[homedepotdave]

Really great post from Modern Treasury. They are crushing it.

My only question with this explanation is -- to be a 3rd party service provider, this means they would need a somewhat intense bank integration with 1 side of the ACH, right? The retailers definitely just fill out an ACH release form like [1], and I really think the distributors don't do a heavy bank integration either...

[1] https://burkedist.com/application/files/3314/8823/3226/Burke...

[YuriNiyazov]

They probably use Fedwire, and you are not correct that the service is free, look at https://fintech.com/contact/ under "How much does Fintech cost?"

[homedepotdave]

Interesting... I don't know much about Fedwire, I will check it out. Thanks YuriNiyazov!

And yes sorry it's not free, just relatively cheap -- I think it's $200/year and $1 per transaction, which doesn't seem like enough to cover traditional wires.

[YuriNiyazov]

These are the fedwire fees:

https://www.frbservices.org/resources/fees/wires-2021.html

All fees under $1

[homedepotdave]

Alright yuriniyazov, I’ve been reading for hours about Fedwire but I’m still a bit stumped. To participate directly in Fedwire you need to have a Master account with the Fed, in which case you need to basically be a bank. So they… have a secret subsidiary that’s a bank that has a fed master account? Or somehow a very, very good relationship with their bank such that their bank (which has a master account) proxies the Fedwire transactions for them at cost?