The Planet Money podcast has a great summary of the topic I was frustrated and grumpy over about 15-months ago, the US Payments clearing system, known as the Automated Clearing House. which I discussed in a follow-up comment to this post.
Except, they really didn’t get to the bottom of the problem. I wrote in a comment on their facebook page, here, but figured I’d post my comment here as well.
“I was excited to hear this and actually set aside time to do it via the podcast. Your description of the problems and the explanation of the ACH was right on the “money” but then you let it slip through your hands.
Yes, the US System has a scale issue compared to the UK. But does the US system have problems with credit cards? No. Which is a much, much larger scale. The difference is with credit cards the banks are lending us money, with bank payments they already have our money so it’s in their interest(pun intended) to make it hard for us.
You really dropped the ball when you got to the end of the piece and discussing local banks. It’s as if you accepted that local banks and financial institutions don’t have computerized records, they still pay people to write entries and process checks using ledgers.
Please consider doing a follow up show. I’d be happy to contribute, I have a ton of knowledge and background, I was part of the first online banking project, Pronto at Chemical Bank in the early 1980’s where even then we were complaining about the way the ACH was implemented. I went on to work at IBM, for whom I taught COBOL programming as part of a workshop in Atlanta for college graduates… I can also explain how COBOL is not really needed anymore and why that is to a degree another fallacy foisted on you/us by the banking industry as a reason they can’t change.”