Same-day ACH: The Basics, Timeline, and What Employers Need to Consider

After much research and consideration the National Automated Clearing House Association (NACHA), which manages the development and administration of the ACH network, has decided to move forward with ACH same day processing for funds. By including a small fee with each processing, the receiving financial institutions (RDFI) will compensate for facilitating the service.

One of the top cases where it would prove useful was in the area of payroll. Same day processing would allow businesses to handle their payment processing needs with flexibility and speed. NACHA projects that about 1.4 billion same payments will be generated annually ten years post initial roll out. So, businesses can quickly pay workers of different payment structures (such as hourly) or cases in emergencies with little delay.

What do Businesses need to consider?

  • Do you want to offer the option as it is not required? Eligibility will need to be clearly determined.
  • Processing the fees will need to be incorporated to the payment structure and clearly communicated with the ACH providers.
  • Entry dates will need to be integrated to the system and precautions for incorrect entry dates put into place.

How does it work?

Typically the fastest payment processing available is the next business day - however a new rule has been adopted that will allow same day processing via two windows within a day for all! All ACH facilitators will now process any requests received by 10:30 am ET at 1:00 pm ET and any request received by 2:45 pm ET by 5:00 pm ET.

When does it go into effect?

The roll out of the new option will go into effect in phases to allow for adjustment. As of September 15, 2017 ACH processing will be available everywhere.

By March 16, 2018 all RDFI’s are required to provide ACH same day requested funds to its depositors by 5:00 pm their time.

Existing ACH schedules and functionality will not be affected.

Are there any exceptions?

The only exceptions will be for large amounts exceeding $25,000 and international transactions.