288:"The automated clearinghouse (ACH) system is a nationwide network through which depository institutions send each other batches of electronic credit and debit transfers. The direct deposit of payroll, social security benefits, and tax refunds are typical examples of ACH credit transfers. The direct debiting of mortgages and utility bills are typical examples of ACH debit transfers. While the ACH network was originally used to process mostly recurring payments, the network is today being used extensively to process one-time debit transfers, such as converted check payments and payments made over the telephone and Internet."
160:
while the second clerk from each bank stood outside the table facing the other clerk from the same bank. Each of the outside clerks carried a file box. When the manager signalled, all of the outside clerks stepped one position to the left, to face the next seated clerks. Each clerk outside the table would then hand over the cheques drawn on the bank of the seated clerk who they were now facing, and the inside clerk, in turn, would pay the outside clerk for those cheques in cash.
283:"In 1974, ACH Associations from California, Georgia, New England and the Upper Midwest region formed NACHA within the American Bankers Association. Following that, the initial ACH rules were approved, which made Prearranged Payment and Deposit or Direct Deposit, the first ACH transaction type, effective. By 1978, it was possible for two financial institutions located anywhere in the U.S. to exchange ACH payments under a common set of rules and procedures."
225:: cheques would be sorted by hand according to the first two digits. The cheques would be removed, and each stack sorted into the same dividers by the third and fourth digits. The process was iterated until the cheques were completely sorted. Top Tab Key used a physical mechanism: holes were punched in the top of each cheque representing the values of various digits, and metal keys used to physically move them until sorted.
867:
292:"CHIPS is the largest private-sector U.S.-dollar funds-transfer system in the world, clearing and settling an average of $ 1.5 trillion in cross-border and domestic payments daily. It combines best of two types of payments systems: the liquidity efficiency of a netting system and the intraday finality of a
188:
Cheques drawn on another bank (termed "the issuing bank" or "paying bank") need to be "presented" to the other bank before the deposit bank receives payment to cover the amount credited to the depositor's account. In the absence of the paying bank notifying the deposit bank of the "special clearance"
79:
Cheques came into use in
England in the 1600s. The person to whom the cheque was drawn (the "payee") could go to the drawer's bank ("the issuing bank") and present the cheque and receive payment. Before payment, the drawer's bank would check that the cheque was in order – e.g., that the signature was
184:
For cheques drawn on a customer of the same bank, the bank would, usually on the next business day, ensure that the cheque is in order and debit the account of the drawer, and the cheque would be taken to have been cleared. A cheque is not in order if, for example, the date is invalid, the drawer's
113:
Beginning at 5 pm, a clerk for each debtor bank was called to go to a rostrum to pay in cash to the
Inspector of the Clearing House the amount their bank owed to other banks on that day. After all of the debtor clerks had paid the Inspector, each clerk for the banks that were owed money went to the
108:
In a large room in
Lombard Street, about 30 clerks from the several London bankers take their stations, in alphabetical order, at desks placed round the room; each having a small open box by his side, and the name of the firm to which he belongs in large characters on the wall above his head. From
61:
and normally results in a credit to the account at the bank of deposit, and an equivalent debit to the account at the bank on which it was drawn, with a corresponding adjustment of accounts of the banks themselves. If there are not enough funds in the account when the cheque arrived at the issuing
159:
on Wall Street, New York in 1853. Instead of the slow London procedure in which each bank clerk, one at a time, stepped up to an
Inspector's rostrum, in the New York procedure two bank clerks from each bank all worked simultaneously. One clerk from each bank sat inside a 70 foot long oval table,
163:
Thus several such transactions could be conducted simultaneously, across the oval table. When the manager signaled again, this procedure was repeated, so that after about six minutes, the clerks had completed all their assigned transactions and were back to their starting locations, and holding
171:
was established in the United States in 1913 to act as a central, well-capitalized clearing house. The objective was to prevent the occasional panics, where banks would refuse to accept cheques drawn on banks whose solvency was uncertain. The
Federal Reserve can physically accept and transport
114:
rostrum to collect the money owed to their bank. The total cash paid by the debtor banks equaled the total cash collected by the creditor banks. On the rare occasions when the total paid did not equal the total collected, other clerks working for the
Inspector would examine the
296:." Organized in 1970 by eight New York banks who were members of the Federal Reserve system, CHIPS competes with the Federal Reserve for high value payments. Until 2001, CHIPS settled at the end of the day, but now provides intraday payment finality through a real-time system.
