question: Why are bank transfers in the US not instant, while in other countries they are?
comment: Short Answer: Banks would have to agree on a universal system and we would have to pay to have it done. Many financial institutions would lose out on service fees they can currently collect by providing work around solutions. So, while it would be better for consumers most don't realize it's a problem and aren't motivated to have it changed, while financial institutions are are disincentivized to make the change themselves. [Planet Money has a much better, and longer answer.]( URL_0 ) (it's a 22 minute podcast)
passages: Traditional electronic payments like wire transfers, that perform the electronic funds transfer within few business days, are not in line with user expectations. 
  
  It is predicted that in the next year instant payments will become the standard for electronic fund transfers.
  
  Section::::Examples of instant payment services.
  
  A non-exhaustive list of systems available today, and in the near future, is the following:
  
  BULLET::::- Japan, ZENGIN, deployed in 1973;
  
  BULLET::::- China, IBPS - Internet banking payment system, deployed in 2010;
  
  BULLET::::- India, IMPS - Immediate Payment Service, deployed in 2010;
  
  BULLET::::- United States, Zelle, available since 2016;
   The Euro Retail Payments Board (ERPB) has provided a widely accepted definition of instant payments, that are: ""electronic retail payment solutions available 24/7/365 and resulting in the immediate or close-to-immediate interbank clearing of the transaction and crediting of the payee’s account with confirmation to the payer (within seconds of payment initiation)."" 
  
  Section::::Background.
  
  The growth of e-commerce has caused changes in people's spending patterns. Shopping is no longer confined to regular business hours, creating a new challenges for funds transfers. 
  
  Similarly, merchants require faster and more reliable money transfer systems to keep up with consumer demand.
   BULLET::::- United States, Venmo, available since 2018;
  
  BULLET::::- United States, RTP - Real-Time Payments, available since 2017;
  
  BULLET::::- Europe, RT1, available since November 2017;
  
  BULLET::::- Europe, TIPS - TARGET Instant Payments Settlement, available from November 2018;
  
  BULLET::::- Australia, NPP - New Payments Platform, available since February 2018.
  
  Section::::Comparison with digital wallets.
  
  In digital wallet based payment systems like Paytm, PayPal, Apple Pay, AliPay, WeChat Pay etc. users receive immediate notification of the transaction, but funds are transferred at best in the next business day. 
   Small banks and credit unions with assets valued at less than $10 billion can afford to offer extra rewards and avoid imposing additional fees, as they are exempt from the caps imposed by the Durbin Amendment.
  
  Section::::Background.
   Traditionally, making payments involves many departments in a bank. Both initiating a payment to be sent and processing a received payment may take days. In the past, payments were initiated through numerous "human-friendly" (aka paper-based) means, such as a human through a paper order, over the phone, or via fax. The payment order was input into the bank's payment system, then confirmed by a supervisor. This confirmation ensured an accurate match of input versus order before sending the payment. When multiple banks, countries or currencies were involved, the process often took several hours. When the complexity of the payment was higher, the amount of labor increased and additional human intervention resulted in more risk of errors, longer processing time, and higher costs.
   Unlike a cheque, the funds from an e-Transfer are not frozen in the recipient's account. An e-Transfer cannot bounce, as the funds are guaranteed, having been debited from the sender's account immediately upon initiating the transfer. As long as both sender and recipient bank are participating institutions, the funds are sent and received instantly. However in some cases, for example two people with different banking institutions, transfers may take anywhere between near instant, or up to a few hours for the receiving party to get their emailed notice.
   Instant payment
  
  Instant payment is a new way to exchange money and purchase services in seconds. Compared with wire transfers, they allow the transfer of money from the payer bank account to the payee bank account almost immediately, instead of requiring few business days. 
  
