Typical volume in the early 80's was over 11 million electronic items per month submitted to the ACHs primarily on magnetic tape for sorting and redistribution. The predominant types of electronic items processed by the 32 ACHs were military payroll and social security electronic deposits. Other types of transactions include withdrawl of funds to pay bills pre-authorized by the customer for payment. Electronic deposits or withdrawls destined for a F.I. not served by a specific regional ACH are transmitted via telecommunications links to the appropriate regional ACH for local redistribution.
Bill paying by telephone is another popular EFT service designed to elimate paper check mailing and processing. In its most basic form, the service involves customer-direct input by a touchtone telephone to a computer of the data necessary to generate electronic withdrawls from a account maintained by the customer and an electronic deposit to an account maintained by the billing company. Deposits destined for a company that does not maintain an account with the customer's bank can be routed through the local ACH for delivery to an appropriate bank.
Truncation of the physical transport of paper bearing instructions for the movement of funds between accounts is another EFT application. For example, efforts to truncate the flow of checks through the use of image processing techniques are under development. The thrust of this effort is to create electronic images of checks at the point of first deposit and to transmit only these images to the customer or customers's bank.
The national credit card clearing and settlement system are other examples of such truncation systems. When a customer uses Visa or Mastercard to make a purchase, he or she normally is not dealing with a merchant who has an account with the financial institution that has issued the card. As a result, the evidence of the completed sale in the past was physically forwarded to the merchant's contracting bank for credit to the merchant's account and then on to the card-issuing bank for posting to the customer's statement. In 1978, national systems were installed by the two competing bankcard organizations which truncated the flow of this paper at the merchant's bank of deposit and forwared only an electronic message to the card issurer for posting to the cardholders statement. These systems were later expanded to include worldwide bankcard sales. The system that supports this electronic transmission fpr Visa cards processed over 60 million customer purchases per month during the latter part of 1985, or approximately 60% of all Visa card sales worldwide. The Visa system transmits this sales data overnight in a form which can be directly posted to a customer's descriptive billing statement through a network linking together 250 Visa bank processing centers in Europe, Canada, and the U.S. Magnetic tapes are sent to the balance of Visa banks operating in more than 125 countries throughout the rest of the world. As a result of the implemention of these two systems, both national systems have uniformly adopted cardholder billing statements which simply list a description of the sale without including a copy of the sales receipt, telephone numbers and password format. Gaining access to the ACH will give to all the information about credit cards needed.
In order to exact any type of bank associated transaction by computer, one must have a working knowledge of the various routing codes involved in the banking processes. The following is an informational guide to the coding used in American banking transactions.
