Offering the opportunity to settle an ACH transactions within hours has been undeniably successful. Last year, the first full years when both same-day ACH (SDA) credits and debits were available, 178 million SDA transactions were processed moving 160 billion dollars.
Based on that success, NACHA’s membership decided to double-down on SDA and add another processing window which would provide more flexibility to process more SDA transactions more quickly. In September, 2018 the decision was made to:
“…allow Same Day ACH files to be submitted until 4:45 p.m. ET, providing greater access for all ODFIs and their customers.”
In order to allow ACH processors and financial institutions to prepare for the additional window, NACHA allowed 2 years to get ready, establishing September 18, 2020 as the implementation date.
Last evening, NACHA issued a statement (Operations Bulletin #2-2019) confirming that the date for the additional window would be delayed for 6 months as the Fed would not be ready. And why not? Because the Federal Reserve will not be able to provide timely notification required to enable the new window. The Fed needs to issue a request for public comment and that comment notice has not been issued.
As posted in Digital Transactions:
It’s unclear how much of a setback the window delay represents for same-day ACH, but it comes at a time when payments providers of all varieties are trying to speed up their services. In the latest example, PayPal Holdings Inc. on Tuesday added a new service called Instant Transfer to bank, with JPMorgan Chase & Co. and The Clearing House as partners. t’s unclear how much of a setback the window delay represents for same-day ACH, but it comes at a time when payments providers of all varieties are trying to speed up their services. In the latest example, PayPal Holdings Inc. on Tuesday added a new service called Instant Transfer to bank, with JPMorgan Chase & Co. and The Clearing House as partners.
I do not know what it takes for the Fed to open a new window, but since they accomplished this same task recently, having two years to complete the task again sounds like more than enough prep time. And why didn’t the Fed issue a request for public comment? The conspiracy theorist in me wonders if this is somehow tied up in the Fed’s contemplation of whether or not to become a real time payments operator. Although SDA is not real time, it is a part of the faster payments spectrum and influences, (dare I say competes with), the adoption of real time transaction options.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group