Same Day ACH today: UMB Shares Its Experience to Date

The following article has been reposted with permission from the Federal Reserve Banks’ December 2016 issue of FedFocus.

UMB Bank NA of Kansas City, Missouri (UMB) was ready for Same Day ACH Phase 1 on day one. UMB Financial Corporation (Off-site Link), a diversified financial holding company, originated more than 69 million Automated Clearing House (ACH) transactions in 2015, making it the 25th largest ACH originator that year.1

We spoke with UMB Vice President and Payments Group Manager Tristan Thompson about UMB’s experience with Same Day ACH, past and present. He brings an informed perspective from his position at UMB, which he describes as “group manager of payments product suites.” His strong team consists of payment product managers who have responsibilities for wire, ACH, check, lockbox, cash vault, Account Reconciliation Plan (ARP), online payments, merchant services and remote deposit capture.

Day one

Reflecting on UMB’s successful Same Day ACH Phase 1 implementation efforts, Thompson credits the success to the fact that the bank started its planning as soon as the NACHA Same Day ACH rule was approved. He also praised the way NACHA prepared the industry. “The collaborative approach and discussions that NACHA hosted with banks and regional payments associations helped banks like us to take a proactive approach with the launch of Same Day ACH,” he explained.

For Thompson and UMB, the biggest challenge involved was not internal system readiness but rather the communication needed to both customers and internal associates to ensure they understood this new payment option and the associated use cases and benefits. To this end, continued customer education around Same Day ACH remains an ongoing focus for UMB.

Every day

The focus on customer benefits and training is just part of the everyday mission for UMB, where every associate puts customers first and strives to deliver TUCE (The Unparalleled Customer Experience). UMB offers complete banking services, payment solutions, asset servicing and institutional investment management to its customers. Headquartered in Kansas City, Missouri, UMB also operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas.

Paula Edwards, UMB’s Federal Reserve Financial Services account executive, credits UMB’s Same Day ACH success with how it embraces and approaches opportunities. “UMB stays involved in the industry, giving freely of its resources and expertise,” Edwards said. “It responds to the Federal Reserve Payments Study, participates in focus groups and serves as a member of the Federal Reserve System’s Faster Payments Task Force.”

Thompson sees a tie between his bank’s customer focus and Same Day ACH.


Just over two months into implementation, Thompson said that UMB found some of the biggest challenges presented by Same Day ACH were, and continue to be, customer education and adoption. “As with any new product, adoption takes time,” he said. “You need to be able to overcome customer hesitation by clearly outlining the value Same Day ACH brings to them.”

Hesitation is understandable, especially if the benefits aren’t obvious. “Same Day ACH represents a monumental shift in the payments space,” Thompson said. “ACH has not changed this significantly in its 40-year history, and when something changes this dramatically, a lot of considerations have to be made, including needed changes from our customers’ posting and reconciliation functions.”

Customers have had to review their internal accounting systems and processes to ensure they are prepared to send and receive Same Day ACH transactions. Thompson explained that some customers have had to revamp long-standing processes. “A customer may have existing processes in place to send their files days in advance and approve them at a specific time each day. Now, with Same Day ACH, they have the option to increase the speed of payment by leveraging the two new ACH windows. This change could result in their employees needing to be available more frequently and at additional times during the day,” he added.

UMB has promoted Same Day ACH through direct and indirect communications and has a dedicated Same Day ACH (Off-site Link)webpage. “We encourage our customers to engage in conversations with their relationship teams to discuss how this service can help solve their evolving business payment needs,” Thompson said.


During the first months of Same Day ACH, UMB has processed same-day transactions daily. “The ramp up in origination volume has been steadily increasing,” Thompson said. “NACHA estimated a conservative ramp-up, which was purposely designed by only allowing credits in Phase I. Our experience with adoption is in line with that expectation, but we’re seeing volumes increase as customers become more familiar. What we have found is that once a customer leverages this offering, they quickly realize the benefit and continue to regularly use it or, at a minimum, keep it in their tool belt as another payment option.”

