Which clearing system is designed for high-volume, low-value transactions?

The Automated Clearing House (ACH) is specifically designed to handle high-volume, low-value transactions efficiently. This system facilitates electronic money transfers between banks and financial institutions, allowing a large number of transactions to be processed simultaneously at a lower cost compared to real-time gross settlement systems like RTGS. ACH transactions are typically used for direct deposits, payroll, and recurring payments, making it a suitable choice for mass processing of smaller monetary amounts.

This system operates on a batch processing model, meaning transactions are accumulated over a period before being processed together, which is ideal for managing large volumes of transactions that do not require immediate settlement. By utilizing this approach, the ACH system can minimize costs and improve efficiency, making it particularly beneficial for high-volume, low-value transactions.