ABA (American Bankers Association) Transit Numbers
Numbers 1 to 49 inclusive are Prefixes for Cities
Numbers 50 to 99 inclusive are Prefixes for States
Prefix Numbers 50 to 58 are Eastern States
Prefix Number 59 is for Alaska, Hawaii, and US Territories
Prefix Numbers 60 to 69 are Southeastern States
Prefix Numbers 70 to 79 are Central States
Prefix Numbers 80 to 88 are Southwestern States
Prefix Numbers 90 to 99 are Western States
1 New York, NY
2 Chicago, IL
3 Philadelphia, PA
4 St. Louis, MO
5 Boston, MA
6 Cleveland, OH
7 Baltimore, MD
8 Pittsburgh, PA
9 Detroit, MI
10 Buffalo, NY
11 San Francisco, CA
12 Milwaukee, WI
13 Cincinnati, OH
14 New Orleans, LA
15 Washington D.C.
16 Los Angeles, CA
18 Kansas City, MO
19 Seattle, WA
20 Indianapolis, IN
21 Louisville, KY
22 St. Paul, MN
23 Denver, CO
24 Portland, OR
25 Columbus, OH
26 Memphis, TN
27 Omaha, NE
28 Spokane, WA
29 Albany, NY
30 San Antonio, TX
31 Salt Lake City, UT
32 Dallas, TX
33 Des Moines, IA
34 Tacoma, WA
35 Houston, TX
36 St. Joseph, MO
37 Fort Worth, TX
38 Savannah, GA
39 Oklahoma City, OK
40 Wichita, KS
41 Sioux City, IA
42 Pueblo, CO
43 Lincoln, NE
44 Topeka, KS
45 Dubuque, IA
46 Galveston, TX
47 Cedar Rapids, IA
48 Waco, TX
49 Muskogee, OK
50 New York
51 Connecticut
52 Maine
53 Massachusetts
54 New Hampshire
55 New Jersey
56 Ohio
57 Rhode Island
58 Vermont
59 Alaska, American Samoa, Guam, Hawaii, Puerto Rico, Virgin Islands
60 Pennsylvania
61 Alabama
62 Delaware
63 Florida
64 Georgia
65 Maryland
66 North Carolina
67 South Carolina
68 Virginia
69 West Virginia
70 Illinois
71 Indiana
72 Iowa
73 Kentucky
74 Michigan
75 Minnesota
76 Nebraska
77 North Dakota
78 South Dakota
79 Wisconsin
80 Missouri
81 Arkansas
83 Kansas
84 Louisiana
85 Mississippi
86 Oklahoma
87 Tennessee
88 Texas
90 California
91 Arizona
92 Idaho
93 Montana
94 Nevada
95 New Mexico
96 Oregon
97 Utah
98 Washington
99 Wyoming
The next stage in the evolution of the banking system would be the development of a note clearing system that would arise out of bankers' attempts to raise their profits by increasing the demand for their notes. In the beginning, no banker would accept the notes of other banks when such notes were submitted by the public, because to do so would make rivals' notes more acceptable and raise his competitors' profits. But any two banks could make themselves jointly better-off by agreeing to accept each other's notes. Each bank would benefit, because the public would more readily accept the notes of either of the two banks, given the knowledge that tha other bank would accept the notes at par as well. The notes of those two banks would thus become slightly more attractive than alternative media of exchange such as gold or the notes of other banks. Thus additional bank pairs would be formed, and it would become increasingly apparent that the easiest way to organize the note exchange system would be to meet regularly at a central clearing session where the banks would hand back each others' notes and settle the differences. In this way a central clearing system would evolve out of the banks' own private self-interest. The clearing system is important because it would provide further restraint on the ability of any one bank to overissue its notes. Without the clearing system a bank that overissued would face a reserve drain only from the general public returning it's notes for specie, and it might take some time for this to force the bank to restrain its issues. Once the clearing system was in place however, a bank issuing more notes than the public wanted would also face reserve losses at the central clearing sessions. These losses would occur as the public deposited extra notes at other banks and those banks returned them to the issuing bank. A bank that overissued notes would thus lose reserves through two channels--through direct redemption by the public, and through indirect redemption via the clearing system--but the latter channel would be likely to operate more quickly. In my opinion, there is no doubt that the next stage -- the next "big thing" in GBCs (maybe 1-3 years from now) will be the evolution of a central clearing mechanism, which will be quite exciting. There will then be intense competetive pressure between GBCs to have better and better governance, and better and better other-qualities that users will demand (eg, users may demand cheap bailing in/out, as there is noise about currently .... once there is a central clearing mechanism, there will be much more pressure on to preform well on that or any other competetive criteria).
