pjd@hpuxa.ircc.ohio-state.edu (Peter J. Dotzauer) (10/28/89)
What are the prerequisites to access the Federal Reserve network for
initiating financial transactions between accounts (e.g. between my
checking account and the account of a utility to pay an electric
bill)?
I have read that Checkfree, Inc., a company that provides certain home
banking and electronic bill paying services, uses the Federal Reserve
network, that is also used by banks to transfer funds. Banks are
compelled to cooperate with that company, or otherwise they would
violate federal banking regulations.
If a non-bank entity like Checkfree can access the Federal Reserve
network to transfer funds, why can I not do that myself, or can I?
Peter Dotzauer: Numerical Cartography Lab, Ohio State University, Columbus, OH
VOICE: (614) 292-1357 FAX: 292-9180 DATA: 293-0081
BITNET: ts3285@ohstvma UUCP: ...!osu-cis!hpuxa.ircc.ohio-state.edu!pjd
FIDO: 1:226/50 ARPA: pjd@hpuxa.ircc.ohio-state.edu [128.146.1.5]
[Moderator's Note: I believe Checkfree *is* considered a bank for the purpose
of routing and funds transfer through the Fed. And I suppose if the banks
and the FRB were willing to accept you as a 'bank' you would be
permitted to use the network also. But calling yourself one does not
make you one; and I suspect Checkfree has substantial reserves on deposit
which guarentee its performance, in the same way the check-printing companies
have to have an excellent relationship with the banks, in order to be given
access to account numbers, customer names, etc. PT]