Thompson recalled that with Same Day ACH implementation, there were two trains of thought in the industry for those planning to offer same-day origination solutions to customers:

  • Offer it as an opt-in service
  • Simply open the gates for everyone to participate

“Opt-in is the choice we’ve made at UMB for this enhanced offering, as we want to make sure it fits customers’ specific needs and they correctly understand how to use it,” Thompson said. “In addition, throughout the industry, there are still customers who send stale-dated entries, which could have been an issue for them on day one of implementation if they were not ready to send the transaction same day.”  If customers send stale-dated entries, meet the Same Day ACH cutoff windows and are signed up for Same Day ACH, then those transactions would transmit same day.”

While emergency payroll is one of the most anticipated and realized use cases for Same Day ACH, by overall volume, business-to-business use for making vendor payments is actually UMB’s number one use case.

Thompson credits the UMB relationship teams with doing a great job informing and encouraging customers to explore Same Day ACH. “However, there were still customers who opted to wait and didn’t realize that they needed this service until they were in a pinch,” Thompson said.

Payday mayday

Emergency payroll and contingency situations are one of the biggest use cases for Same Day ACH. Thompson said that UMB has already used Same Day ACH to respond to such use cases multiple times, for example:

  • Emergency pension payments — UMB facilitated over 2,300 pension payments with Same Day ACH on October 3
  • Emergency payroll — UMB has helped multiple customers with emergency payroll needs
  • Disaster contingency — UMB leveraged Same Day ACH during Hurricane Matthew when businesses could not send their payroll files

Under normal operating circumstances, customers send their payroll files one or two days in advance. If for some reason they miss that time frame, the only option used to be sending wire transfers. “Now if a customer notifies us early enough in the day before the Same Day cutoff windows, we can usually accommodate their emergency need with Same Day ACH,” Thompson said.

As would be expected, the rush created by an emergency necessitates a special set of procedures. “Because we offer the service on a sign-up, opt-in basis, we knew it was important to have expedited procedures in place to accommodate emergency needs for those customers who had not already requested to participate,” Thompson said. “In these situations, UMB’s relationship management, operations and product teams follow a predetermined process to expedite obtaining required documentation, initiate necessary system changes and ultimately process the Same Day ACH files. All this is manageable, but our biggest duty is to customer service, to do whatever we can to help.” After the emergency is over, UMB encourages customers to continue to keep the service active and provides additional guidance on how to use it going forward.

“It really all comes down to this: because customers come first at UMB, we treat every request with priority, emergency situation or not,” Thompson concluded.

Another day

Effective September 15, 2017, Phase 2 of the NACHA Same Day ACH rule will allow debits as well as Phase 1’s credits. Thompson discussed UMB’s approach. “As with Phase 1 and same day credit transactions, we’re already actively planning for Phase 2 and will begin speaking with customers soon about how they should prepare,” he said.

Thompson is already anticipating the changes he might see as a result of Phase 2 implementation of debit transactions. “We can expect higher volumes as use cases for same-day debits grow. Billers that use lockbox services and have their checks converted via accounts receivable conversion (ARC) are a prime example. I believe we will see many ARC transactions processed same day, specifically coming in the first presentment window, meaning customers can have their receivables ready earlier in the day. There will also be use cases from clients from other vertical segments wanting to take advantage of Phase 2. Lastly, customer education is needed for those that use ACH positive pay or debit block services. These customers will now have to accommodate debit pay or return decisions multiple times per day,” he explained. “Also, in Phase 2, we’ll no longer have the issue with balanced files since the Phase 1 credits can now be offset by the Phase 2 debits.”

UMB anticipates that the biggest piece of implementation will again be educating customers so that they fully understand Same Day ACH debits and the potential impacts because so many are used to the check clearing process and its timing.

Offering Same Day ACH origination fits well with UMB’s philosophy. In short, “UMB is constantly looking for ways to provide the best products and services to its customers, which is why it’s so important to offer Same Day ACH solutions,” Thompson concluded.

Past and present day

The Federal Reserve Banks have long supported the faster payment opportunities facilitated by Same Day ACH. For many years, we offered a proprietary, opt-in service in advance of the NACHA ACH Rules change, and we are pleased to watch the growth of this new payment option. To learn more, visit the FedACH® SameDay ACH Service page, the FedACH Services Fee Schedule and the Same Day ACH Resource Center. You may also contact your account executive or request that we contact you (Off-site Link) regarding your interest in the FedACH SameDay ACH Service.