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Same Day ACH: Factors Treasurers Should Keep in Mind

  • By Andrew Deichler
  • Published: 10/19/2015
nachasessionafp1DENVER – A key concern for corporate treasurers about NACHA’s same-day ACH initiative was addressed Monday morning at the 2015 AFP Annual Conference. While corporates are not obligated to initiate same-day ACH transactions, they will be obligated to accept them.

Janet Estep, president and CEO of NACHA, provided attendees with an overview of the same-day ACH, which begins in September 2016 for ACH credits. A year later, it will be available for ACH debits. She was quick to clarify that while same-day ACH might be referred to as “faster payment”, it should not be confused with real-time payment.

Estep emphasized that it is not NACHA’s intention to replace current, next-day ACH. “We’re not trying to duplicate what’s already working well,” she said. “We’re trying to identify gaps, and determine how same-day ACH can address some of those gaps.” Furthermore, Estep added that NACHA expects over 60 percent of the future ACH volume to come from existing ACH. So next-day isn’t going away.

Corporate concerns

Estep addressed several key concerns corporate treasurers have about same-day ACH. Just like financial institutions, corporates are no way obligated to initiate same day ACH transactions. “It is an option; not all ACH transactions will be moving to same-day,” she said. “So as an originator, think about where it might be helpful to send same-day ACH transactions.”

What is not optional for treasurers, however, will be receiving same-day ACH payments. Just as same-day ACH will be mandatory for all receiving financial institutions; any corporation may begin receiving same-day ACH credits as of September next year. “So think about your operations,” Estep said. “If you have downstream accounts—if you have consumers paying a bill or other businesses paying you—then you want to recognize that that payment came on the settlement date. There’s an obligation to make sure that the downstream accounts are updated in a timely manner. So it’s a good reason to be thinking about how you now pay attention to funds coming in—they could be same-day, even if you’re not originating. Everyone potentially will be receiving.”
Additionally, once same-day ACH kicks in next year, corporate treasurers will have to be very careful about the effective date of the transaction. If you don’t want it to process same-day, then the effective date will need to be set at a future date, not the date of the transaction. “Over time, some entities have not paid attention to the effective date,” Estep noted. “The effective date does need to be accurate. So start that checking now. If you transmit a transaction on today’s date, with an effective date of today, it will move same-day.”

Magnus Carlsson, AFP’s manager of treasury and payments, added: “It's a good idea for treasurers to start looking into this now to avoid any surprises, because starting in September next year same-day transfers will begin to drop in.”

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