180:
When a bank customer deposits a cheque, which may be drawn on any bank, the bank would credit the depositor's account with the amount of the cheque. However, the amount so credited is "not available" to the depositor until the cheque has been cleared by the paying bank.
220:
As volume grew, more efficient sorting methods were developed. Approaching the 1940s, two popular methods were Sort-A-Matic and Top Tab Key. Sort-A-Matic involved a set of metal or leather dividers numbered 00 through 99, operated to implement a form of
189:
of the cheque, for example, following a request from the deposit bank, the funds become available after the passing of an agreed "clearance period", commonly three business days, when the depositor's account is described as comprising "cleared funds".
83:
Until around 1770 an informal exchange of cheques took place between London banks. Clerks of each bank visited all of the other banks to exchange cheques, whilst keeping a tally of balances between them until they settled with each other. Daily cheque
80:
that of the drawer, that the date was valid, that the cheque was properly set out, etc. Alternatively, the payee could deposit the cheque with their own bank who would arrange for it to be presented to the issuing bank for payment.
96:, established in London in the early 19th century. It was founded by Lubbock's Bank on Lombard Street in a single room where clerks for London banks met each day to exchange cheques and settle accounts. In 1832
185:
signature is not like the one held by the bank, the wrong number of signatories have signed the cheque, etc. There must also be sufficient cleared funds in the account before the drawer's account is debited.
259:
or other device, and attach the image to a deposit. The deposit bank would use the cheque image in the normal electronic clearance process, though in this case MICR data would not be available.
255:
made it possible for businesses and bank customers to deposit cheques without delivering them to their own banks. In the process, a depositor would make an image of the physical cheque with a
53:
is drawn to the bank in which it was deposited, usually accompanied by the movement of the cheque to the paying bank, either in the traditional physical paper form or digitally under a
109:
time to time other clerks from every house enter the room, and passing along, drop into the box the cheques due by that firm to the house from which this distributor is sent.
38:
164:
exactly the amount of cash their papers said they should be holding. Clerks were fined if they made errors and the amount of the fine increased rapidly as time passed.
192:
If the cheque is not in order, or if there are not enough cleared funds in the account when the cheque arrived at the issuing bank, the cheque would be returned as a
231:(MICR) was developed and commercialized in the 1950s, and enabled computers to reliably read routing and account numbers and automated the sorting of paper cheques.
148:
opened the first clearing house in 1818 in Boston, and one was incorporated in New York in 1850. A clearing house for bankers was opened in
Philadelphia in 1858.
712:
682:
449:, January 7, 1913, Part 1, Statements of A. Barton Hepburn, Victor Morawetz and Paul M. Warburg (1913) Washington, D.C.: Government Printing Office, p.388
207:
were set up to streamline the process by collected all cheques drawn on other banks, and collecting payment from those banks for the total to be cleared.
92:
in the City of London, to exchange all their cheques in one place and settle the balances in cash. The first organization for clearing cheques was the
1055:
276:
248:
was introduced in various countries, starting in the 1990s, to allow electronic images to be made of physical cheques, for electronic clearance.
373:
529:
228:
133:
1202:
240:
849:
705:
616:
430:
1006:
911:
1112:
317:
698:
293:
152:
328:
1095:
1033:
322:
305:
272:
204:
1187:
1154:
1083:
1043:
168:
89:
1137:
203:
All banks might have clerks to take cheques drawn on other banks to those banks, and wait for payment.
151:
The
Americans improved on the British check clearing system and opened a bankers' clearing house, the
1016:
836:
197:
63:
1164:
377:
926:
721:
591:
511:
447:
Banking and
Currency Reform Hearings of the Subcommittee of the Committee on Banking and Currency
268:
193:
85:
58:
1159:
1105:
1068:
953:
916:
672:
245:
54:
646:
1197:
1192:
1142:
1127:
1072:
1023:
985:
975:
503:
350:
156:
122:
100:, who was a friend of a founder of the Clearing House, published a book on mass production,
17:
533:
1122:
1050:
980:
958:
757:
729:
126:
97:
88:
began around 1770 when the bank clerks met at the Six Bells, a tavern in Dove Court off
1149:
1132:
1117:
763:
345:
252:
1181:
807:
677:
481:
515:
1038:
1028:
965:
872:
145:
624:
938:
892:
844:
791:
786:
115:
1100:
1088:
888:
862:
745:
739:
256:
222:
566:
1078:
686:. Vol. 6 (11th ed.). Cambridge University Press. pp. 476–478.
