Apparently, back in the days before ACH, banks met up at a parking lot in NYC every night and literally exchanged bags of paper checks.
There was a proposal build something better than ACH, but it was denied because the cost to upgrade the infrastructure would cost too much for small banks and credit unions.
http://www.npr.org/sections/money/2013/10/04/229224964/episo...
Apparently, back in the days before ACH, banks met up at a parking lot in NYC every night and literally exchanged bags of paper checks.
There was a proposal build something better than ACH, but it was denied because the cost to upgrade the infrastructure would cost too much for small banks and credit unions.