preparing for same day ach debits
TRANSCRIPT
THE PAYMENTS INSTITUTE — July 16-19, 2017
Emory Conference Center Hotel, Emory University, Atlanta, Georgia
Preparing for
Same Day ACH Debits
Jen Wasmund, AAP, CTP, NCP
Vice President of
Education and Compliance
UMACHA
Sandy Ortins, AAP, NCP
Vice President
NEACH
Overview
• Same Day ACH basics
• Same Day ACH Phase 1 lookback
• Same Day ACH use cases
• Preparing for Same Day ACH
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THE PAYMENTS INSTITUTE — July 16-19, 2017
Emory Conference Center Hotel, Emory University, Atlanta, Georgia
Same Day ACH basics
Preparing for
Same Day ACH Debits
@NACHAOnline |
#TPISchool 3
• Faster and more frequent settlement
options
• Credits live as of September 23, 2016
• Debits live on September 15, 2017
• Faster funds availability mandated by
March 16, 2018
What does Same Day ACH mean to participants
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What does Same Day ACH mean to participants
@NACHAOnline | #TPISchool
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Functionality Phase 1
Sept. 23, 2016
Phase 2
Sept. 15, 2017
Phase 3
March 16, 2018
Transaction Eligibility ($25,000 limit; IAT not eligible)
Credits only Credits and debits Credits and debits
New Same Day ACH
Processing Deadlines
10:30 AM ET and
2:45 PM ET
10:30 AM ET and
2:45 PM ET
10:30 AM ET and
2:45 PM ET
New Settlement Time(s) 1:00 PM ET and
5:00 PM ET
1:00 PM ET and
5:00 PM ET
1:00 PM ET and
5:00 PM ET
ACH Credit Funds
Availability
End of RDFI’s
processing day
End of RDFI’s
processing day
5:00 PM RDFI local
time
ACH Operator processing windows
@NACHAOnline | #TPISchool 6
Transmission window Target distribution Settlement schedule
ACH Operators Forward-Future Dated Items
10:30 a.m. ET (1030 ET)
2:45 p.m. ET (1445 ET)
8:00 p.m. ET (2000 ET)
2:15 a.m. ET (0215 ET)
12 noon ET (1200 ET)
4:00 p.m. ET (1600 ET)
10:00 p.m. ET (2200 ET)
6:00 a.m. ET (0600 ET)
8:30 a.m. ET (0830 ET) – Next Business Day
ACH Operators Forward – Same Day Items
10:30 a.m. ET (1030 ET)
2:45 p.m. ET (1445 ET)
12 noon ET (1200 ET)
4:00 p.m. ET (1600 ET)
1:00 p.m. ET (1300 ET) – Current business day
5:00 p.m. ET (1700 ET) – Current business day
ACH Operator Returns
10:30 a.m. ET (1030 ET)
2:45 p.m. ET (1445 ET)
4:00 p.m. ET (1600 ET)
8:00 p.m. ET (2000 ET)
2:15 a.m. ET (0215 ET)
12 noon ET (1200 ET)
4:00 p.m. ET (1600 ET)
5:00 p.m. ET (1700 ET)
10:00 p.m. ET (2200 ET)
6:00 a.m. ET (0600 ET)
1:00 p.m. ET (1300 ET) – Current business day
5:00 p.m. ET (1700 ET) – Current business day
5:30 p.m. ET (1730 ET) – Current business day
8:30 a.m. ET (0830 ET) – Next business day
8:30 a.m. ET (0830 ET) – Next business day
• Eligible
– Entries of $25,000 and under
– Return Entries
– Most Standard Entry Class (SEC) Codes
– Non-Monetary Entries
• Not eligible
– Entries over $25,000
– International ACH Transactions (IATs)
– Automated Enrollment Entries (ENRs)
Same Day ACH eligibility
@NACHAOnline | #TPISchool 7
• Timing
– Entries must be received by an ACH Operator prior to the “Transmission Window” deadlines
– Applies for both forward and Return Entries
• Formatting
– Must be $25,000 or less
– Effective Entry Date field values that are the current business day, stale dated or invalid will be processed as Same Day Entries
Same Day ACH Mechanics
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• Subject to the anticipated publication of a final 31 CFR Part 210 rule, the Treasury is committed to participating in Same Day ACH as of Sept. 15, 2017
– Beginning with the capability to receive tax and non-tax Same Day ACH credits
– Origination of EFTPS debits will be ready no later than October 2017
– Other Treasury programs will be adopting the capability later in the year and into 2018
Federal Government participation in Same Day
@NACHAOnline | #TPISchool 9
• Each forward Same Day ACH Entry (not
Return) is assessed a fee of $0.052
• Paid directly from ODFI to RDFI via
monthly ACH Operator statements
• Fee is scheduled to be reviewed per
Appendix Eleven five years after Phase 3
Implementation on March 16, 2018
The economics of Same Day ACH
@NACHAOnline | #TPISchool
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• If volume exceeds expectations by greater
than 25% of projections, the Same Day
fee may be reduced
The economics of Same Day ACH
@NACHAOnline | #TPISchool
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THE PAYMENTS INSTITUTE — July 16-19, 2017
Emory Conference Center Hotel, Emory University, Atlanta, Georgia
Same Day ACH Phase 1 lookback
Preparing for
Same Day ACH Debits
• Live on September 23, 2016
• Results published for October 2016 and
for all of 2016
• Feedback from industry has been
generally positive
• What did we learn?
