The Electronic Payments Association, previously the National Clearinghouse Association, introduced a rule that will reduce the amount of time it takes to process an automatic clearing house payment, allowing them to be processed in the same day that they are made in the U.S. Previously, the association had stipulated all ACH payments had to go through in under 48 hours. In general, payments happen faster than 48 hours and most ACH payments go through in approximately 24 hours. The association listed new network functionality as the main reason for the change in the amount of time.
If the rule is put into affect, virtually all forms of ACH payments will be eligible for same-day processing as long as they do not exceed $25,000. The rule would require all 12,000 financial institutions in the U.S. to participate.
When will the rule take effect?
According to CPA Practice Advisor, the new rule will be implemented in three phases. The first phase won't come into effect until September 23, 2016. Through the Federal Reserve, ACH credit transactions can be processed in the same day and can include same-day bill pay, hourly payroll and person-to-person payments.
The second phase would become effective September 15, 2017. During this time, same day ACH debit payments become available. This makes it possible to to pay for things like utilities, mortgages, loans and other bills online via ACH debit.
The third phase, which would take effect in March 2018, would make same-day ACH credit transactions possible to customers.
These dates are not yet set in stone. Before they can be solidified, it's necessary for the Federal Reserve to provide written confirmation that it supports the rule. Modifications to the rule are possible and quite probable. The Electronic Payments Association has already issued revisions for the times of day the payments can be processed.
Same-day ACH payments will happen
Even if the rule proposed by the association doesn't get the confirmation it needs from the Federal Reserve, ACH payments will likely happen soon. The latest rule is a push in that direction.
"Same Day ACH provides an option for the consumers, businesses and governments that want to move their money faster," said Janet Estep, president and CEO of NACHA, in a PYMNTS.com report. "It provides an immediate solution for moving payments faster and creates a building block for tomorrow's products and services."
According to The Greensheet, it is likely the Federal Reserve will give the necessary written support for the new rule because it has been pushing for faster payments recently.