Separating Same-Day ACH Fact from Fiction
With information and experiences now instantly at our fingertips, waiting for next-day or two-day ACH payment processing can seem like an eternity. And with more nontraditional payment options entering the market each year, ACH payments may need to become faster to stay relevant. To meet these changing expectations, same-day ACH processing is now a reality, bringing new opportunities to financial institutions and billers.
NACHA's new same-day ACH rule creates the ability for all U.S. financial institutions to offer same-day ACH processing. The first phase of the rule takes effect this month, when every financial institution must be ready to process incoming same-day ACH credits. The second and third phases of the rule are scheduled to be implemented in 2017 and 2018.
Same-day ACH can help financial institutions stay relevant by offering a valued, attractive service to consumers, while building important incremental revenue streams.
Any major regulatory change requires an investment of time and energy for financial institutions and billers – and likely some amount of uncertainty. However, same-day ACH can help financial institutions stay relevant by offering a valued, attractive service to consumers, while building important incremental revenue streams. Let's separate same-day ACH facts from fiction.
Fiction: Same-day ACH has a limited number of uses – primarily for missed payroll – so the volume would be negligible.
That statement is incorrect. Same-day ACH actually has many uses and the major use cases are projected to generate nearly 1.4 billion transactions in the next decade, according to NACHA. Virtually all ACH transactions, including credits and debits, would be eligible for same-day processing with the new rule. In addition to payroll, same-day ACH use cases include expedited business-to-business, business-to-consumer, bill payment and person-to-person payments.
Fiction: Only businesses will be interested in same-day ACH.
The fact is that while the majority of same-day ACH requests will likely be coming from businesses, financial organizations should not discount the potential of promoting same-day processing for consumer payments.
Fact: Consumers want same-day processing.
More than eight in 10 households say real-time or same-day processing is "important" or "very important" to them, according to the Eighth Annual Billing Household Study from Fiserv.
Fiction: Your wire fees will be cannibalized once same-day ACH goes into effect.
That's not the way we see it. While some wire transactions may shift to ACH, financial institutions shouldn't expect wire volumes to significantly decline. Wire transfers will still be the payment of choice in many scenarios, especially when specific attributes of a wire are required.
Fact: Your accounting and finance departments need to be included in same-day ACH training.
These critical areas of your organization must understand how the same-day ACH rule will impact balancing and federal reconcilement – and have a deep understanding of the rule and its day-to-day impact. Education, training and communication are critical components of a seamless implementation of the current and future phases of the same-day ACH rule.
The Same-Day ACH Opportunity
According to NACHA, 99 percent of the current ACH Network volume is eligible for same-day processing. As a matter of fact – not fiction – this wide availability opens the possibility for financial institutions to think creatively, explore new opportunities and introduce a number of new products and services. Don't miss this opportunity to stand out from the competition.