As of Friday, September 15, 2017, NACHA officially launched Same Day ACH for debit payments. This is the second phase of NACHA’s Same Day ACH initiative.
For the past year, same-day settlement has been available for credit payments. With NACHA now expanding the service to debit payments, corporate treasurers have one more option to make faster ACH payments. Up until now, ACH debits were “next-day” payments that were completed one day after being initiated.
Debits account for nearly 60 percent of overall ACH volume, noted NACHA President and CEO Janet Estep, in a statement. “We expect that use of Same Day ACH debits will grow and become a faster payments method that benefits all users of the ACH Network, from financial institutions, businesses of all sizes, to governments and consumers,” she said.
Fully 92 percent of NACHA’s top originating depository financial institutions (ODFIs) are now ready to originate Same Day ACH debits, according to a recent survey conducted by NACHA. Additionally, 100 percent of U.S. receiving depository financial institutions (RDFIs) should be ready to receive the payments, as is required by the rule.
“What's positive for corporates is that this provides more options in the payments field,” said Magnus Carlsson, AFP’s manager of treasury and payments. “However, corporates also need to think about how these are pull payments that will happen quicker than in the past.”
Benefits and considerations
NACHA noted that billing companies are now able to offer same-day bill payment via their websites and call centers; consumers will be able to complete payments in a single day. This can include bill payments made on due dates; late payments; or payments for the start, end or restoration of service. Billers are also now able to accept and convert checks that settle on a single business day.
Additionally, businesses who use the service will have more insight into the cash they have on hand. “With Same Day ACH debits, consumers and businesses will start to have an additional option for faster payments, and will be better able to track their finances with a clearer sense of their bank account balances,” Estep said.
Same Day ACH debits also allows companies to correct mistakes faster. “Same Day ACH debits will allow corporates to recover more quickly from errors through faster reversals of erroneous payments, and from missed deadlines through faster emergency payments,” said Bill Sullivan, senior director and group manager, industry and government relations for NACHA. “Faster recovery also minimizes the impact on receivers. Take for instance a payroll mistake; employees can still get paid on payday and the errors can get reversed quickly.”
NACHA advises all organizations making debit payments (originators), to check and correct their use of Effective Entry Dates in their ACH transactions—even if they aren’t intending to use the same-day service. It is the responsibility of the originator to accurately date ACH debit transactions so that their customers’ accounts are debited on the correct date. Originators with systems using a default “today’s date” are at risk of incorrectly debiting customers early.
Originators intending to use Same Day ACH for consumer debits should also review their authorization language so that can be easily understood. Under the NACHA Operating Rules, a debit to a consumer account must have clear and readily understandable terms.
The third phase of NACHA’s initiative, which requires funds from Same Day ACH credits to be made available by 5:00 p.m. local time, goes into effect on March 16, 2018.