Same Day ACH: Moving Payments Faster (Phase 2)
New capabilities of Same Day ACH become effective over phases to allow financial institutions and businesses to acclimate to a faster processing environment, as well as to ease the implementation effort. Beginning September 15, 2017, Same Day ACH is available for debit entries, enabling the same-day processing of virtually any ACH payment.
The Rule enables the option for same-day ACH payments through additional ACH Network functionality, without affecting previously available ACH schedules and capabilities:
Originating financial institutions (ODFIs) are able to submit files of same-day ACH payments through two additional clearing windows provided by the ACH Operators (Note: The actual ACH Operator schedules are not determined by the Nacha Operating Rules.):
A morning submission deadline at 10:30 AM ET, with settlement occurring at 1:00 PM.
An afternoon submission deadline at 2:45 PM ET, with settlement occurring at 5:00 PM.
Virtually all types of ACH payments, including both credits and debits, are eligible for same-day processing. Only international transactions (IATs) and high-value transactions above $25,000 are not eligible. Eligible transactions account for approximately 99 percent of current ACH Network volume.
All RDFIs are required to receive same-day ACH payments, thereby giving ODFIs and Originators the certainty of being able to send same-day ACH payments to accounts at all RDFIs.
Learn more about Same Day ACH with our Resource Center.
The Rule is based on a solid foundation of economic research on the use cases for Same Day ACH.
All consumers, businesses, government entities and financial institutions that use the ACH Network to move money between bank accounts will benefit from the option to move ACH payments faster.
Nacha projects that ACH Originators would generate approximately 1.4 billion same-day ACH payments annually as of ten years after full implementation and rollout, primarily for transactions that can be initiated before 2:45 PM ET on business days (not on weekends or holidays), and that do not require real-time functionality.
Using an expert, third-party economist, Nacha assessed 10 primary use cases for Same Day ACH. Significant use cases for Same Day ACH include:
Same-day payrolls, supporting business’ needs to pay hourly workers, and providing flexibility for late and emergency payrolls and missed deadlines; and enabling employees to have faster access to their pay in these cases;
Business to-Business payments, enabling faster settlement of invoice payments between trading partners, and including remittance information with the payments;
Expedited bill payments using both ACH credits and debits, enabling consumers to make on-time bill payments on due dates, and providing faster crediting for late payments; and,
Account-to-account transfers, providing faster crediting for consumers who move money among various accounts they own.
The following changes to the Nacha Operating Rules will become effective on September 15, 2017.
SECTION 8.84 Same Day Entry
An Entry for which the Effective Entry Date is the same Banking Day as the date on which the Entry is Transmitted by the ODFI to its ACH Operator, and is Transmitted by the ACH Operator’s deadline for same-day processing and settlement. A Same Day Entry must be for an amount of $25,000 or less. An IAT or ENR Entry cannot be a Same Day Entry. For purposes of fulfilling its obligations under these Rules, an RDFI may rely on the Settlement Date of an Entry, regardless of the Effective Entry Date. An Entry with a stale or invalid Effective Entry Date will also be a Same Day Entry if it is Transmitted by the ODFI to its ACH Operator by the ACH Operator’s deadline for same-day processing and settlement, and is otherwise eligible for same-day processing and settlement.
SUBSECTION 188.8.131.52 Authorization of TEL Entries
For an authorization related to a Single Entry TEL Entry, the Originator must either make an audio recording of the oral authorization, or provide the Receiver with written notice confirming the oral authorization prior to the settlement of the Entry.
SUBSECTION 2.8.3 Time Limitations on Initiation of Reversing Files
An Originator or the ODFI must Transmit each Reversing File and, when appropriate, a corresponding Correcting File, to the ACH Operator within five Banking Days after the Settlement Date of the Erroneous File. The Originator or ODFI must Transmit the Reversing File and any corresponding Correcting File to the ACH Operator within twenty-four hours of the discovery of the Erroneous File. Any debit Entry within the Reversing File must not contain an Effective Entry Date that is earlier than the Effective Entry Date of the credit Entry to which it relates.
SUBSECTION 2.9.1 General Rule for Reversing Entries
An Originator may initiate a Reversing Entry to correct an Erroneous Entry previously initiated to a Receiver’s account. The Reversing Entry must be Transmitted to the ACH Operator in such time as to be Transmitted or made available to the RDFI within five Banking Days following the Settlement Date of the Erroneous Entry.
A debit Reversing Entry must not contain an Effective Entry Date that is earlier than the Effective Entry Date of the credit Entry to which it relates.
For this Section 2.9 and Subsection 2.12.2 (ODFI Request for Return) only, an Erroneous Entry is defined as an Entry that:
is a duplicate of an Entry previously initiated by the Originator or ODFI;
orders payment to or from a Receiver different than the Receiver intended to be credited or debited by the Originator;
orders payment in a dollar amount different than was intended by the Originator; or
is a credit PPD Entry satisfying each of the following criteria:
is a credit PPD Entry satisfying each of the following criteria:
the credit PPD Entry is for funds related to a Receiver’s employment;
the value of the credit PPD Entry is fully included in the amount of a Check delivered to the same Receiver at or prior to the Receiver’s separation from employment; and
the credit PPD Entry was Transmitted by the Originator prior to the delivery of the Check to the Receiver.
The Originator must make a reasonable attempt to notify the Receiver of the Reversing Entry and the reason for the Reversing Entry no later than the Settlement Date of the Reversing Entry. For a credit PPD Entry satisfying the criteria of Subsection 2.9.1(d) above, the Originator must notify the Receiver of the Reversing Entry at the time the Check is delivered to the Receiver.
