly how NACHA will respond to the concerns, it is obvious that most of the prime actors in the ACH world want to make sure that it maintains privileged status as a low cost alternative to ordinary payment cards.
It appears that low cost will remain one of the principal value propositions of ACH, which makes it both convenient and affordable for enterprises of all sizes.
This is especially important in the evolving technological landscape of today, when more and more technologies are being revealed as vulnerable.
In order to hedge against the possibility of increased fees in the future, however, it is a good idea to ensure an enterprise works with an ACH payment processor that can provide low-cost access to the ACH network.
A quality processor will be vital to getting all possible benefits from speed increases in the future.
Posted in ACH on Mar 10, 2015