Payment Systems in US

As for the Retail payment system, the “Automated Clearing House” (ACH) handles small value payments in the US. The ACH is a nationwide electronic file transfer mechanism that processes the retail credit and debit transfers between the customer accounts. The Federal Reserve is the largest ACH operator in the US. Meanwhile, the TCH Payments Co. is a private-sector operator of ACH. As for the ACH payments, the settlements are made between the sending banks and receiving banks only on the next day of the processing on a net-basis. That means that the ACH is a Designated-Time Net Settlement (DTNS) system. The function of the “FedGlobal ACH” and “Financial EDI” capability on the ACH network is also discussed.