As Transaction Volume Grows, NACHA Smooths out the Road for Same-Day ACH

With volume building for same-day processing of automated clearing house items, the regulatory body for the extensive ACH network announced Monday a trio of enhancements aimed at, among other things, raising the dollar limit on the faster transfers and making credit funds available faster during the processing day.

The changes, which were decided on as recently as Thursday, will take effect at different times, NACHA says.

Effective March 20, 2020, the dollar limit on same-day transactions will quadruple from $25,000 to $100,000, NACHA announced. This change will be especially important to institutions looking to handle more business-to-business payments, many of which were ruled out by the existing cap. “We’ve been hearing from end-users,” Jane Larimer, chief operating officer at Herndon, Va.-based NACHA, tells Digital Transactions News. “It’s the first thing they bring up. Twenty-five thousand dollars is too low for them.”

Another change gives institutions more time during the day to submit ACH transactions by extending the deadline by two hours to 4:45 p.m. Eastern Time. This move, which adds a third processing window, will be effective Sept. 18, 2020, and will be supported by the two ACH network operators, NACHA and The Clearing House, a New York City-based processor owned by many of the nation’s largest banks.

“The Mountain [time zone] and the West Coast are really excited about [this change],” says Larimer. “It’s something we’ve been hearing about. As we move West, there was a need to add a third window later in the day.”

And in yet another change, NACHA says it will speed up same-day funds availability by mandating that funds for certain same-day and next-day credit transactions will be available by 1:30 p.m., fully three-and-one-half hours sooner than under the existing rules. This move takes effect on Sept. 20. 2019, before the other two. “There was a need to make funds available [sooner],” says Larimer. “That’s a big benefit.”

Larimer says it’s too soon to contemplate any further enhancements to same-day ACH, which was introduced for credits two years ago and for debits in September of last year. The 44-year-old ACH network connects virtually every U.S. financial institution. “Right now we’ll be focused on getting these [enhancements] into production,” she says. Still, one possible candidate for a future change, she says, has to do with processing for holidays and weekends. “It’s early days,” she adds. “Right now, our job is to get these [new changes] implemented as seamlessly as possible.”

The latest data from NACHA indicates there were almost 41 million same-day transactions in the quarter ended June 30, a 243% jump over the same period in 2017. Before the introduction of same-day processing, which is part of a faster-payment trend in the U.S. and world markets, ACH transactions typically settled the next day.