NEW REPORT: Same Day ACH Gets Its First Sequel

In mid-September, the second phase of the Same Day ACH initiative will roll out across the U.S. faster payments system. But unlike last year’s rollout, which some in the financial industry compared to a Y2K-like event, the industry seems calmer about the upcoming change. Will Same Day ACH Phase 2 generate the same interest and engagement as the last installment in the trilogy?

The September edition of the PYMNTS Faster Payments Tracker™, powered by NACHA, highlights notable news and developments from across the faster payments landscape, including how banks and other financial institutions are preparing for the arrival of Same Day ACH debits and the efforts that regional payment associations are making to ensure their members understand what the changes will entail.

News from around the world of Faster Payments:

The numbers don’t lie – the last fiscal quarter was a busy one for the U.S. faster payment system.

According to the most recent figures from NACHA, 5.3 billion direct deposit and direct payments valued at $11.6 trillion were transferred using the ACH Network in Q2 2017, an increase of 6 percent over the same quarter last year. In addition to direct deposits and payments, NACHA also reported higher P2P payments activity, with 1.3 billion transactions processed in Q2 2017. That reflects a 13 percent spike in P2P payments over Q2 2016.

One of the biggest developments for the faster payments system will arrive in mid-September. On Sept. 15, 2017, Same Day ACH debits will go live and “pending” debit transaction times are going to get shorter. With the service in place, bank customers can avoid late fees by enabling the delivery of funds on the same day.

But the availability of faster debit services also carries risks. For example, bank customers who are not aware of the availability of Same Day ACH debits could be in for a rude awakening if they are not on top of their account balances and accidentally authorize a payment too early.

In anticipation of the confusion, some regional payment associations are stepping up their education efforts on what Same Day ACH Phase 2 will mean for financial institutions. One such educational effort was recently launched by the New England Automated Clearing House (NEACH). The organization recently launched an educational campaign to help member FIs and their customers avoid any unpleasant surprises that may arise as a result of the availability of Same Day ACH debits. Because ODFIs will gain two new settlement windows to clear payments, the campaign is urging members and customers to “Check@5,” a reference to the new 5 p.m. same-day settlement window.

Are FIs ready for Same Day ACH Phase 2?

Last year, when the financial industry prepared for the rollout of Same Day ACH Phase 1, the industry treated the event with the same seriousness as the countdown to the Y2K bug in 1999. Fortunately, the industry’s education and preparedness efforts paid off and last year the first phase of the Same Day ACH rollout went live with no major issues, with two sequels on the horizon.

One year later, Same Day ACH Phase 2 is about to go live and bring further changes, but the industry is offering a more subdued response. Since Same Day ACH Phase 1 went down with no major issues, it’s possible that banks and FIs are acting like they’ve been through this song and dance before and are opting not to get worked up.

For the September Tracker’s feature story, PYMNTS caught up with Laura Steele, president and CEO of Regional Payment Association ePayResources, who urged FIs to avoid getting complacent about the change and how a lack of awareness could lead to “reputational risks” for both sides of a transaction. Plus, Ross McKay, SVP of corporate products for TD Bank, explains why the industry sees the new service as an “incremental change” to the payment network.

To read the feature story as well the latest news and trends from around the Faster Payments space, check out the latest Tracker.

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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.