507:
948:
906:
901:
768:
118:
of documents so that the numerical errors could be found and corrected.
334:
1011:
970:
921:
813:
780:
690:
671:
271:
systems obviated the need for paper. Two methods were developed: the
62:
bank, the cheque would be returned as a dishonoured cheque marked as
50:
494:
Campbell-Kelly, Martin (October 2010). "Victorian Data
Processing".
275:(ACH) for smaller payments which complete in two business days, and
883:
819:
339:
311:
462:(Vol. 2) (1900) Logansport, Indiana: A.W. Bowen & Co., p. 873
990:
943:
774:
751:
46:
694:
825:
104:
in which Babbage described how the Clearing House operated:
398:
Nevin and Davis, The London Clearing Banks, (1970) pp.40-41
45:
is the process of moving cash (or its equivalent) from the
460:
The Progressive Men of the Commonwealth of Pennsylvania
267:
As the automation of cheque processing improved, fully
432:
Bankers' clearing house: what it is and what it does
999:
882:
835:
800:
728:
125:, the Bankers' Clearing House was evacuated to the
482:https://dl.acm.org/doi/pdf/10.1145/1831407.1831417
106:
132:The clearing operation is now operated by the
706:
8:
279:(CHIPS) for larger value same day payments.
169:Federal Reserve System check clearing system
27:Process of exchanging a cheque for its funds
368:
366:
797:
713:
699:
691:
102:The Economy of Machinery and Manufactures,
567:"The Evollution of a Strong ACH Network"
277:Clearing House Interbank Payments System
362:
136:, the United Kingdom's clearing house.
553:
407:
374:"what is check clearing? - definition"
1079:Commodity theory of money (Metallism)
7:
376:. Business Directory. Archived from
592:"Automated Clearing House Services"
57:system. This process is called the
229:Magnetic ink character recognition
134:Cheque and Credit Clearing Company
25:
1056:Akkadian standards of measurement
241:Substitute check in United States
865:
651:Federal Reserve Bank of New York
742:(W. Mesoamerica & N. Andes)
196:marked appropriately, such as "
621:The Clearing House Association
445:U.S. House of Representatives
1:
1059:
1007:List of historical currencies
912:Central bank digital currency
670:Ingram, Thomas Allan (1911).
342:- the US national ACH network
1113:Standard of deferred payment
314:- the UK equivalent of CHIPS
18:Bankers' clearing house
435:. Banker's Library. Pitman.
429:Matthews, Philip W (1921).
318:Electronic Benefit Transfer
1219:
530:"Check Services Offerings"
238:
153:Clearing House Association
860:
496:Communications of the ACM
329:Electronic funds transfer
1203:Payment clearing systems
1096:Quantity theory of money
917:Chattel/movable property
323:Electronic Check Council
306:Automated clearing house
273:Automated Clearing House
683:Encyclopædia Britannica
508:10.1145/1831407.1831417
471:Campbell-Kelly, page 21
419:Campbell-Kelly, page 20
94:Bankers' Clearing House
1155:Complementary currency
1084:Credit theory of money
1044:Depository institution
673:"Clearing-house"
200:" or "present again".
111:
1138:Digital gold currency
480:name="Campbell-Kelly,
1017:Coincidence of wants
837:Representative money
458:Blanchard, C. (Ed.)
251:The legalisation of
235:Electronic clearance
198:non-sufficient funds
64:non-sufficient funds
1165:Time-based currency
596:The Federal Reserve
556:, pp. 476–477.
263:Electronic payments
1034:Clearinghouse bank
722:Medium of exchange
380:on August 21, 2014
269:electronic payment
194:dishonoured cheque
129:in Staffordshire.
