At its core, the ACH protocol allows any bank to initiate transfers from any other bank's accounts.

How does that possibly work?

The model has concave, self-righting dynamics.

Banks have a very different trust model.

A bank must have a charter to operate.

The charter is what allows them to be part of this exclusive club.

If they lose their charter, it's game over, death.

That means that banks institute their own controls to make sure they don't initiate transfers that shouldn't happen.

In addition, consumer ACH transfers also have a 60 day reversal policy, no questions asked.

Due to the incentive alignment the downside is capped and self-regulating.

This works for banks… but how come my power company can initiate an ACH transfer?

The power company isn't a bank, but there is an issuing bank who is sponsoring them.

The bank is the one who takes on the risk, and convinces themselves the controls mean that erroneous transfers will be rare.

The model seems anachronistic, but it's actually antifragile and clever.