Faster Payments in the U.S. just got a little closer to reality.
The Federal Reserve announced Sept. 23 its approval for enhancements to NACHA's Same Day ACH solution which goes into effect a year from today.
The enhancements will require receiving depository financial institutions (RDFIs) to participate in the service and originating depository financial institutions (ODFIs) to pay a fee to RDFIs for each same-day ACH forward transaction. And according to the Fed: "The enhancements are intended to align the Reserve Banks' same-day ACH service with recent amendments to NACHA's ACH operating rules and will facilitate the use of the ACH network for certain time-critical payments, accelerate final settlement, and improve funds availability to payment recipients."
With the Fed's support, NACHA's Same Day ACH rule will gain ubiquitous same-day capability for nearly any ACH transaction.
“With the Federal Reserve’s support of the NACHA rule, the industry’s commitment to modernizing the payments system and enabling a ubiquitous faster payment option can be fully realized,” said Jan Estep, President and CEO of NACHA. “Same Day ACH is a game changer as it will enable new options for consumers, businesses and government entities that want to move money faster, and will serve as a building block for enabling payments innovation in the development of new products and services.”
Same Day ACH will be rolled out starting Sept. 23, 2016, in the following three-phase process:
- ACH credit transactions will be eligible for same day processing, supporting use cases such as hourly payroll and person-to-person (P2P) payments and same-day bill pay.
- Same-day ACH debits will be added, allowing for a wide variety of same day consumer bill payment use cases like utility, mortgage, loan and credit card payments.
- Introduction of faster ACH credit funds availability requirements for RDFIs; funds from Same Day ACH credit transactions will need to be available to customers by 5 p.m. RDFI local time.
NACHA’s Same Day ACH will expand and improve the next-day ACH Network capabilities, and enable same-day clearing and payments settlement via ACH. In May, NACHA’s membership, which consists of most financial institutions in this country directly or through regional associations, voted in favor of a change to NACHA operating rules that adopts Same Day ACH. As part of the new rule approved by the membership, there will be two additional same-day settlement windows. Any originating institution can offer products that clear on the same day, knowing that all receiving institutions will have the capability, as required by the rule change, to process the transactions that same day. The rule requires that all NACHA members have the capability to process any ACH transaction within the same day — a move that can help businesses and consumers move money faster.
The Clearing House (TCH) also shared its support of the Fed's decision to support NACHA's Same Day ACH. TCH is the only private-sector ACH operator in the country, and processes approximately 50 percent of all commercial ACH volume in the U.S.
TCH announced last October that it was developing its own real-time payments system, which is also aimed at providing ubiquitous real-time payments for consumers and businesses directly from their financial institution accounts.
“The industry is committed to making progress in faster payments and is taking action to support faster payments innovations and full adoption of NACHA’s Same-Day ACH rules is one important step in that effort,” said Dave Fortney, Executive Vice President for Product Development and Management at The Clearing House.
“Now that the Federal Reserve has followed suit in confirming its support for NACHA’s Same-Day ACH rules, consumers will soon reap new benefits in faster payments that they deserve. Adoption of Same-Day ACH settlement will both complement and build momentum for TCH’s real-time payment system initiative. Same Day ACH and real-time payments are examples of how the industry is listening to their customers and working to provide them distinct payment options that will enable them to choose the speed and features they desire for their payments,” Fortney said.
The Faster Payments Imperative is the subject of a full-day conference on October 6th in Chicago sponsored by PYMNTS and NACHA. Esther George, Federal Reserve Board President will deliver the keynote. In light of the Fed’s decision to support NACHA Same Day ACH, we are making adding slots for those who want to better understand the impact of Same Day ACH on faster payments in the U.S.
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