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Same-Day ACH: What treasury professionals need to know

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Same-Day ACH: What treasury professionals need to know

Very soon, treasury professionals will be able to conduct Same-Day ACH transactions, allowing them to move money at a much faster pace.

NACHA, the electronic payments association, adopted a rule in May 2015 that enables the same-day processing of nearly any ACH payment. NACHA currently shifts money between financial institutions on a next-day basis, making the move to same-day transactions a game changer for the industry.

In general, nearly all financial institutions will be required to receive Same-Day ACH payments. “You can absolutely be assured that your payment will get to absolutely every financial institution in the United States, regardless of size, because everyone is required to participate,” said NACHA President and CEO Jan Estep in an interview with PYMNTS.com.

Same-Day ACH implementation presents corporate treasury professionals with a number of benefits, and some challenges as well.

Keep reading for more information about these opportunities and issues so you can prepare your organization for its adoption.

Implementation timeline

Same-Day ACH will become effective in three phases over several years. This will allow treasury professionals and banking institutions to gradually acclimate to the faster processing environment and spread implementation costs and efforts over time. Standard ACH schedules and capabilities will not be impacted by Same-Day ACH.

Phase 1: September 23, 2016

On this date, only ACH credit transactions will be eligible for same-day processing. You will be able to create a credit up until your bank’s cutoff time. The credit will then be processed by the ACH operator and posted to the receiver’s account no later than the end of the RDFI’s (Receiving Depository Financial Institution) processing day. Be aware that there are no guarantees that the bank receiving the payment will make funds available immediately. This will vary bank to bank and in many cases, the payee may not be able to use the funds until the next business day.

Phase 2: September 17, 2017

On this date, Same-Day ACH debit transactions will be added. This phase will encompass a broad range of additional payment types, including consumer bill payments for such things as credit cards, loans, mortgages and utilities.

Phase 3: March 16, 2018

On this date, same-day credits must be made available to customers for withdrawal no later than 5 p.m. in the RDFI’s local time on the settlement date. The goal is to make certain that Same- Day ACH credit recipients can access funds in their accounts by the end of the business day.

For the full details about Same-Day ACH, click here

 

This document is designed to provide general information only and is not comprehensive nor is it legal advice. If legal advice or other expert assistance is required,the services of a competent professional should be sought. KeyBank does not make any warranties regarding the results obtained from the use of this information.Key.com is a federally registered service mark of KeyCorp. ©2016 KeyCorp.KeyBank is Member FDIC.  E86695 160725-1089

 

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KeyBank Commercial Banking is focused on helping middle market businesses get the resources they need to succeed. Our relationship managers and industry experts understand the trends that drive the market, providing insights and advice to make managing a business in a complex and competitive environment easier to navigate. Our experience and expertise bring clarity to the issues that impact middle market business leaders, to help manage today’s challenges while planning for the future. KeyBank is Member FDIC.

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