After in-depth discussions regarding the need to speed the ACH process and alternative approaches, NACHA has issued an official Request for Comment for Same Day ACH. Released Tuesday (Dec. 9), the RFC outlines a proposal that would allow ACH payments to be cleared and settled within the same business day, instead of the current two- or three-day window.
"In today’s environment, everyone wants things faster, including payments," said Janet O. Estep, president and CEO of NACHA. "Moving forward now signals an immediate, tangible commitment to provide choices for the consumers, businesses and government agencies who want to move money more quickly and efficiently, directly between bank accounts."
The Same Day ACH proposal reflects a revised process from an earlier proposal in 2012, which did not pass the NACHA board vote. This time around, NACHA believes there are important elements that, have been enhanced to address shortcomings of the prior proposal. One essential change includes certainty of funds availability. Under the revised proposal, funds would need to be available by 5 p.m. local time for customer access. In addition, new windows have been established for cutoffs to accommodate both east and west coast users.
High dollar amounts as well as international transactions would be excluded, but all other transactions would be allowed, including both debit and credit transactions. Dollar thresholds would be limited to $25,000.
Using an expert, third-party consultant to conduct independent research, NACHA estimates that ACH originators would generate approximately 1.4 billion Same Day ACH transactions annually. These transactions would come from four primary use cases: B2B, same-day payroll, urgent bill payment, and account-to=account transfers.
To ensure customers have ubiquitous access to the product, all RDFIs (Receiving Depository Financial Institutions) would be required to make the changes in systems and processes to allow Same Day processing. As a result, the proposal includes an interbank fee to help RDFIs recover their costs. The proposed fee would be 8.2 cents per transaction, paid by the originating financial institution. Included with the suggested fee are intervals for re-evaluating the methodology, with the opportunity for a fee reduction, should volumes exceed planned projections.
In order to ease the implementation effort, NACHA is also planning a three-year phasing approach before all functionality is available. This process would begin September 2016.
Timing for the RFC comes as multiple entities are getting into the fray to announce similar solutions. The Federal Reserve gave some preliminary insights into its roadmap to facilitate a near-real-time system earlier in October. That same week, The Clearing House, a payment processor and association owned by 24 of the largest global commercial banks, announced a multi-year effort to build a real-time payment processing system. These approaches could complement same-day ACH but will likely take longer to implement.
"Same Day ACH is an essential step to move payments faster," Estep said. "It creates a solid foundation on which to build innovative services that meet today’s demands and tomorrow’s needs. We look forward to hearing feedback on the proposal and to moving forward with Same Day ACH."
The proposal is open for comment until February 6, 2015.