ABA (American Bankers Association) Transit Numbers Numbers 1 to 49 inclusive are Prefixes for Cities Numbers 50 to 99 inclusive are Prefixes for States Prefix Numbers 50 to 58 are Eastern States Prefix Number 59 is for Alaska, Hawaii, and US Territories Prefix Numbers 60 to 69 are Southeastern States Prefix Numbers 70 to 79 are Central States Prefix Numbers 80 to 88 are Southwestern States Prefix Numbers 90 to 99 are Western States 1 New York, NY 2 Chicago, IL 3 Philadelphia, PA 4 St. Louis, MO 5 Boston, MA 6 Cleveland, OH 7 Baltimore, MD 8 Pittsburgh, PA 9 Detroit, MI 10 Buffalo, NY 11 San Francisco, CA 12 Milwaukee, WI 13 Cincinnati, OH 14 New Orleans, LA 15 Washington D.C. 16 Los Angeles, CA 18 Kansas City, MO 19 Seattle, WA 20 Indianapolis, IN 21 Louisville, KY 22 St. Paul, MN 23 Denver, CO 24 Portland, OR 25 Columbus, OH 26 Memphis, TN 27 Omaha, NE 28 Spokane, WA 29 Albany, NY 30 San Antonio, TX 31 Salt Lake City, UT 32 Dallas, TX 33 Des Moines, IA 34 Tacoma, WA 35 Houston, TX 36 St. Joseph, MO 37 Fort Worth, TX 38 Savannah, GA 39 Oklahoma City, OK 40 Wichita, KS 41 Sioux City, IA 42 Pueblo, CO 43 Lincoln, NE 44 Topeka, KS 45 Dubuque, IA 46 Galveston, TX 47 Cedar Rapids, IA 48 Waco, TX 49 Muskogee, OK 50 New York 51 Connecticut 52 Maine 53 Massachusetts 54 New Hampshire 55 New Jersey 56 Ohio 57 Rhode Island 58 Vermont 59 Alaska, American Samoa, Guam, Hawaii, Puerto Rico, Virgin Islands 60 Pennsylvania 61 Alabama 62 Delaware 63 Florida 64 Georgia 65 Maryland 66 North Carolina 67 South Carolina 68 Virginia 69 West Virginia 70 Illinois 71 Indiana 72 Iowa 73 Kentucky 74 Michigan 75 Minnesota 76 Nebraska 77 North Dakota 78 South Dakota 79 Wisconsin 80 Missouri 81 Arkansas 83 Kansas 84 Louisiana 85 Mississippi 86 Oklahoma 87 Tennessee 88 Texas 90 California 91 Arizona 92 Idaho 93 Montana 94 Nevada 95 New Mexico 96 Oregon 97 Utah 98 Washington 99 WyomingThe next stage in the evolution of the banking system would be the development of a note clearing system that would arise out of bankers' attempts to raise their profits by increasing the demand for their notes. In the beginning, no banker would accept the notes of other banks when such notes were submitted by the public, because to do so would make rivals' notes more acceptable and raise his competitors' profits. But any two banks could make themselves jointly better-off by agreeing to accept each other's notes. Each bank would benefit, because the public would more readily accept the notes of either of the two banks, given the knowledge that tha other bank would accept the notes at par as well. The notes of those two banks would thus become slightly more attractive than alternative media of exchange such as gold or the notes of other banks. Thus additional bank pairs would be formed, and it would become increasingly apparent that the easiest way to organize the note exchange system would be to meet regularly at a central clearing session where the banks would hand back each others' notes and settle the differences. In this way a central clearing system would evolve out of the banks' own private self-interest. The clearing system is important because it would provide further restraint on the ability of any one bank to overissue its notes. Without the clearing system a bank that overissued would face a reserve drain only from the general public returning it's notes for specie, and it might take some time for this to force the bank to restrain its issues. Once the clearing system was in place however, a bank issuing more notes than the public wanted would also face reserve losses at the central clearing sessions. These losses would occur as the public deposited extra notes at other banks and those banks returned them to the issuing bank. A bank that overissued notes would thus lose reserves through two channels--through direct redemption by the public, and through indirect redemption via the clearing system--but the latter channel would be likely to operate more quickly. In my opinion, there is no doubt that the next stage -- the next "big thing" in GBCs (maybe 1-3 years from now) will be the evolution of a central clearing mechanism, which will be quite exciting. There will then be intense competetive pressure between GBCs to have better and better governance, and better and better other-qualities that users will demand (eg, users may demand cheap bailing in/out, as there is noise about currently .... once there is a central clearing mechanism, there will be much more pressure on to preform well on that or any other competetive criteria).