Converging Wire Transfer and Automated Clearing House (ACH) to Revolutionize U.S. Electronic Wholesale Payments

Report Summary

Converging Wire Transfer and Automated Clearing House (ACH) to Revolutionize U.S. Electronic Wholesale Payments

Aite Group concludes that the U.S. payments industry could save US$7 billion per year if the ACH and the wire transfer systems were converged into a single electronic wholesale payments system.

Boston, MA, January 8, 2007 – A new report from Aite Group, Converging Wire Transfer and Automated Clearing House (ACH) to Revolutionize U.S. Electronic Wholesale Payments, advocates replacing the existing Automated Clearing House (ACH) and wire transfer systems with a single electronic wholesale payment system. Converging the wire transfer and ACH systems will provide optimum payments capabilities and services, significant cost savings, and revenue-generating opportunities. The report examines market factors and initiatives that suggest that now may be the time for this investment for the future of the U.S. payments system.

"Financial institutions typically maintain both ACH and wire transfer systems, and in many cases, they maintain multiples of these systems as a result of mergers and acquisitions," says Nancy Atkinson, senior analyst with Aite Group and author of the report. "Because of this, participants throughout the entire payments industry are incurring meaningful expenses that could be reduced through the adoption of a single electronic payments system. There are currently compelling market factors and industry initiatives that are pointing the way toward systems consolidation in the U.S. payments industry."

While Aite Group is challenging conventional wisdom, it recognizes that evolutionary change may be more realistic than its revolutionary position. Therefore, this report outlines iterative steps and alternatives to improve the current electronic payments environment without eliminating existing systems.

The following companies are mentioned in the report: ACI Worldwide, Alaric, American Express, the Association for Payment Clearing Services (APACS), BACS Payment Schemes Limited (BACS), BankServ, Bottomline Technologies, CheckFree, the Clearing House Automated Payment System (CHAPS), the Clearing House Interbank Payment System (CHIPS), Clear2Pay, Discover Financial, Dovetail Systems, eFunds, the Electronic Check Clearing House Organization (ECCHO), the Electronic Payments Network (EPN), the Federal Reserve, Fiserv, Fundtech, Immediate Payments Limited, Link Interchange Network Ltd. (LINK), MasterCard, Metavante, the National Automated Clearing House Association (NACHA), Oracle, PayPal, SAP, the Society for Worldwide Interbank Financial Telecommunications (SWIFT), The Clearing House, Vicor (a Metavante company), Visa, Voca Limited (Voca) and Xign.

This 21-page Impact Note contains 6 figures and 4 tables. Clients of Aite Group's Wholesale Banking Service can download the report by clicking the icon to the right.

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