A new rule by the Electronic Payments Association (NACHA) will enable same-day ACH payments. NACHA moves money between banking institutions with a guarantee of 48-hour transactions. Generally all financial institutions are required to participate because if the sender participates, the receiving bank must follow suite. When same-day ACH payment is adopted it could change everything, and your business should be ready or it will be left behind.
Here is how the process will work. Same Day ACH payments would be processed twice per day: a morning submission by 10:30 a.m. ET with settlement at 1:00 p.m. ET, and an afternoon submission by 3:00 p.m. ET with settlement by 5:00 p.m. local time. The employee would get access to funds by the end of the bank’s business day (if not sooner). Almost every type of ACH payment will be available for same-day processing. International transactions and transactions below $25,000 are also eligible.
The rule changes will happen gradually over the next three years starting from September 2016. The rules will unfold in three phases:
Phase 1, begins September 23, 2016: the Federal Reserve will release ACH credit transactions for same-day processing at 10:30 a.m. ET and 3:00 p.m. ET-generally for use cases like person-to-person payments, hourly payroll, and same-day bill pay.
Phase 2, begins September 15, 2017: Same day ACH debits will then be added to be utilized by more bill pay uses like mortgage, utility, loan and credit card payments.
Phase 3, begins on March 16, 2018: Consumers will gain access to funds from Same Day ACH credit transactions by 5:00 p.m.
All presented effective dates and subsequent phase descriptions are contingent on receiving written confirmation from the Federal Reserve. The Federal Reserve’s backing is important to ensure Same Day ACH is the same across the 12,000 financial institutions in the U.S.
Although Same Day ACH is a few years from being fully implemented, it will have a major impact on merchants. Merchants should stay alert to any new information that comes out as the rule change moves forward. It is possible that the rules and deadlines can change before the September 23, 2016 deadline. eMerchantBroker.com is a low hassle, low cost payment processor that can help you process ACH Electronic payments. Our agents will protect your transactions and increase your profits.