NACHA Finally Brings Faster Payments in Three Phases to America

The Electronic Payments Association announced today that its approval for Same-day ACH, an amendment to the NACHA Operating Rules to move payments faster. The new rule issued would enable a ubiquitous same-day capability for virtually any ACH transaction, creating options for the businesses, governments and consumers who want to move their money faster.

Same-day ACH will be implemented in a phased approach as follows:

  • In Phase 1, ACH credit transactions will be eligible for same-day processing, supporting use cases such as hourly payroll, person-to-person (P2P) payments and same-day bill pay.
  • In Phase 2, Same-day ACH debits will be added, allowing for a wide variety of consumer bill payment use cases like utility, mortgage, loan and credit card payments.
  • Phase 3 introduces faster ACH credit fund availability requirements for RDFIs (Receiving Depository Financial Institutions); funds from Same-day ACH credit transactions will need to be available to customers by 5 p.m. RDFI local time.

Phase 1 is scheduled to begin September 23, 2016. There are more aspects involved in this phase-wise approach:

  • Firstly, the morning same-day window to be modified to allow for more time to process transactions, with settlement occurring at 1:00 p.m. ET. This new settlement time would become effective in Phase 1 instead of Phase 3, as originally proposed.
  • Secondly, an option for an additional method for ODFIs (Originating Depository Financial Institutions) to use (at their discretion) with their originators to determine intent for same-day settlement.
  • Finally, an adjustment to the methodology for calculating the same-day entry fee to exclude opportunity costs from its calculation.

Same-day ACH will be built upon existing next-day ACH Network capabilities and establish a new option for same-day clearing and settlement via ACH. Under the rule, two new same-day settlement windows will be added to the ACH Network, increasing the movement of funds between financial institutions from once each day to three times each day. The rule also requires that all RDFIs receive same-day transactions and provide faster funds availability to customers. Additionally, the rule establishes the methodology for a same-day entry fee as a mechanism for RDFIs to recover some of their costs for enabling and supporting mandatory receipt of Same-day ACH transactions.

NACHA estimates Same-day ACH payments will be generated from ten primary use cases and 63 sub-use cases, including same-day payrolls, expedited bill payments, business-to-business (B2B) payments, and account-to-account (A2A) transfers. The majority of Same-day ACH payments are expected to enhance the existing ACH applications, giving consumers and businesses the choice of speed.