Today begins the first phase of the same day ACH rollout. As of today, all receiving depository financial institutions need to be prepared to accept transactions through two new time frames or windows, and they need to post those transactions with today’s date, today. This is one of several steps the U.S. payment industry is taking to speed up the delivery of financial payments. Other countries have faster payments capabilities in place and the US does not want to be left behind.
Still to be proven is the true value to consumers, businesses and banks and where the most viable business cases exist. Credit.com cites one use case that the writer believes will be a boon for consumers, namely the ability to transaction same-day with a biller. Here’s their explanation to consumers:
Banks tend to batch process such transactions once per day, which is one reason bill payments can be frustratingly slow. That’s also one reason some bill collectors charge a $10 to $20 fee to take an immediate bill payment over the phone when a consumer is about to pay late.
NACHA, the nonprofit which oversees the ACH Network, and the Federal Reserve are out to eliminate these consumer-unfriendly pay-to-pay arrangements. Same Day ACH — and the same-day bill pay it promises — should help a lot.
There is a possibility, but not a guarantee that late payers will have a cheaper alternative to make last minute payments. Large billers, particularly utilities, have systems and partners in place to manage immediate payments for their late payers. These capabilities are integrated within their billing systems as is the fee to the customer. Will they go to the expense of incorporating same day ACH into their processes? This is yet to be seen. The larger impact of same day ACH is the option that it offers to smaller billers who don’t have a last minute bill payment process today.
Overview by Sarah Grotta, Director, Debit Advisory Service at Mercator Advisory Group
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