With 92% Backing, NACHA’s Same-Day Proposal Will Go to Ballot Within Weeks

A proposal to speed up processing on the automated clearing house network from next-day to same-day settlement will go to a ballot among NACHA voting members as early as next month, according to information posted this week on NACHA’s Web site.

NACHA took comments on the proposal from early in December, when the governing body for the ACH made its details public, until Feb. 6. Comments came in the form of formal letters or survey responses, or both. Some 92% of 181 survey responses supported the proposal, according to NACHA.

“Same Day ACH has strong support to move forward to ballot…It is anticipated that this Rule will be balloted among NACHA’s voting members in early 2Q 2015,” NACHA says on the site. The organization has 43 voting members.

But the proposal these members will vote on won’t be exactly the same as the one that exists currently. NACHA is likely to make some changes in response to the comments. “As with all of our ballots, there will be modifications to the proposal based upon the feedback from the [comments and surveys],” a NACHA spokesperson tells Digital Transactions News by email. “Those modifications are being evaluated with our Rules and Operations Committee right now, and we aren’t…sure of the specifics just yet.”

Of the respondents that favored the proposal, NACHA says “most” supported it without changes, though it doesn’t quantify the number. Among supporters that wanted changes, the two most frequently cited modifications were timing of clearing windows (35%), and timing of settlement (28%). Retail groups lobbied for real-time rather than same-day processing, NACHA says.

However, another bugbear among at least some merchants, the interbank fee, did not occur among the most frequently requested changes. To reimburse receiving financial institutions for systems costs incurred in accommodating same-day settlement, the proposal would require originating banks to pay receiving banks 8.2 cents per same-day transaction.

Because this fee would likely be passed on, in whole or in part, to merchants and other originators, at least two big-merchant trade groups filed comments objecting to it.

But receiving banks appear to be just as adamant about collecting the fee as merchants are bothered about paying it. Among receiving institutions that responded to the survey, 57% said deleting an interbank fee from the proposal would be a deal-breaker for them. “The interbank fee was supported or accepted by a large portion of the industry, including financial institutions and the organizations representing the largest number of end-users of the ACH Network,” NACHA says on the Web site.

Among the responses, 141 of the survey returns and 8 out of the 43 comment letters came from financial institutions. Merchants, merchant groups, and other so-called end users accounted for six survey responses and eight comment letters. The remaining survey responses and letters came from a mix of organizations, including processors and regional payments associations.

NACHA’s proposal requires receiving banks to handle same-day settlements, and envisions the interbank fee as a means of ensuring all banks will participate. Under the proposal, the fee cannot increase and is subject to periodic reviews.

The proposal calls for same-day capability to be phased in in three steps over an 18-month period starting in September 2016 and ending in March 2018. The steps would introduce multiple settlement windows during the day and would include both ACH credits and debits. If NACHA members approve the proposal, the network will handle almost 1.4 billion same-day payments annually within 10 years, NACHA forecasts.