Check 21 vs ACH

Let's compare Check21 and ACH clearing times.

The electronic ACH system is designed to be float neutral, not float-less. As a float-neutral system, ACH transactions are future-dated to allow all of the parties an opportunity to post them on the same day. Under the ACH rules, the earliest that most ACH transactions can be posted is the next business day after origination. Checks, on the other hand, suffer no such restrictions and can be collected as fast as they can be presented.

Many paper checks are currently cleared on the same day that they are deposited through evening exchanges around 9 p.m. Generally, if all of those same-day checks were converted to ACH transactions, they would not clear for at least one day and many would not make the application cut-off on the deposit day and so would not be originated until the second day, for clearance the third day. In this scenario, paper is much faster than electronics.

By contrast, the application of electronic check processing and image can accelerate the number of items that can be cleared the same day with exchange cut-offs beyond 9 p.m. The technology of check images can be much faster than either traditional paper check collection or other electronic check conversion options available to banks.