CFO Daily News trumpeted the benefits of the new, enhanced same-day ACH may have for those in Accounts Payable, Accounts Receivable and Payroll operations. These changes are still in proposal stage, which is important to note, but if they are approved, and I believe that is likely, here is an overview of some of the changes proposed and benefits as highlighted in the article:
- Payment processing later in the day. A new processing window would let finance staffers send same-day payments later and those payments would clear in the evening hours. This would come in handy on occasions when you need to get a last-minute payment out to meet a payroll deadline or capture a key discount in A/P.
- Quicker access to funds.Within the existing processing windows, NACHA plans to make funds available to recipients earlier in the day for both same-day and regular ACH transactions. That’s good news for your own A/R department and could boost your vendor relationships, too.
- The ability to send and receive higher-dollar payments. NACHA wants to increase the dollar limit per ACH transaction to $100,000 (currently, it’s $25,000). That would allow your company to expand its ACH scope to include more customers and vendors with higher invoice amounts.
- The chance to pay or get paid days that were previously unavailable. Lastly, NACHA’s looking into weekend and holiday payment processing. In a pinch, your company would be able to send and receive funds on these days, helping you stay timely and compliant.
For financial institutions, the expansion of SDA may result in more fee income generated from this premium priced version of ACH. This may also, however, take away from the growth of some (but certainly not all) real time payment options beginning to emerge.
Update/Correction: NACHA’s proposed changes have been approved by their voting membership. A link to their announcement be found here.
Overview by Sarah Grotta, Director, Debit and Alternative Products at Mercator Advisory Group