Same Day ACH has been a focus for banks since it was proposed in early 2014. Now, it’s coming to life. Phase 1 of the Faster Payments initiative launches on Sept. 23. Starting on this date, all financial institutions in the U.S. will be able to accept Same Day payments, with the option to originate them.
For the August edition of the PYMNTS.com Faster Payments Tracker™, powered by NACHA, PYMNTS interviewed Steve Kenneally, Vice President of the American Bankers Association, to get his take on this important step forward for banks, FinTech players, businesses and customers.
Here’s a sneak peek:
One central reason Kenneally expects Sept. 23 to go smoothly is that the ACH network is already being used by banks and consumers.
“It’s providing an enhanced service that everybody is already familiar with, it’s not a brand new payments system where people have to figure out, ‘How do I use this? Do I know if the person I’m sending it to is going to accept it?’” Kenneally explained. “The cool thing about that is that the infrastructure was already in place, we didn’t have to introduce a lot of new rules for any new connectivity, because all the banks were already connected. That’s the value of using a legacy system.”
Because Faster Payments is being implemented on an existing ecosystem, the first phase of Same Day’s launch won’t feel like a major dive into the unknown, but rather a natural next step toward ubiquitous digital financial efficiency, Kenneally said.
What’s happening in the world of Faster Payments
As Faster Payments become a reality, the issue of fraud is taking center stage. Many bank customers fear that quicker financial transactions will lead to an uptick in digital hacking, which would be detrimental for businesses, consumers and financial institutions across the country. Despite the public’s anxieties, likely magnified by the recent SWIFT heist, Marianne Crowe, VP of payment strategies at the Federal Reserve Bank of Boston, stated that the Fed will not be revising its Faster Payments security strategies, as safety has been a priority since the start. Beyond fraud, fees have also been a focus of banks and consumers, as many financial institutions are considering charging extra for advanced Same Day features.
To download the August edition of the PYMNTS.com Faster Payments Tracker™, powered by NACHA, click the button below.
About The Tracker
The PYMNTS Faster Payments Tracker™, powered by NACHA, is your go-to resource for staying up to date on a month-by-month basis. The Tracker highlights the contribution of different stakeholders, including institutions and technology coming together to make this happen.