Payments group announces same-day ACH processing rule for U.S. banks
The Electronic Payments Association (NACHA), the administrator of the Automated Clearing House (ACH) network, announced on Friday the launch of the first phase of same-day payments and settlements for U.S. banks.
ACH is the electronic network for financial institutions that moves money from one bank account to another through direct deposit and payments.
Under same-day ACH rules, all financial institutions will be able to receive same-day transactions beginning on Friday, NACHA said in a statement. Prior to the new rules, ACH payments processing took two to four business days.
The new rules could have an impact on how consumers and more than 80 percent of the country’s nearly 28 million businesses move some $40 trillion in funds every year. The change could dramatically affect the nation’s cash flow control, profit margins, consumer experiences, and business models.
Although sending same-day transactions by financial institutions and their customers is optional, it is expected that many will begin enabling the origination of same-day payments on Friday, NACHA said.
“While other payments initiatives have been developed to support the demand for faster payments, Same-Day ACH provides absolute certainty that your payment can get to absolutely anyone else with a bank account on the same day, regardless of which bank or credit union they use,” said Janet Estep, president and chief executive officer of NACHA.
Phase 2 of Same-Day ACH will launch on Sept. 15, 2017 and will introduce faster processing and settlement of debit transactions, in addition to credit transactions. This phase will support additional-use cases such as consumer bill payments for utilities, insurance, telecoms, mortgages, as well as loan and credit card payments.
As a result of the ACH rules, Iowa-based Dwolla, a payment network that allows individuals and businesses to send, receive and request payments over the ACH network, said on Friday it updated its system this week to support the new same-day payment rules.
Dwolla’s new feature, which is a pilot program, is part of a programming payment system that it already available to clients. Lampe said Dwolla plans to roll out the new system in the fourth quarter.