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If checks, a payment method that's hundreds of years old, can be updated for the Internet age, why can't America's four-decade-old electronic payments system? It's not for lack of trying.
November 13 -
The central bank is making clear it has doubts about the private sector's ability to implement a faster electronic payments system on its own.
November 15 -
As a fast, low-cost payment system, Bitcoin provides healthy competition for legacy banks. It's also a bulwark for financial privacy and freedom of speech.
November 18
In response to Kevin Wack's blockbuster two part series, which described
Dear Editor:
American Banker's two-part story on NACHA's Expedited Processing and Settlement (EPS) ballot ("
How Big Banks Killed a Plan to Speed Up Money Transfers ," Nov. 13; "Message to Banks: Speed Up Payments or Fed Will Take Charge ," Nov. 15) missed the elephant in the room: NACHA and the industry want faster processing and are working to make it happen in a way that is a win-win for all participants and users of the ACH network.The [automated clearing house] network has been in a state of constant change and growth over the past 40 years. What started as a system to enable payroll for the U.S. Air Force, today moves 80 million transactions per day. This growth and development are the result of the industry coming together collaboratively to serve the needs of consumers, governments, businesses and financial institutions that move their money via ACH.
Advancing the payments system through faster processing and settlement is a shared goal of the industry and part of current network evolution. However, as your article pointed out, the industry, including both large and small financial institutions, "registered a number of objections" to the EPS proposal as it was balloted.
Today, NACHA is working with the industry and other stakeholders to find a ubiquitous solution that achieves the right balance among all participants. Change is required by all if we are truly to create a solution to be valued by all, and NACHA is leading a process that engages the industry at large to drive toward a collective vision and objective.
This is the beauty of how private-sector rulemaking works. We engage, we advance, and we adapt to move the industry forward.
Sincerely,
Jan Estep
President and CEO, NACHA
The industry as a whole may want faster payment processing, but the biggest banks still appear to be in no hurry to make it happen. Wack reports today that The Clearing House, which represents the industry's Goliaths, has laid out a list of
The Clearing Housepaper argues that any industry-wide modernization plan needs to generate a reasonable return on the banks' investment spending not just in the long term, but also in the nearer term. "The business case needs to be staged to produce net benefits, as feasible, at each phase of deployment, instead of front-loading costs and back-loading benefits," the document states.
Some Fintech Twitterati were skeptical:
@MarcHochstein @dgwbirch @jonmatonis @AmerBanker @kevinwack translation Lets find another excuse to avoid IT spend & modernization"
Brett King (@brettking) December 5, 2013
@MarcHochstein translation - we'll innovate if we have a guaranteed short-term return
Jason Marshall (@__JasonMarshall) December 5, 2013
@brettking @AmerBanker @MarcHochstein @dgwbirch @jonmatonis Banks fearful of betting on future visions. Bets don't have to be sure things.
Paul Kadin (@pkadin) December 5, 2013
How strong is the business case for same-day or real-time money transfers in the U.S. (which are
Marc Hochstein is the executive editor of American Banker. You can follow him on Twitter at