  These payment systems have been developed (and are currently under development) worldwide as the need of faster and reliable transaction is the new economy common requirement.
   In May 2005 the task force announced that agreement had been reached to reduce clearing times for phone, Internet and standing order payments. This committed the payments services industry to develop a system able to clear automated payments in no more than half a day – the so-called "ELLE" model – resulting in payment being received the "same day" if made sufficiently early. Implementation groups were given six months to bring forward detailed proposals.
   DCA payments are processed by the sponsoring bank according to their Service Level Agreements - for Barclays this is currently a maximum of 30 minutes before the payment is sent to the beneficiary bank. Beneficiary banks which are members of FPS must apply the funds to the beneficiary account within 2 hours, although in most cases it is done immediately. 
  
  Section::::Bureaux.
  
  Bureau organisations can submit files of payments on behalf of other registered service users of Direct Corporate Access.
   Section::::Overview.
   BULLET::::3. The message also includes settlement instructions. The actual transfer is not instantaneous: funds may take several hours or even days to move from the sender's account to the receiver's account.
  
  BULLET::::4. Either the banks involved must hold a reciprocal account with each other, or the payment must be sent to a bank with such an account, a correspondent bank, for further benefit to the ultimate recipient.
   DFID thought otherwise. First Solution was only too ready to agree, and carefully conformed with the necessary regulatory requirements - which were all about countering Terrorist finance and Anti-money laundering. The regulations made no reference to steps to be taken to ensure financial reliability. In the past there had been no need to do so. Trust-based networks which grew out of local communities had been extremely reliable.
   Similar sentiments predate the Bank Transfer Day by at least several years. In 2009, finance writer and radio host Dave Ramsey wrote: "I haven’t done business with big banks for years, primarily because of the awful customer service you get at most of them. I like local, community banks, and I believe whole-heartedly in credit unions. As a rule, these institutions practice excellent customer service. Plus, most of them didn’t get mixed up the sub-prime debacle." Similarly, Suze Orman was quoted in 2009 characterizing large banks as often doing "anything to increase earnings and profits" for shareholders, while credit unions, accountable to their members, are more typically "ethical and honest". In August 2011, Clark Howard advised his readers to be wary of "giant, monster megabanks" and to seek better interest rates and customer service at smaller banks or credit unions.
   BULLET::::- Payments made electronically can be less expensive to the payer; typically electronic payments may cost around 25¢ (US) whereas it could cost up to $2 (US) to generate, print and mail a paper cheque. Banks may not even charge for the service at all; for example many banks in the European Union charge nothing for electronic payments inside the SEPA (Single Euro Payments Area), provided the proper BIC and IBAN account numbers are used.
  
  BULLET::::- The payment error rates and subsequent reconciliation issues are significantly reduced.
   Section::::Credit unions realize increased deposits.
  
  The Credit Union National Association (CUNA) said the association's web site aimed at informing customers about credit union services has seen traffic double. CUNA members reported an increase in account openings. According to Bill Cheney, CUNA's president and chief executive officer, the current surge in account openings has been more sustained than similar surges in the past.
   BULLET::::5. The destination banks receive the inward remittance messages from the Clearing Centre and pass on the credit to the beneficiary customers’ accounts.
  
  Section::::Settlement timings.
  
  NEFT originally settled fund transfers in hourly batches with twenty four settlements between 8 am and 7 pm on weekdays. Settlements are closed on the second and fourth Saturday of the month. In April 2016, the RBI announced that clearance times would be reduced to half-hourly batches raising the number of settlements per day to 23.
   Three enhancements to Same Day ACH are coming. On Sept. 20, 2019, the availability of funds for both Same Day and traditional ACH may occur earlier in the day. On March 20, 2020, the dollar limit per Same Day ACH transaction will increase from $25,000 to $100,000. On March 19, 2021 (delayed from Sept. 18, 2020), financial institutions will be able to submit Same Day ACH transactions to the ACH Network two hours later each business day.
   BULLET::::- In the United Kingdom, Faster Payments Service offers near immediate transfer, BACS offers giros that clear in a matter of days while CHAPS is done on the same day.
  
