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Friday, October 24, 2014

United States of America to embrace Real Time Payment Systems


            40 years ago, the first step towards electronic payment transactions was taken by USA Financial Sector.

            Over the years, the USA’s ePayment system known as ACH (Automated Clearing House) has grown to handle a huge number of transactions.

             Through the ACH Network funds can be electronically credited or debited to a checking (Current account in India), savings accounts, financial institution general ledger account (Inter-Bank transaction in Indian terminology) or credit to a loan account.

            The ACH Network is a batch processing, store-and-forward system. Transactions are stored by financial institutions throughout the day and processed at specified times in a batch mode.

            The main disadvantage of Batch Mode is that the transactions are not done in real-time but done with a lag in time.

            Yes, USA Citizens have not yet enjoyed the joy of Real-Time Payment Systems.

At present, real-time payment systems are present in 35 countries, and some of those real-time systems are more than 40 years old.

            Realizing the benefits of real-time payemnts system, the USA Fed has embarked on a mission to introduce real-time financial transactions to the USA citizens.

            The exercise is expected to last for a few years, as it is a complicated task to introduce real-time financial transactions to Americans.

            A basic version of Real-Time Payment System functions in USA, under the brand name FEDWIRE.

            

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