Same-Day ACH is Coming

We live in an instant messaging, instant streaming, instant gratification, Instagram world. Since the inception of the ACH Network in 1974, ACH payments have been processed on a next-day or two-day basis. Today, for many payments, that’s just not fast enough.

The rule and timeline

On May 19, 2015, NACHA, the National Automated Clearinghouse Association, announced the adoption of a Same Day ACH rule. The new rule means that soon you can initiate ACH payments, and your payees can receive available funds, on the same day within the U.S.

Instead of one deadline a day for ACH transactions, you’ll have three options: a new morning Eastern Time (ET) deadline for same-day settlement, a new afternoon ET deadline for same-day settlement, and the existing evening deadline for next-day settlement.

Same-day functionality will be implemented in three phases:

  • Phase 1: ACH credits — September 2016
  • Phase 2: ACH debits — September 2017
  • Phase 3: Faster funds availability, 5:00 p.m. local time — March 2018

How will you use Same Day ACH?

All ACH transactions are eligible for same-day processing with two exceptions: international transactions (IATs) and transactions valued above $25,000 are ineligible. However, Same Day ACH transactions are considered premium transactions and, as such, will incur a surcharge, so you’ll likely use the service selectively. Here are some use cases and examples to consider for your company and yourself:

  • Hourly and emergency payroll (also bonuses, off-cycle payroll)
  • Expedited business-to-consumer payments (insurance payouts)
  • Faster business-to-business payments (goods held until payment is received)
  • Accelerated merchant card settlement (on digital and mobile sites)
  • Consumer-to-business online bill payments (due-date payments)
  • Person-to-person payments (split bills, emergencies)

Get ready for Same Day ACH

Because Same Day ACH has a different risk profile and pricing schedule than next-day ACH, you’ll need to be set up before you can initiate same-day transactions. Talk to your treasury management representative to start the process.

Your payroll and accounts payable systems also will need to be set up. You must clearly identify Same Day ACH payments by putting the same-day effective date in the batch header. This is the date on which you want the payments to settle — not the payroll period or other date from your payment system.

There is a cap of $25,000 on same-day transactions, and dividing a higher-value payment into two or more separate transactions to get around this cap is a rule violation. Logic should be programmed into your internal application to screen out payments above the $25,000 limit.

Your accounts will be debited for outgoing and credited with incoming same-day payments sooner than before, so you may need to manage your intraday liquidity more closely. Subscribe to intraday bank reports to stay on top of your cash position.

For more information, contact your Wells Fargo representative or fill out the Contact Us form on this site.