July 05, 2019

Extended Hours for Same Day ACH: The Time Has Come


Jane Larimer

Jane Larimer

President and CEO


Triple digit growth in a single year shows you’re on to something. Such is the case with Same Day ACH.

Since its 2016 debut, businesses small and large, financial institutions from Main Street to Wall Street, and consumers have embraced the benefits of Same Day ACH. Volume jumped 137% from 2017 to 2018, with nearly 178 million transactions last year. 

But it’s still a work in progress. In fact, we have an enhancement coming in September, making funds available sooner in the day for many ACH credits. And next March, the dollar limit for Same Day ACH transactions jumps fourfold, to $100,000.

Then there’s another enhancement that Nacha and its members have approved: adding a third Same Day ACH processing window every business day. 

When Nacha issued a request for comment on the idea, the industry welcomed it. They plan to use it to support all sorts of Same Day ACH transactions, not just one specific use case. 

The third window would come at 4:45 p.m. ET—1:45 p.m. PT—two hours beyond the current deadline for submitting same-day transactions. That would be of particular benefit to folks in the West—many of whom would effectively have their first opportunity to actually use Same Day ACH and experience the benefits for their customers and clients with its myriad use cases. 

Sounds good, right? But in order for it to happen, the Federal Reserve needs to keep the National Settlement Service (NSS) open one hour later until 6:30 p.m. ET. That, in turn, means Fedwire will need to keep running another 30 minutes until 7 p.m. ET.

It wouldn’t be the first change in hours. The Fed extended the NSS closing time by 30 minutes to support Same Day ACH back in 2016. And even then it wasn’t a new idea. Three years earlier, when the Fed released its “Payment System Improvement – Public Consultation Paper,” Nacha and several other industry stakeholders noted that longer NSS hours were an important component of improving the payment system.

The payments industry didn’t rush into the idea of a third window. We gave it very careful, deliberate consideration. Nacha and its members realize the complexities involved in shifting NSS and Fedwire hours. There are other processes and systems involved, and the Fed has responsibilities to all payment system stakeholders. We don’t take those lightly. But we believe in the necessity of improving the payment system for all U.S. financial institutions. 

The world is moving toward a faster payments environment. With 10,000 financial institutions, and corporates with their established processes, it’s going to take us a while to get there. But we need to support our customers and clients longer into the day, and it’s imperative to be taking the steps that we can.

Opening a third window for Same Day ACH is an important move in that direction. With the Fed’s help it will be a reality come March 19, 2021.