Same day payments: How ACH changes will affect companies

It’s full speed ahead in the realm of electronic transactions.

Reason: The Automated Clearing House (ACH) is NACHA in same-day processing over the next few months.

Your Payroll and Accounts Payable staffers may love the convenience factor.

Then again, pesky vendors and customers – plus employees – may expect quicker turnaround than ever before.

For now, next-day processing is still the fastest option available for ACH transactions.

But now that the rule changes have been finalized, two new settlement windows will be added, announced NACHA (formerly the National Automated Clearing House Association).

Transactions submitted by 10:30 a.m. will be settled at 1:00 p.m., and transactions submitted by 3:00 p.m. will be settled at 5:00 p.m.

Note: That’s Eastern Time.

In the proposed rule changes, the times of the earlier window had been 10 a.m. and 12 p.m. Also in the proposed rule changes, the earlier window wasn’t going to be up and running right away.

Turns out, both same-day windows will be available in Phase 1.

Changes being phased in

Here’s the timeline for ACH network changes:

• Phase 1, Sept. 23, 2016 (was set for Sept. 16, 2016) – same-day credit transactions are a go
• Phase 2, Sept. 15, 2017 – the addition of same-day debit transactions, and
• Phase 3, March 16, 2018 – the Receiving Depository Financial Institution (RDFI) will need to make funds from credit transactions available by 5 p.m. local time.

Every RDFI will be required to receive same-day transactions. But be prepared for the cost to be passed on to you.

The rules allow an RDFI to charge a Same Day Entry Fee. The allowable fee is 5.2 cents for each transaction, down from 8.2 cents as proposed.

The benefits for you

Same-day ACH transactions will help you ensure timely payments if you have a late or emergency payroll.

Your company may benefit in other ways, too. Business-to-business invoice payments, along with remittance information, will move faster.

Of course, next-day transactions will still be an option.