Financial Institutions Ready Themselves for Same-day ACH

This is the second of a two-part series on Same-Day ACH. The first article looked at how the rules will change, and this article will look more specifically at how the new rules will impact banks.
Without question, the move from 1-3 day ACH to Same-day ACH will bring gain and some pains. Customers will love getting access to their money quickly, but banks will feel the effect of having to revamp systems. Financial institutions will have hoops to jump through to be compliant.
However, according to a recent survey by the NACHA, The Electronic Payments Association, 95% of financial institutions polled said they will offer their clients Same-day ACH origination services by year-end. Of those that will offer Same-day ACH services, 86% will offer it to all of their clients, while 14% will make it available to select clients, based on need. The survey identified the two strongest use cases among those offering Same-day services: payroll and business-to-business payments, with 100% planning to offer Same-day payroll payments and 95% planning to offer Same-day B2B payments, in addition to services for expedited bill pay and person-to-person (P2P).
There’s no quarrel about the benefits of faster payments. It’s just that change doesn’t come cheap. But even smaller institutions are getting on board. According to NACHA and the RPA (Regional Payments Association)’s recent survey of smaller institutions found that 64% of those surveyed plan to originate Same-day ACH payments.
“Deciding to originate Same-day ACH means smaller financial institutions can act now to support customer demand for faster payments,” Norman Robinson, president and CEO of EastPay, said in a prepared statement. “As smaller institutions prepare to receive Same-day payments, they spot business opportunities. Banks and credit unions recognize that Same-day ACH is not just an operational update, it is a new competitive solution.”
Alliant Credit Union is deep in the throes of prepping for Same-day ACH. It has a designated team working to enhance its systems and work processes before September 23, 2016, the governmentally designated launch date.
“We don’t see this as a challenge because our process is already super fast, faster than most financial institutions. Plus, all Alliant ACH transfers are free. We’re also anticipating that our members will want to initiate Same-day ACH from their Alliant accounts as well, so we’re working swiftly to provide that capability in 2017,” says Dana Vas Nunes, senior manager of Deposit Products. “We’ve always been known for super fast ACH transfers, but other banks’ processes can slow things down – regardless of how fast we can process them. We want to help our members have the fastest possible access to their funds as part of our ‘members first’ service philosophy.
TD Bank is hard at work installing new code to manage the requirements of Same-day ACH. “Significant planning and testing is required to ensure the change occurs as planned and that our customers have access to the benefits provided by Same-day ACH by the roll-out date,” says Rick Burke, head of corporate products and services at TD Bank. “In addition to these operational changes, TD is working with our front-line and customer service teams so they can support customers during ACH transactions, help them learn about the key elements of Same-day ACH, and assist customers in identifying the value the new capability may provide. We are training employees both in our store locations and in the back offices.”
All the effort is worth it. Says Burke, “The movement of ACH transactions on a Same-day basis is just the first step in a migration toward real-time payment capabilities, and we’re committed to providing the capabilities our customers need and desire.”
B of A has been charging for ACH out $3 long time ago, now they will jack it up to $5 or more,
And probably they will nickle and dime us for limits like up to $2000 level 1 payment, up to $5000 level 2 payment and so on. The fees are driver to this change not compassion for their customers.
There also certainly will be earlier deadlines to get things into the system. For instance, Alliant currently has a deadline for overnight ACH of noon central time, which is 10 a.m. on the West Coast. The deadline for same-day could be moved up to be nearly impossibly early for people on the West Coast.
However, it is a cash transfer, and same day means it is available at the other institution same day, not overnight availability.
One point I see is that you could be assured of same-day only when sending; when pulling, it would be dependent on the other financial institution, whether they respond immediately or overnight and whether they are set up to be able to respond same-day.
I do not want to pay for ACH service. Period.
This is an issue with Alliant, which is NOT part of the shared branch system. Alliant chose instead to go the ACH route, which is slower and needs to be set up first, which takes at least two days, and then takes overnight rather than same day. But, having set up a reliance on that, Alliant has now gone and drastically undermined it by seriously reducing how much to you can ACH to only relatively small amounts. If Alliant is going to so drastically limit its ACH transfers, then it now needs to join the shared branch system.
Any transfers pulled into the CU were free. For any transfers pushed out, there is a $5 fee.
Bigger is not always better. When our CU was small, it was very accommodating. As they grew through added memberships and mergers, the worse they got with added fees for almost everything and now act more like a big bank. We are just another number to them, no longer treated as members.
To clarify to those stating that this will mean next day availability, that is not the case. There will be 3 time frames to meet same day posting. The receiving bank is required to have funds posted by end of business that same day. Failure to do so can cost the Institutions ability to be part of the ACH network. Phase one will allow for ACH Credits only to be processed, after 1 year, ACH Debits will be included.
Coming from a smaller community bank, I am not schooled in how the Credit Unions process, as they are under a completely different guideline than us. But hopefully each will look to put the customer first and use the process in a manner that will be beneficial to all.