The chance of collecting would be made significantly higher, and since the collection rates for electronic transactions are considerably higher, about 50% higher, to be precise than transactions on paper, it would only be more practical to take measures that would reduce this burden. The NACHA states that ARC transactions would require the biller to store a copy for a period of two years, and destroy the original document, and the reason for this is that it would be easier for them to carry out electronic transactions in the future. The ACH method offers immense benefits to billers too, and some of these are: check processing costs would be greatly reduced if there were no checks to present, the availability of funds would also be greatly improved, and these funds would be higher than ever before. Return items would be handled much faster and also with much more ease, and at the same time, consumers would be able to continue to write their checks. (New Dawn for U.S. Payments)
The payment systems in the U.S.A. is today evolving into an entirely universal and sophisticated system wherein innovations in payment systems have become the norm, and the more creative and innovative the idea, the better it would be for all involved. In fact, it is quite obvious that the latest methods of payment systems are the basis of the development of the new e-economy today. This is true in both retail and in wholesale areas, and new technologies, new players, new participants, and new payment systems are all transforming and changing the U.S. payment system beyond recognition. The result is often world wide, and one example is that the distinction between wholesale and retail has now become diminished and blurred, especially when large dollar payments are made through the ACH methods. In addition, there is an increasing blurring of the difference and the distinction between the domestic and the international flow of money, and now efforts are being made to create and to develop a cross-border type of ACH network of payment systems. (Payments and Settlement Systems, Future players and issues)
The latest development today as far as new methods of money transfers are concerned; 'nonbanks' have become the latest new trend. Most of the time, banks remain at the forefront of money transactions and movements, like for example, seen in the credit card usage over the Internet, but more often today than not, banks have been relegated to the background, as seen in the example of Paytrust and in Checkfree, both two different methods of electronic payment systems. In order to make an accurate assessment of the ways and means by which a change can be affected in the method of payments, one must remember to start off with an assessment of the various different goals of the public. Therefore, one must try to understand that whatever is the method of payment, the general public will expect any payment system to possess three basic characteristics, and these are: it must have a basic integrity, it must, in other words, be safe and secure, and also reliable at the same time.
Next, it must be available at all times, with ease, to everybody who may need it. The third factor is that it must be efficient, and this means that the cost of the transaction must not be very high, and must work well for the user. The hitch herein is that the existing modes of payment systems all possess all the three basic characteristics that the public may want to see in a transaction system, and if ACH is to be implemented, then it must keep with the norms that the public may demand, while at the same time trying to make it cost effective. (Payments and Settlement Systems, Future players and issues)
According to a study, the Reserve Bank has been dominating the ACH market, ever since its inception. The reason for this phenomenon may be that the various policies that were propagated by the Board may have been quite discouraging of private sector competition, and this may have become the major contributing factor towards the growth of the Reserve Bank, because of the fact that it not only curtailed the growth opportunities for PSOs, but also managed to serve as important deterrents to the several new entrants to the ACH market. (Fair Competition in the Automated Clearing House Clearing System: A Private Sector ACH Operator Perspective Electronic Payments Network)
It can be summarized that the U.S.A. has in fact entered a New Era, one in which there is a significant decrease in the use of paper checks, and where there has been a steep increase in the use of electronic money transfer systems, some of which are the credit card system, the ACH, and so on. In addition, the participants of the payment systems are changing as well, as for example, non-banks, which are becoming even more important and prominent, by moving form the background to the foreground where they play an active part in the payment system of today. The environment in which the payment systems operate is changing too, as seen in the case where Wal-Mart issued a lawsuit against Visa and MasterCard. (a New Era) Therefore, it can be said that the payment system in the U.S. is changing, and soon ACH systems will have their day.
ACH Electronic Paying Processing. Retrieved at http://www.ach-payments.com/. Accessed on 12 March, 2005
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Fair Competition in the Automated Clearing House Clearing System: A Private Sector ACH Operator Perspective Electronic Payments Network. December 18, 2002. Retrieved at http://www.epaynetwork.com/infofiles/EPN_Fair_Competition_in_ACH_12_2002.pdf. Accessed on 12 March, 2005
Haitema, Marcie; Taylor, Colleen. New Dawn for U.S. Payments. Retrieved at http://www.jpmorgan.com/cm/BlobServer?blobtable=Document&blobcol=urlblob&blobkey=name&blobheader=application/pdf&blobwhere=jpmorgan/cash/pdf/thetreasurer.pdf
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Hoenig, Thomas M. Payments and Settlement Systems, Future players and issues. BAI Money Transfer 2000 Conference.
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