ACH is a file format. You generate an ACH file and then SFTP that to the Federal Bank (or another central bank... I forget which). In simple terms, the file contains a header and a bunch of batches. The header has the account info whomever generated the ACH file (a bank, usually) and the records in each batch the account info of another party.
The federal bank iterates through all of the records in the file and attempts to perform each transaction using the pair of account info, the type of transaction, and the details in the transaction record.
To answer the question about why it takes so long?
Generally it doesn't actually. Most companies will tell you it takes 24hrs to send you money, and that's because most companies generate and submit an ACH file once a day, and the federal bank will process those files at some point after that.
Why does it take weeks for a deposit to be marked invalid and reversed? Well, analytics, fraud detection, and those kinds of activities are not all real-time. More than you think are actually caught _remarkably_ fast, but many take time to find and often include collaboration with multiple banks, government agencies, and policing organizations from multiple countries. That means geo-political concerns, international treaties, timezones, communication problems. You name it.
I actually had a job where part of my responsibility was processing this file. It was literally me opening WS_FTP Pro and manually downloading and uploading that file. It blew my mind that this was how we were doing it.
The federal bank iterates through all of the records in the file and attempts to perform each transaction using the pair of account info, the type of transaction, and the details in the transaction record.
To answer the question about why it takes so long?
Generally it doesn't actually. Most companies will tell you it takes 24hrs to send you money, and that's because most companies generate and submit an ACH file once a day, and the federal bank will process those files at some point after that.
Why does it take weeks for a deposit to be marked invalid and reversed? Well, analytics, fraud detection, and those kinds of activities are not all real-time. More than you think are actually caught _remarkably_ fast, but many take time to find and often include collaboration with multiple banks, government agencies, and policing organizations from multiple countries. That means geo-political concerns, international treaties, timezones, communication problems. You name it.