There are big changes coming to the world of electronic payments. NACHA, the electronic payments association that develops the operating rules and business practices of the automated clearing house (ACH), recently announced some new rules affecting ACH payments. It’s important to understand these changes because NACHA serves as the ACH Network administrator and is responsible for creating and enforcing the NACHA operating rules, further developing and growing the ACH Network, and enforcing the NACHA rules within the ACH Network. Fortunately for you, we’ve outlined the five biggest things your company needs to know to ensure compliance within the ACH Network in the coming months.
1. Same-day ACH
Beginning on September 23, 2016, NACHA will begin rolling out the capability for same-day processing of nearly any ACH payment, including both debits and credits. If you are a Receiving Depository Financial Institution (RDFI), you will be required to receive same-day ACH payments. RDFIs will also be obligated under the new rule to make funds available from same-day ACH credits, such as payroll direct deposits, by 5:00 pm at the RDFI’s local time. This new rule is not expected to impact current ACH schedules or capabilities.
2. Implementation won’t happen overnight
To allow businesses time to prepare for the faster payments and to ease the implementation, same-day ACH capabilities will become effective over the course of three phases:
- Phase 1 will become effective on September 23, 2016
- Phase 2 will become effective on September 15, 2017
- Phase 3 will become effective on March 16, 2018
Phase 1 will begin with the processing of same-day credits. It is the goal of NACHA to ease the implementation effort and allow users ample time to familiarize themselves with the faster processing environment. To make the process as smooth as possible, be sure to download NACHA’s checklist for implementation.
3. There will be a fee for same-day ACH transactions
The new same-day ACH rule includes a “Same Day Fee” per every same-day ACH transaction. The purpose of this fee is to ensure that Receiving Depository Financial Intuitions (RDFIs) will be able to recover their costs for enabling and supporting same-day ACH. The Originating Depository Financial Institution (ODFI) will be responsible for paying this fee to the RDFI.
4. New clearing windows will be provided
To facilitate same-day ACH payments, two new clearing windows will be created by ACH operators.
- A morning submission deadline at 10:30 a.m. (ET); settlement will occur at 1:00 p.m. (ET)
- An afternoon submission deadline at 2:45 p.m. (ET); settlement will occur at 5:00 p.m. (ET)
5. Large-dollar transactions and international transactions are ineligible for same-day ACH
Transactions greater than $25,000 are deemed too risky for same-day processing. To mitigate these risks, ACH operators will instead assign next-day settlement to any large-dollar transactions. International transactions will also be ineligible for same-day ACH because they require screening from the Office of Foreign Assets (OFAC) of the United States Department of Treasury. NACHA determined that international transactions received later in the day would place too much of a burden on a financial institution to complete the OFAC screening fast enough to ensure same-day ACH.
To learn more about these changes and how you can ensure your business remains compliant, see this update from NACHA.