Same-Day ACH Talk Turning Into Action

After a lot of talk, there’s about to be some action in same-day automated clearing house payments, according to NACHA, the ACH network’s oversight body.

NACHA reported last month that nearly all of the nation’s biggest financial institutions plan to originate same-day ACH payments this year. The January-February telephone survey of executives at 22 of the nation’s top 25 ACH originators found that 95%, which works out to all but one of the respondents, plan to offer same-day ACH origination services by year’s end.

Under Herndon, Va.-based NACHA’s same-day ACH rule, banks and credit unions will be required to receive same-day ACH transactions beginning Sept. 23, 2016, but originating ACH payments, including same-day payments, is optional.

NACHA conducted the survey to get a read on financial institutions’ same-day ACH plans. Same-day ACH, which would speed up settlement by about a day, is the subject of a big and sometimes controversial effort at NACHA. And faster payments in general are the focus of major projects by not only NACHA, but the Federal Reserve and companies such as The Clearing House Payments Co. LLC and Early Warning Services, the new owner of the clearXchange person-to-person payments network.

NACHA said its survey also found that the strongest use cases for same-day ACH are payroll transactions and business-to-business payments. All of the respondents plan to offer same-day payroll payments, and 95% said they’ll offer same-day B2B ACH payments in addition to expedited bill pay and person-to-person payments.

“Financial institutions see the value in providing new, faster payment options to their customers with certainty and surety, and same-day ACH allows them to do that in 2016,” NACHA president and chief executive Janet O. Estep said in a statement. “These findings support our earlier research that same-day ACH volume will come from use cases like payroll and B2B payments.”

Of the financial institutions planning to originate same-day ACH this year, 86% said they’ll offer the service to all of their clients, while 14% said they’ll offer it to select clients based on need, according to NACHA.

NACHA also is working with regional ACH associations to assess the readiness of smaller financial institutions for same-day ACH. One such association, Richmond, Va.-based EastPay, surveyed members at its March conference, where 64% of respondents said they plan to originate same-day ACH payments, NACHA said.

Melissa Lowry, head of product and marketing at clearXchange, a P2P service developed by some of the nation’s largest banks, says same-day ACH complements the real-time payment system clearXchange is rolling out. More than half of clearXchange’s transactions so far are in real time, but its system uses the ACH for settlement in other cases.

While research shows consumers consistently favor the fastest possible payment option, not every transaction needs to be in real in time, according to Lowry. “There’s a place for both,” she tells Digital Transactions.

Three Key Deadlines in Same-Day ACH

Phase 1 | Sept. 23, 2016Includes credits only with funds availability at end of receiving depository financial institution’s processing day.

Phase 2 | Sept. 15, 2017Includes both credits and debits with funds availability at end of RDFI’s processing day.

Phase 3 | March 16, 2018Includes both credits and debits with funds availability required by RDFI at 5:00 p.m. local time.

Source: Federal Reserve Bank Services

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—Jim Daly