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The Road to Same Day ACH

Posted by Alison Arthur on 11 Nov 2019


Money movement in the United States is powered by payment rails, and one of the core networks is the Automated Clearing House (ACH). From settling bills with service providers to direct deposit of paychecks, ACH payments streamline credits and debits in often unseen ways. In 2018, more than 23 billion payments were made via ACH, accounting for $51 trillion in value. ACH payments can provide convenience and peace of mind to consumers while automating business processes and reducing the costs of payments acceptance.

The Move to Same Day ACH

In 2015, the Electronic Payments Association® announced Same Day ACH, an amendment to the National Automated Clearing House Association’s (NACHA) Operating Rules, designed to move payments faster. Historically, most ACH payments were settled within one to two business days. Same Day ACH was introduced to enable the same-day movement of money for almost any ACH transaction.

Who Benefits from Same Day ACH?

Same Day ACH is designed to make payments faster, more efficient, less risky, and more cost-effective. In addition, NACHA identified specific use cases for Same Day ACH including the following:

  • Same-day payrolls – to pay hourly workers, make late or emergency payrolls, and allow employees faster access to their pay
  • Faster bill payments – to let customers make on-time payments the day their bills are due, helping to avoid late fees and penalties
  • Business-to-business payments – to facilitate the settlement of invoice payments made between trading partners
  • Disbursements – to make payouts (such as insurance claims) on the same day, eliminating the time lag associated with paper checks

Same Day ACH Implementation: Initial Three-Phase Approach

Same Day ACH was initially implemented in three phases, with the third and final phase executed on Friday, March 16, 2018. Here is a synopsis of the three original implementation phases.

Phase 1: Effective September 23, 2016

Phase 1 of Same Day ACH applied to credits only (up to $25,000). The introduction of Phase 1 created two file submission windows at 10:30 am ET and 2:45 pm ET, with settlement times of 1:00 pm ET and 5:00 pm ET, respectively. Funds were made available to the receiver at the end of the business day when the file was submitted.

Phase 2: Effective September 15, 2017

Phase 2 allowed the same day settlement of debits in addition to credits. The file submission windows and settlement times reflected what was introduced in Phase 1.

Phase 3: Effective March 16, 2018

Phase 3 accelerated the availability of funds to the receiver. Phases 1 and 2 required that funds be available at the end of the day when the file was submitted. Phase 3 required that funds be available to the receiver by 5:00 pm (local time) on the day that the file was submitted.

Expansion of Same Day ACH

After completing its third implementation phase in 2018, NACHA voted to expand Same Day ACH’s capabilities even further by announcing three key changes. The first change (effective September 20, 2019) made funds available more quickly for certain Same Day and next day ACH credits, expediting deposits and disbursements for businesses and consumers.

The second change (effective March 20, 2020) will increase the maximum dollar limit for Same Day ACH transactions to $100,000. The final change (effective March 19, 2021) will expand the time window for submission of Same Day ACH transactions to the ACH network by adding an additional two hours to the existing timeframe.

The Bottom Line: Same Day ACH is just one part of a broader movement toward faster, more efficient transactions. Read our take on faster payments here.

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Alison Arthur Product and Content Marketing Manager Alison creates timely product marketing and thought leadership content that keeps Alacriti's community informed on the latest developments in billing and payments technology. With a background in payments and financial services, Alison specializes in composing content related to technology, security, compliance, and overall industry trends.

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