NACHA takes steps advancing same-day ACH

The push for faster payments appears poised to gain momentum, as evidenced by news that NACHA – the Electronic Payments Association is expanding its same-day ACH (automated clearing house) program with a new later deadline, higher transaction limits and faster availability options.

Same-day ACH slashes the time it takes to clear and settle ACH payments – from a few days to a few hours. NACHA began ushering in same-day ACH applications with a series of rule changes that began taking effect in 2016. The last of these – allowing for same-day settlement of ACH debits – took effect last fall. ACH debits are commonly used to collect consumer bill payments.

NACHA reported nearly 41 million same-day payments were processed through the ACH during the second quarter of 2018, representing a 243 percent increase over the same quarter of 2017. Overall network volume was up 6.2 percent over the second quarter of 2017. In all, there were 5.7 billion credit and debit payments sent via the ACH during the second quarter of this year, according to NACHA.

“Since the initial adoption of same-day ACH, business users of the ACH have been asking for enhancements,” said Jane Larimer, chief operating officer at NACHA. Changes to the NACHA rules announced on Sept. 14, 2018, address those requests, she added.

New, later deadline

For example, banks now can take advantage of a new, later deadline for submitting ACH files on behalf of business customers. (The ACH cannot be accessed by businesses directly as it is a bank-to-bank network.)

Today, the latest a bank can submit ACH transactions for same-day settlement is 2:45 pm Eastern Time (11:45 a.m. Pacific Time). But beginning in September 2020, they will have the option of submitting files as late as 4:45 p.m. ET (1:45 p.m. PT). This will allow businesses more time to submit transactions like direct deposit of payroll and other time-critical payments to their banks, NACHA noted.

Effective March 2020, the cap on transactions that qualify for same-day settlement will rise to $100,000. Today, transactions exceeding $25,000 do not qualify for same-day ACH. NACHA said it expects the new higher limit to attract more business-to-business (B2B) transactions to same-day ACH; under the current limit only about 89 percent of B2B payments sent via the ACH qualify for same-day processing and settlement.

A third rule change disclosed by NACHA creates a new funds availability standard for same-day ACH credits. For credit files submitted by the current 2:45 p.m. ET same-day settlement deadline, receiving banks can make funds available to customers by 1:30 p.m. local time. This change takes effect in September 2019.

“NACHA continues to expand ACH network offerings to make it easier to use the ACH,” Larimer said in a statement. “With these enhancements to same-day ACH, the ACH network will have a comprehensive set of faster payments capabilities available to all financial institutions and their customers.”

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