1175:
1174:
1160:Sectoral currency
1106:Market monetarism
1069:Code of Hammurabi
858:
857:
850:Gold certificates
246:Cheque truncation
216:Cheque processing
55:cheque truncation
16:(Redirected from
1210:
1143:Virtual currency
1128:Digital currency
1064:
1061:
1024:Bureau de change
875:
870:
869:
868:
801:Domestic animals
798:
715:
708:
701:
692:
687:
675:
662:
661:
659:
657:
643:
637:
636:
634:
632:
623:. Archived from
613:
607:
606:
604:
602:
588:
582:
581:
579:
577:
563:
557:
551:
545:
544:
542:
541:
532:. Archived from
526:
520:
519:
491:
485:
478:
472:
469:
463:
456:
450:
443:
437:
436:
426:
420:
417:
411:
405:
399:
396:
390:
389:
387:
385:
370:
351:Substitute check
157:Bank of New York
123:Second World War
39:American English
21:
1218:
1217:
1213:
1212:
1211:
1209:
1208:
1207:
1178:
1177:
1176:
1171:
1123:Unit of account
1062:
995:
981:Promissory note
959:Deposit account
932:Cheque clearing
886:
878:
871:
866:
864:
854:
831:
796:
764:Precious metals
731:
724:
719:
669:
666:
665:
655:
653:
645:
644:
640:
630:
628:
615:
614:
610:
600:
598:
590:
589:
585:
575:
573:
565:
564:
560:
552:
548:
539:
537:
528:
527:
523:
493:
492:
488:
479:
475:
470:
466:
457:
453:
444:
440:
428:
427:
423:
418:
414:
406:
402:
397:
393:
383:
381:
372:
371:
364:
359:
302:
265:
243:
237:
218:
213:
205:Clearing houses
178:
142:
127:Trentham Estate
98:Charles Babbage
77:
72:
31:Cheque clearing
28:
23:
22:
15:
12:
11:
5:
1216:
1214:
1206:
1205:
1200:
1195:
1190:
1180:
1179:
1173:
1172:
1170:
1169:
1168:
1167:
1162:
1157:
1150:Local currency
1147:
1146:
1145:
1140:
1135:
1133:Cryptocurrency
1125:
1120:
1118:Store of value
1115:
1110:
1109:
1108:
1103:
1093:
1092:
1091:
1081:
1076:
1073:§100; §122–125
1066:
1063: 2150 BC
1053:
1048:
1047:
1046:
1036:
1031:
1026:
1021:
1020:
1019:
1009:
1003:
1001:
997:
996:
994:
993:
988:
983:
978:
973:
968:
963:
962:
961:
951:
946:
941:
936:
935:
934:
924:
919:
914:
909:
904:
898:
896:
880:
879:
877:
876:
861:
859:
856:
855:
853:
852:
847:
841:
839:
833:
832:
830:
829:
828:(Tibet, China)
823:
817:
811:
804:
802:
795:
794:
789:
784:
778:
772:
771:(cotton cloth)
766:
761:
755:
749:
743:
736:
734:
726:
725:
720:
718:
717:
710:
703:
695:
689:
688:
678:Chisholm, Hugh
664:
663:
638:
608:
583:
558:
546:
521:
486:
473:
464:
451:
438:
421:
412:
410:, p. 477.
400:
391:
361:
360:
358:
355:
354:
353:
348:
346:Payment system
343:
337:
332:
326:
320:
315:
309:
301:
298:
290:
289:
285:
284:
264:
261:
253:remote deposit
236:
233:
217:
214:
212:
209:
177:
174:
141:
138:
90:Lombard Street
76:
73:
71:
68:
59:clearing cycle
43:bank clearance
35:check clearing
26:
24:
14:
13:
10:
9:
6:
4:
3:
2:
1215:
1204:
1201:
1199:
1196:
1194:
1191:
1189:
1188:Banking terms
1186:
1185:
1183:
1166:
1163:
1161:
1158:
1156:
1153:
1152:
1151:
1148:
1144:
1141:
1139:
1136:
1134:
1131:
1130:
1129:
1126:
1124:
1121:
1119:
1116:
1114:
1111:
1107:
1104:
1102:
1099:
1098:
1097:
1094:
1090:
1087:
1086:
1085:
1082:
1080:
1077:
1075:; c. 1750 BC)
1074:
1070:
1067:
1057:
1054:
1052:
1049:
1045:
1042:
1041:
1040:
1037:
1035:
1032:
1030:
1027:
1025:
1022:
1018:
1015:
1014:
1013:
1010:
1008:
1005:
1004:
1002:
998:
992:
989:
987:
984:
982:
979:
977:
974:
972:
969:
967:
964:
960:
957:
956:
955:
952:
950:
947:
945:
942:
940:
937:
933:
930:
929:
928:
925:
923:
920:
918:
915:
913:
910:
908:
905:
903:
900:
899:
897:
894:
890:
885:
881:
874:
863:
851:
848:
846:
843:
842:
840:
838:
834:
827:
824:
821:
818:
815:
812:
809:
808:Water buffalo
806:
805:
803:
799:
793:
790:
788:
785:
782:
779:
777:(Roman world)
776:
773:
770:
767:
765:
762:
759:
756:
753:
750:
748:(Mesoamerica)
747:
744:
741:
738:
737:
735:
733:
727:
723:
716:
711:
709:
704:
702:
697:
696:
693:
685:
684:
679:
674:
668:
667:
652:
648:
642:
639:
627:on 2017-03-20
626:
622:
618:
612:
609:
597:
593:
587:
584:
572:
568:
562:
559:
555:
550:
547:
536:on 2013-03-25
535:
531:
525:
522:
517:
513:
509:
505:
502:(10): 19–21.
