Same day ACH gains momentum, support from big banks
December 15, 2014

The automated clearinghouse has long needed an update. In a time when consumers and businesses alike have enjoyed the benefits of having fast payments with credit and debit cards, ACH payment processing has long moved at a snail's pace of two to three business days. Despite the reliability and security of ACH, many B2C and B2B businesses are hesitant to use it. Even with integrated payments systems, the problems of interbank payments aren't easily addressed. That is why there have been considerable efforts in the last few years to address this by implementing same-day transactions in ACH processing.

Now, after some pressure from the Federal Reserve, the public controller of ACH payment processing, the National Automated Clearing House Association is pushing forward in earnest with a plan to implement a same-day payments system. The organization, which represents the private sector's stake in ACH, previously attempted to pass rules for same-day payment back in 2012, only to be rejected for various reasons.

A new direction
PYMNTS reports that NACHA is taking a different approach that seems far more accommodating to some concerns. The organization opened an official Request for Comment on a new proposal, which addresses several key concerns. Among them is the availability of funds to the payee. In the original proposal, the same day window was closed at 3 PM Eastern time. This left many individuals and businesses on the West Coast cold because transactions had to be completed by noon. The new proposal allows variable windows so that funds would be available to any payee by 5 PM local time.

Another critical element that has gained a significant amount of support is the use of transaction fees. Previously, banks weren't allowed to use any transaction fees for making same-day payments. This made large banks angry, since the transition would require technology upgrades that they would have to pay out of pocket. Now, the new NACHA proposal allows banks to impose a flat 8.2 cent transaction fee for each same-day transaction. As a consequence, American Banker reported that the larger banks are far more supportive of implementing the technology.

The NACHA RFC suggests that, barring any other procedural delays, the process of implementing same-day transactions would begin in earnest in 2016, just more than a year from the initial proposal. Going in phases, same-day ACH payment processing is expected to be implemented in a three-year period. The RFC is open to the public until Feb. 16, 2015.

Nexus: G-WEBCD2