Same Day ACH and PEP+ Opportunities - The Clearing House

22 Pages·2015·0.99 MB·English

by  Bonney Antony

Same Day ACH and PEP+ Opportunities

August 21, 2015
Agenda
• Review of the NACHA Rule
• Discussion of considerations and impacts
• What we are looking at for PEP+
• Q&A

Hali Jewell
Product Manager, Payments
Management Solutions
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Same Day ACH
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Same Day ACH – Overview
•All RDFI’s will be required to receive Same Day Transactions
o Same Day Credits must be made available to ACH Credit
Receivers by close of business, and ultimately by 5:00 PM in the
RDFI’s local time. (Phase 3)

• Interbank Fees – ODFI’s must pay RDFI’s 5.2 cents per same day
transaction, assessed by the ACH Operators

• Ineligible for Same Day (Eligible transactions account for 99% of
ACH Network Volume)
o International Transactions (IAT)
o Automated Enrollment Entries (ENR)
o High-Value (>25,000)
o Phase 1 – DR Items are ineligible until Phase 2
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Same Day ACH – Overview
•Settlement Deadlines

Deadline ACH Submission Deadline ACH Settlement

a. Morning 10:30 AM ET 1:00 PM ET
a. Afternoon 3:00 PM ET 5:00 PM ET

•Company Descriptive Date – Optional Use of field for customer
specified “Same Day” indicator
•6 Positions – Company/Batch Header Record – Optional
“SDHHMM”
a.SD = Same Day Settlement Requested
b.HHMM = 1300 or 1700
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Same Day ACH – Returns and Settlement
• Returns would not be required to be sent on the same day, but
would be permitted to be processed through the two new same-day
windows, extending the existing time frame for same day
settlement

• Returns would be settled at the next available settlement
opportunity, which could be the same day

• Same-day returns would not be subject to the eligibility limits of
forward transactions (i.e., the per-entry dollar limit, and IATs); these
returns can already be sent through the ACH Operators existing
same-day return services

• Same-day returns would not be subject to the interbank fee (nor
would Notifications of Change (NOCs), which are also sent from
RDFIs to ODFIs)

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Same Day ACH – Effective Dates
• The effective dates of the three phases are:
• Phase 1 – September 23, 2016 (16 months from ballot)
• Introduces Same Day ACH; Credits only
• Phase 2 – September 15, 2017 (28 months from ballot)
• Expands to include Debits
• Phase 3 – March 16, 2018 (34 months from ballot)
• Requires ACH Credit Funds Availability to be 5pm local time

• The effective dates are contingent on FRB approval
• Previously, the Federal Reserve Board stated that it objected to the inclusion
of the category “opportunity costs” in the calculation of the amount of the
interbank fee.
• A revised methodology for the interbank fee excludes opportunity costs.
NACHA believes this revision addresses the concerns of the Federal
Reserve Board.
• Comment period ended July 2, 2015 - 39 comments received

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So, now what?
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What do we see?
• What it means to be an ACH entry is changing
• While still a batch and forward payment mechanism, settlement is part of
the foundation of everything we know today

• Systems need to expect and be able to predict both ‘types’ of ACH
transactions, Same Day ACH and Next Day ACH, and handle appropriately

• Changes to how we predict and calculate settlement are impactful - far
beyond systems alone

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What do we see?
• ACH Originator implications
• Funding and Account Balance management
• Complexity of reversals/corrections and differences in settlement for
Debit/Credit entries through initial phases of the Rule
• Changes to processing deadlines and cutoff times
• New money movement and recovery opportunities

• Financial Institution
• Timing of ACH processing activities and implications to other core processes
• “Intraday” posting
• Need for automation and streamlining of existing manual processes
• Potential lack of control over ACH Originator activity
• New business opportunities and potential for service offerings

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