Even payment platforms like Venmo largely rely on ACH transfers behind the scenes, explains Walia.įor example, if you don't have enough money in your Venmo account to send money to your friend to split a dinner bill, you could still initiate a transfer through your linked bank account. "For most people, it feels like that sort of happens invisibly, but it's a very essential pillar of the US banking ecosystem."ĪCH transfers can be used to make all sorts of payments, such as for companies moving money from business bank accounts into employees' personal accounts via direct deposit, as well as individuals transferring money from one bank or credit union account to another. They can be used for international payments to and from US accounts, but other countries also have separate transfer networks.ĪCH transfers are "part of a long-established, well-oiled machine that moves money from one bank account to another," says Ruby Walia, senior advisor for digital banking at Mobiquity, a digital consultancy. What is an ACH transfer?ĪCH transfers electronically move money among bank accounts through the Automated Clearing House Network in the US. But ACH transfers remain a crucial part of the financial system. There are other means of moving money, like wire transfers and the RTP (real-time payments) network. While all this may seem like one of the marvels of modern technology, in many cases, behind the scenes, you're using a decades-old system known as ACH transfers. And on payday, you can have your employer route the money straight to your account, eliminating the hassle of paper checks. Now your monthly bills can be paid automatically without having to do a thing. With the touch of a button, you can transfer funds from your bank to a friend's account. Moving money between people and companies in the 21st century has become an almost seamless process.
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