  BULLET::::- Canada has an Interac e-Transfer service
  
  BULLET::::- In India, NEFT and RTGS services are available to clear funds in a day.
  
  Section::::Access.
  
  Section::::Access.:Branch access.
  
  Customers may need to attend a bank branch for a wide range of banking transactions including cash withdrawals and financial advice. There may be restrictions on cash withdrawals, even at a branch. For example, withdrawals of cash above a threshold figure may require notice.
   BULLET::::- Electronic funds transfer
  
  BULLET::::- Wire transfer
  
  BULLET::::- Directo a México
  
  BULLET::::- Originating Depository Financial Institution
  
  BULLET::::- Pan-European automated clearing house
  
  BULLET::::- Universal Payment Identification Code
  
  Section::::External links.
  
  BULLET::::- NACHA, The Electronic Payments Association
  
  BULLET::::- Electronic Payments
  
  BULLET::::- Federal Reserve Payment Systems
  
  BULLET::::- Intro to the ACH Network
  
  BULLET::::- Federal Reserve's ACH Number Lookup
  
  BULLET::::- Regulation E
  
  BULLET::::- ACH Return Codes & Explanations
  
  BULLET::::- ACH Terms and Definitions
  
  BULLET::::- ACH vs Credit Cards
  
  BULLET::::- Report to the Congress on the Use of the Automated Clearinghouse System for Remittance Transfers to Foreign Countries
  
  BULLET::::- International ACH Transactions (IAT) Solutions Center
   BULLET::::- The Autodeposit feature allows senders to send money and be received by the recipient without the recipient having to answer a security question. The recipient must enable this feature in their account settings. Not all banks offer this feature.
  
  Section::::Benefits and disadvantages.
   Funds sent from a Wallet balance, debit card, or linked bank account are generally available to the recipient immediately, and if the recipient has his or her own Wallet account and card, he or she can make an immediate withdrawal of those funds from an ATM. If the funds are drawn on the sender's Wallet balance, the balance will also reflect this change immediately. Any portion of funds drawn via a linked bank account will take two or three days to actually post to that account, though these funds will show as "pending" withdrawals on that account within 24 hours.
   Policies, procedures, and processes should include a review of the foreign financial institution’s processes for identifying and monitoring the transactions of subaccountholders and for complying with any AML statutory and regulatory requirements existing in the host country and the foreign financial institution’s master agreement with the U.S. bank. In addition, U.S. banks should have procedures for monitoring transactions conducted in foreign financial institutions’ PTAs.
  
  In an effort to address the risk inherent in PTAs, U.S. banks should have a signed contract (i.e., master agreement) that includes:
  
  Roles and responsibilities of each party.
   Nine banks and one building society, accounting for about 95 percent of payments traffic, initially committed to use the service; there were 21 direct participants. For smaller organisations such as building societies and savings institutions, the service is available through agency arrangements with a direct participant. Initially, there were few announcements regarding charges for Faster Payments; it had been expected to be around £1–£5 for immediate payments by business users. No retail bank currently charges personal customers for this service (with non-guaranteed transfer time), nor, , was there any sign that this would change.
   Section::::Overview by country.:European Union.:By EU country.
  
  From October 2008, many EU countries increased the amount covered by their deposit insurance schemes. Since these amounts are typically encoded in legislation, there was a certain delay before the new amounts were formally valid.
   Files of payments submitted by Secure-IP will be disaggregated by VocaLink, the operators of DCA, and submitted into the Faster Payments Service. Disaggregation and acceptance may take up to thirty minutes and beneficiaries will receive access to the funds within two hours of acceptance.
  
presuppositions: Bank transfers should be able to always be instant. 
corrections: It is not practical for a bank transfer to be instant because every bank would have to agree to the same terms. 
raw_presuppositions: Bank transfers should be able to always be instant.  Bank transfers should be instant.
raw_corrections: It is not practical for a bank transfer to be instant because every bank would have to agree to the same terms.  That would take a system in place that would need to be paid for. 