Same-Day ACH Gets Third Settlement Window, Starting March 2021 – Digital Transactions


In a move that could have broad implications for a variety of payments, the Federal Reserve announced on Monday that it would support a third settlement window each day for same-day automated clearinghouse transactions. The later settlement period, which ACH regulator Nacha and a number of banks have long been calling for, will allow financial institutions in the western half of the country to submit more payments for processing every day. the same day.

Under the rule change, which is expected to go into effect on March 19, 2021, the Fed will keep its national settlement service open until 6:30 p.m. Eastern Time, one hour later than its current closing time. The Fedwire Funds service will remain open for an additional half hour until 7 p.m. As a result, the last daily deadline for same-day ACH will be at 4:45 p.m. EST, two hours later than the current cut-off time.

Calling the extended time each day “required for same-day ACH expansion,” Nacha said the move is one of the two most frequently requested changes by ACH network users. The other is a higher limit for same-day transactions. This change is expected to take effect in March and will increase the cap per transaction from $25,000 to $100,000.

Nacha, based in Herndon, Va., originally pushed for a September 2020 effective date for the third daily processing window, but Fed delays pushed the date to 2021.

The subsequent window for same-day settlement will affect a wide range of transactions. The ACH network, which reaches nearly every financial institution in the country, typically handles payroll and business payments as well as inter-company and peer-to-peer transfers. Additionally, so-called Instant Pay transfers for freelancers, ride-hailing drivers, and other participants in the so-called gig economy are often dependent on same-day ACH capacity.

The third settlement window “is definitely an improvement if you’re looking for the ability to make an instant payout, which is almost table stakes,” says Patricia Hewitt, director of PG Research & Advisory Services, a Savannah-based consulting firm. , Georgia. News on digital transactions. Later availability will also allow for more same-day settlement of last-minute bill payments, she adds.

Same-day ACH credits have been available since 2016, with same-day debits added a year later. Calling the adoption of the same-day option “strong”, nacha estimated on Monday that the ACH will process 250 million same-day payments this year, about half of all same-day traffic since the service’s launch dates.

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