Same Day ACH: Moving Payments Faster (Phase 3 of 3)
New capabilities of Same Day ACH became effective in three phases to allow financial institutions and businesses to acclimate to a faster processing environment and to ease the implementation effort. Almost all types of ACH payments, both credits and debits, are eligible for same-day processing. Only international transactions (IATs) and high-value transactions above $25,000 are not eligible. Eligible transactions account for approximately 99 percent of current ACH Network volume.
What is ACH? Automated Clearing House is an electronic network for financial transactions in the United States. (US payment systems include ACH, Wires, Checks, Card Payment Networks and RTP).
All Receiving Depository Financial Institutions (RDFIs) are required to receive same-day ACH payments, thereby giving ODFIs and Originators the certainty of being able to send same-day ACH payments to accounts at all RDFIs. As an RDFI CPFCU is receiving and posting Same Day ACH transactions to member accounts.
Originating Depository Financial Institutions (ODFIs) are able to submit files of Same Day ACH payments through two additional clearing windows provided by the ACH Operators. Offering Same Day ACH products and services is optional for ODFIs. As an ODFI CPFCU is not offering Same Day ACH Services at this time, however we could add Same Day ACH services to our members in the future for fee income.
General Rule for Availability of Credits – In the third of three phases, beginning March 16, 2018, RDFIs were mandated to make funds available from Same Day ACH credits (such as payroll Direct Deposits) to their depositors by 5:00 p.m. in the RDFI’s local time on the Settlement Date of the Entry, subject to its right to return the Entry under NACHA Operating Rules. This functionality is important in supporting use cases such as payroll, because it is critical that an employee be able to withdraw cash on payday. Just as a side note, CPFCU has been meeting this requirement since the very beginning of Same Day ACH on 9/23/2016.
For a credit Entry that is not a Same Day Entry, an RDFI must make the amount of the credit Entry received from its ACH Operator available to the Receiver for withdrawal no later than the end of the Settlement Date of the Entry, subject to its right to return the Entry under NACHA Operating Rules. These are ACH transactions that will be available to view in the ACH Warehouse in Episys until they post on the Settlement Date of the transaction.
A Same Day Entry Fees are paid from the ODFI to the RDFI for each Same Day ACH transaction. Collection and disbursement of Same Day Entry Fees for ODFIs and RDFIs is handled by the ACH Operators through monthly billing.
The National Automated Clearing House Association (NACHA)’s ACH Rules govern the ACH system, participating financial institutions use the rules to transfer funds electronically. The regulations for ACH are in 31 CFR Part 210 and other federal regulations apply including Regulation E: The Electronic Funds Transfer Act, UCC 3 & 4, Regulation CC, UCC4A, Federal Reserve ACH Operating Circular, E-Sign Act, etc.
Helpful Resource: https://www.nacha.org/rules/same-day-ach-moving-payments-faster-phase-3