501:
497:
490:
487:
483:
477:
474:
468:
465:
461:
455:
452:
448:
442:
439:
434:
433:
425:
422:
416:
413:
409:
404:
401:
395:
392:
379:
375:
369:
367:
363:
356:
352:
349:
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344:
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201:
199:
195:
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182:
175:
173:
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165:
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154:
149:
147:
140:United States
139:
137:
135:
130:
128:
124:
119:
117:
110:
105:
103:
99:
95:
91:
87:
81:
74:
69:
67:
65:
60:
56:
52:
48:
44:
40:
36:
32:
19:
1039:Savings bank
1029:Central bank
966:Legal tender
931:
873:Money portal
681:
654:. Retrieved
650:
641:
629:. Retrieved
625:the original
620:
611:
599:. Retrieved
595:
586:
574:. Retrieved
570:
561:
549:
538:. Retrieved
534:the original
524:
499:
495:
489:
476:
467:
459:
454:
446:
441:
431:
424:
415:
403:
394:
382:. Retrieved
378:the original
291:
266:
250:
244:
227:
219:
202:
191:
187:
183:
179:
166:
162:
150:
146:Suffolk Bank
143:
131:
120:
112:
107:
101:
93:
82:
78:
42:
34:
30:
29:
991:Safekeeping
845:Bimetallism
760:(W. Africa)
554:Ingram 1911
408:Ingram 1911
121:During the
116:paper trail
49:on which a
1182:Categories
1101:Monetarism
1089:Chartalism
986:Redemption
976:Possession
939:Clay token
792:Trade bead
746:Cocoa bean
730:Commodity
540:2013-03-27
384:August 21,
357:References
257:smartphone
239:See also:
223:radix sort
211:Automation
810:(SE Asia)
740:Axe-money
176:Operation
172:cheques.
155:, in the
86:clearings
949:Currency
927:Clearing
907:Banknote
902:Bailment
822:(Arabia)
783:(barley)
769:Quachtli
516:30255647
300:See also
1198:Cheques
1193:Banking
1000:General
954:Deposit
944:Coinage
816:(Hindu)
758:Manilla
680:(ed.).
656:5 April
647:"CHIPS"
631:5 April
617:"CHIPS"
601:5 April
576:5 April
484:page 21
335:Fedwire
75:England
70:History
1012:Barter
971:Notary
922:Cheque
787:Shells
781:Shekel
754:(rice)
514:
51:cheque
893:Token
884:Money
820:Camel
732:money
676:. In
571:NACHA
512:S2CID
340:NACHA
331:(EFT)
325:(ECC)
312:CHAPS
308:(ACH)
41:) or
1051:Mint
889:Fiat
775:Salt
752:Koku
658:2017
633:2017
603:2017
578:2017
386:2014
294:RTGS
167:The
144:The
47:bank
33:(or
826:Yak
814:Cow
504:doi
37:in
1184::
1060:c.
649:.
619:.
594:.
569:.
510:.
500:53
498:.
365:^
66:.
1071:(
1065:)
1058:(
895:)
891:/
887:(
714:e
707:t
700:v
660:.
635:.
605:.
580:.
543:.
518:.
506::
388:.
20:)
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