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Two years after introducing ACH services between the United States and Canada, the Fed will begin piloting cross-border payment systems with Europe and Mexico as well, the Federal Reserve Board announced recently. FedACH International? will offer ACH to Mexico and five European countries—Austria, Germany, the Netherlands, Switzerland and the United Kingdom. Pilot tests will begin near the end of the third quarter, with the system expected to be in full operation by the fall of 2004. About 10 banks will be involved in each pilot test.
While the European service will be two-way, the Mexican service will initially include transfers only from the United States to Mexico. Transactions in the opposite direction will be added before the pilot is complete. Eventually, the Fed hopes to expand its ACH network to other continents, including Asia and South America.
The Minneapolis Fed, which currently serves as the outgoing gateway for ACH transactions going to Canada, will fill that same role for Mexico and Europe, as well as for future network participants.
In the new markets, ACH transfers will be converted to the local currency at their destination. Currently, Canadian funds can be received in U.S. currency because Canada is a dual-currency nation that accepts U.S. dollars. This feature will not be an option for ACH transactions with Europe or Mexico.
FedACH International is a registered service mark of the Federal Reserve Banks. A complete list of marks owned by the Federal Reserve Banks is available at www.frbservices.org.
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Fed in Print: An index of the economic research conducted by the Fed.