Phase 1…what did we see?
@NACHAOnline | #TPISchool
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• From the first full month of adoption
throughout the remainder of 2016,
average daily transactions increased
• Direct Deposit via ACH while representing
the highest percentage of transactions, did
not represent the highest volume of dollars
transferred in either period
Phase 1…what did we see?
@NACHAOnline | #TPISchool
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• Of 23 institutions surveyed, who represent
nearly 66% of Same Day ACH volume
originated
– 100% reported no increase in fraud
– 35% saw higher origination volume than
anticipated
– 80% expect Same Day ACH volume to grow
at a steady rate over the next six to nine
months
Phase 1 and the truth from the market
@NACHAOnline | #TPISchool
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THE PAYMENTS INSTITUTE — July 16-19, 2017
Emory Conference Center Hotel, Emory University, Atlanta, Georgia
Same Day ACH use cases
Preparing for
Same Day ACH Debits
Where will Same Day ACH volume come from?
@NACHAOnline | #TPISchool
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62%15%
10%
7%
4%
1%
1%
More than 60% of Same Day ACH volume is estimated to come from existing ACH by 2027
Next Day ACH
Cash
Card
Check
Other
Online Banking & Bill Pay
Wire
Projected breakdown by Same Day ACH type
@NACHAOnline | #TPISchool
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39%
26%22%
13%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
C2B C2C B2B B2C
C2B uses cases expected to drive around
39% of Same Day ACH volume by 2027
Business and consumer uses
@NACHAOnline | #TPISchool
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Emergency payrolls
Hourly workers
Insurance claims
Refunds
B2C
Vendor payments
Tax payments
Payments to
release goods or
provide services
B2B
Consumers can
make bill payments
on their due dates
Faster credit for late
payments
C2B
Consumers can
move money
between accounts
Person-to-Person
payments
C2C
• Debit use cases– Bill payments
– Check conversion
– Collections
– Vendor payments
• Benefits – Faster settlement
– Reduces credit risk
– Increases collection rate
– Speeds up returns
– Reduces NSF returns
Same Day ACH debits use cases
@NACHAOnline | #TPISchool
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• Error corrections
– Faster reversals of erroneous debits and
credits
– Re-initiate correct payments faster
• Contingency
– Meet payroll cycles during an emergency
– Off-cycle payments
Same Day ACH for contingency purposes
@NACHAOnline | #TPISchool
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THE PAYMENTS INSTITUTE — July 16-19, 2017
Emory Conference Center Hotel, Emory University, Atlanta, Georgia
Preparing for Same Day ACH
Preparing for
Same Day ACH Debits
• It’s optional
• Find out your ODFI’s enrollment requirements
• Learn your bank’s origination deadlines
• Ensure proper use of effective entry date field
• Identify which payments will be sent Same Day
• Identify ineligible payments
• Consider sending a wire if funds are needed in real time
Same Day ACH debits checklist
@NACHAOnline | #TPISchool
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Originators
• It’s optional
• Consider enrollment requirements
• Consider Company Descriptive
Date as a required field
• Determine how you will identify
Same Day ACH transactions
• Communicate to your customers
• Know the ACH Operator
deadlines
Same Day ACH debits checklist
@NACHAOnline | #TPISchool
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ODFIs
• It’s not optional
• Will start receiving debit entries
• Recognize Same Day ACH
payments by the Settlement Date
field
• Need to provide end-of-day funds
availability to account holders who
receive Same Day ACH credits
• Can choose to send Same Day
returns
Same Day ACH debits checklist
@NACHAOnline | #TPISchool
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RDFIs
• It’s not optional
• Know funds availability
• Need to update your records to
indicate customer’s payment date
• Cash forecasting for controlled
disbursement accounts
• Consider updating online and
telephone systems to allow
customers to make Same Day
ACH payments
Same Day ACH debits checklist
@NACHAOnline | #TPISchool
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Receivers