NACHA is launching its Same-Day ACH Initiative – What Does This Mean to You?
Many Total e Integrated clients utilize ACH, or Automated Clearing House processing, to process large volumes of credit and debit transactions. For those who don’t already utilize it, ACH payments are electronic payments in which the customer gives an originating organization (i.e. you) authorization to debit directly from their checking or savings account for bill payments. ACH payments follow a set of rules and regulations to ensure free transfers and protection of financial data. ACH’s main benefit is the reduction in delay - traditionally payments required the mailing of a paper check, picking up the check and depositing the check in person.
NACHA, the trade association in charge of developing, administrating and governing the ACH network, is launching Phase Two of its Same Day ACH initiative later this month. Traditionally ACH payments are settled on the next business day. In September of last year, Phase One of the Same Day ACH initiative permitted customer’s to “push” ACH payment to organizations (i.e. you) on the same day. However, with Phase Two you will be permitted to “pull” payment from the customer, so that it occurs on the same day, on your terms.
Does Same Day ACH impact me?
Pulled same-day ACH transactions have two caveats – they are applicable to US Banks Only (sorry Canada), and must be under $25,000. However, any U.S. based organizations utilizing ACH for reoccurring billing could potentially see significant benefits. With Same-Day ACH, you may start entering and collecting payment on the very same day. For service appointments like a golf lesson, spa treatment or tournament booking, you can now settle payment on the very same day and pay your staff with said funds as well.
- Increased Pay Day accuracy ensuring workers are paid on-time and with the right amount.
- Quick reversal of payment errors.
- Avoidance of late fees.
- Increased cash-flow.
- Keep your money for even longer – meaning increased interest revenue.
There are a few key points to keep in mind before you get too excited! First of all, while funds will be withdrawn from the customer’s account on the same day, your bank may not fund your account on the same day – they have the choice to determine when these funds will be released to your bank account. That being said, if enough customers pressure banks to offer expedient service – that could be a catalyst to improve the efficiency of Same Day ACH across the board. Furthermore, Same Day ACH is unfortunately not a free service – NACHA has built in Same Day ACH surcharging rules which the originating bank pays to the bank receiving the deposit – fees that your bank are likely to pass along to you.
How to Take Advantage
On September 15th, 2017, Phase Two of the Same Day ACH initiative will be officially rolled out. If you want to take advantage right away, the best thing you could do is connect with your bank, payment solution, and payroll providers. Be sure to ask how much it will cost, and how fast the processor intends to make funds available. If you’re interested in utilizing Same Day ACH through TEI Payment Solutions (Powered by U.S. Bank – Elavon), be sure to get in touch with us at firstname.lastname@example.org.