On September 23, phase 1 of NACHA's three-phase rules change took effect, mandating two same-day ACH clearing/settlement windows for credits only. The subsequent two phases add debit payments in 2017 followed in 2018 by receiving banks being obligated to make credit payments available to receivers by 5 p.m. on the settlement day.

Prior to this change, using legacy ACH, one had to wait one business day for payments to clear and settle. A payment cap of $25,000 along with a mandatory interbank fee of 5.2 cents are other noteworthy differences for same-day ACH items as compared to legacy ACH. For some, these are unwelcome limits and fees, and time will tell the extent to which they stifle (or not) the service's growth. As the Federal Reserve's Financial Services website notes, a further limitation is that the federal government will neither originate nor accept same-day payments at this time, although plans are under way for their eventual participation.

I and others in the forum have commented on various aspects of this long-awaited enhancement here, here, and here. Now is probably a good time to proffer some questions for future consideration in helping to measure the success of this new venture.

  • Will projections in the first 12 months of service match NACHA's expectations of same-day garnering one percent of total ACH payment volume? Furthermore, will volume trending point to NACHA achieving its projection of 1.4 billion same-day payments by 2027? Early numbers may be somewhat misleading if payment originators inadvertently send payments for same-day settlement that were intended to be settled the following business day.
  • Whatever volume is achieved, will the primary payment use cases identified by NACHA be the actual drivers of same-day volume?
    • Payroll for hourly workers, late and emergency payrolls
    • Business to-business invoice payments with remittance information between trading partners that are under the $25,000 cap
    • Expedited consumer bill payments using both ACH credits and debits for just-in-time and late payments
    • Account-to-account transfers among accounts owned by the same consumer
  • Given the 18-month full implementation, how will same-day ACH hold up against existing faster payment schemes that leverage such things as debit card networks that offer much faster payments or even new faster payment schemes that are not reliant on existing payment rails?
  • How much, if any, will payment fraud increase with the availability of faster ACH?
  • How will service usage be impeded, if at all, by originating banks passing along the cost of the interbank fee to their payment originators?
  • Will the somewhat complicated eligibility requirements of no support for federal government payments, deferred debit, service and delayed funds availability slow adoption?

Despite these questions, there is reason to be optimistic. This is a major step forward for same-day ACH. What are your views on how these questions will eventually resolve themselves?

Photo of Steven Cordray  By Steven Cordray, payments risk expert in the Retail Payments Risk  Forum at the Atlanta Fed