The ABA Routing Number is the 9-digit number assigned to individual banks to identify them. It is assigned by the American Banker’s Association, and is used to facilitate the electronic routing of funds from one bank account to another during an ACH transfer.
The ABA Routing Number (also known as the ABA Number, the Routing Transit Number or simply the “ABA”) was developed in 1910 by the American Bankers Association response to a growing need to identify individual banks in an ever more complex financial network.
It was originally created to identify the end processing institution for the final payment of checks, but since those beginnings it has grown to encompass a far wider range of financial transactions. With the advent of technology, the ABA Number now plays a crucial role in identifying and separating the millions of daily electronic wire transfers, clearing the tens of millions of checks written each day around the world, and enables processes and tracking capabilities onto the newly emerging online banking segment of the world’s financial transactions. Additionally, the ABA Routing Number now serves various functions with regards to the Federal Reserve and its numerous bank-to-bank transactions. It enables the Expedited Funds Availability Act (EFAA) to operate, as well as enabling Check 21, the nations’ new law empowering institutions to process checks from a digitized copy instead of paper checks. None of these functions would operate as smoothly and efficiently without the advent of the ABA Routing Number, and in fact many would not function at all without it. With the growth of the global economy heralding the beginning of world wide banking, the invention of the ABA Number at the beginning of the twentieth century has blossomed to become an essential tool for business transaction with its importance only increasing through the first quarter of the twenty-first.
Only Federal or State chartered financial institutions that are eligible to maintain an account at a Federal Reserve Bank can receive an ABA number. Newly formed financial institutions need to apply to Accuity, the Official Registrar of Routing Numbers and be in full accordance with the Routing Number Administrative Board Routing Number Policies as set forth by law in 1911. Since 1911, in addition to its application and regulatory duties, Accuity has been publishing twice yearly the American Bankers Association Key to Routing Numbers. This provides the entire industry up to date, official routing number information on the approximately 28,000 listings as well as a history of five years worth of retired numbers for research purposes. Lately there has been increased conversation about publishing the guide more frequently, or at the very least publishing a monthly supplement to keep pace with the rapidly changing financial landscape.
In today’s lightening fast, constantly changing, e-commerce global marketplace, accuracy is a crucial requirement. Inaccuracy on any level of a monetary transaction of any type can cause massive delays, costly confusion and even more dire circumstances. With huge sums of money circumnavigating the globe continuously, there must be some system of tracking, conformity, and failsafe accountability to keep the world’s economies humming smoothly along. Without the ABA Routing Number banks could neither clear a small check written at a local supermarket nor send billions of dollars overseas to pay national debts. The ABA Number, along with the Key to Routing Numbers Guide, provides the necessary coding to facilitate each and every one of those transactions accurately and efficiently. The ABA Routing Number, Accuity and The Guide have been helping money to move, businesses to prosper and people to purchase goods and services around for almost 100 years and will likely continue for the next 100.