SUBSECTION 2.10.4 Timing Requirements for Reclamation Entries and Written Demands for Payment
An Originator or ODFI must originate a Reclamation Entry or written demand for payment within five Banking Days after the Originator receives notice of the death of the Receiver. If a Reclamation Entry is returned by the RDFI, the Originator may make a written demand for payment within fifteen Banking Days after it receives the returned Reclamation Entry. For this subsection, notice received by the Originator is considered to be effective from the time specified in Section 1-201(27) of the Uniform Commercial Code (1978 Official Text).
A Reclamation Entry must not contain an Effective Entry Date that is earlier than the Effective Entry Date of the credit Entry to which it relates.
SUBPART 3.2.2 Glossary of Data Elements
Effective Entry Date: 6 Positions – Company/Batch Header Record – Required (all batches)
The Effective Entry Date is the Banking Day specified by the Originator on which it intends a batch of Entries to be settled.
For credit Entries, the Effective Entry Date must be either the same Banking Day as the Banking Day of processing by the Originating ACH Operator (the processing date) for Same Day Entries, or one or two Banking Days following the Originating ACH Operator’s processing date for other Entries.
For debit Entries, the Effective Entry Date must be either the same Banking Day as the processing date for Same Day Entries, or one Banking Day following the Originating ACH Operator’s processing date for other Entries.
A batch of Entries containing an Effective Entry Date beyond the designated number of days allowed is Rejected by the ACH Operator and returned to the ODFI.
A batch of Entries containing an Effective Entry Date that is stale (i.e., is a Banking Day that is in the past, or is the current Banking Day but is not submitted timely to an ACH Operator for same-day processing and settlement) is settled at the next available settlement opportunity.
A batch of Entries containing invalid Effective Entry Date information (for example, if the field is blank or zero, partially blank or partially non-numeric, contains an incomplete date, contains day numbers higher than 31, or contains month numbers higher than 12) is settled at the next available settlement opportunity. The Originating ACH Operator inserts the Banking Day of processing or the next Banking Day as the Effective Entry Date, whichever corresponds to the next available settlement opportunity.
ENR: For Automated Enrollment Entries, this field must be space filled. Automated Enrollment Entries cannot be Same Day Entries.
Return Entries and Notifications of Change: The ACH Operator does not edit this field.
The scheduled Settlement Date is inserted by the Receiving ACH Operator. See the definition of “Settlement Date” in this Appendix Three.
Settlement Date: 3 Positions – Company/Batch Header Record – Inserted by Receiving ACH Operator (all batches)
The Settlement Date (a 3-digit Julian date) for a batch of Entries is inserted by the Receiving ACH Operator. This is the date on which the Participating DFI or its correspondent is scheduled to be debited or credited by the Federal Reserve.
The Settlement Date inserted by the Receiving ACH Operator is the same as the Effective Entry Date, except as noted below.
In the following situations, the Receiving ACH Operator will insert the Banking Day following the Banking Day of processing as the Settlement Date (i.e., the next Banking Day):
The Effective Entry Date and the Originating ACH Operator’s processing date are the same, but the Entry is received by the Receiving ACH Operator after its deadline for same-day settlement.
The Effective Entry Date and the Originating ACH Operator’s processing date are the same, but the Entry is for an amount greater than $25,000.
The Effective Entry Date and the Originating ACH Operator’s processing date are the same, but the Entry bears the IAT Standard Entry Class Code.
The Entry bears the ENR Standard Entry Class Code.
Entries with invalid or stale Effective Entry Dates will be settled at the next available settlement opportunity.
Return Entries, dishonored Return Entries, and contested dishonored Return Entries are settled by the ACH Operator no earlier than the Effective Entry Date contained within the original Entry, as it appears in the Return Entry Company/Batch Header Record. The return of an Entry that contains an invalid or stale Effective Entry Date will be settled by the ACH Operator at the next available settlement opportunity (i.e., the Banking Day of processing or the next Banking Day).
Notifications of Change will be settled at the next available settlement opportunity, (i.e., the Banking Day of processing or the next Banking Day).
Same Day ACH Impacts by Party
Offering Same Day ACH products and services is optional for ODFIs. For those ODFIs that choose to offer Same Day products and services, the following impacts should be considered:
Discuss new file submission and delivery schedules with ACH Operator
Review and revise internal processing schedules and procedures to accommodate new windows for Same Day Entries.
Review downstream applications and systems that may be impacted by Same Day Entries.
- Communicate with Originators and Third-Parties on Same Day Entries
- Determine customers and business models to offer Same Day
- Discuss proper use of the Effective Entry Date and impacts of improper Effective Entry Dates. Discuss alternatives if an Originator is not able to properly use Effective Entry Dates. If desired, discuss use of an optional indicator for Same Day entries
- Discuss eligibility requirements for Same Day Entries
Develop procedures for holding entries that are received from an Originator in time for a same day window but that is not the Originator’s desire
ODFIs will receive information from their ACH Operator regarding collection of the Same Day Entry fees.
Receipt of Same Day Entries is not optional for RDFIs. RDFIs should consider the following potential impacts:
RDFIs should discuss new file delivery schedules with ACH Operator
RDFIs should review procedures and resources for processing files in the new delivery windows
RDFIs should process entries based on the Settlement Date provided by the ACH Operator. RDFIs do not need to review Effective Entry Date or any other indicator to determine processing.
RDFIs do not need to determine same day eligibility for processing.
RDFIs should be prepared to also receive debit entries as same day entries.
Determine whether to use the new same-day processing windows to send returns and NOCs. Returns will be allowed, but not required, to be processed on the same day. For a Same Day ACH entry, since settlement is one day sooner, the return deadline is also one day sooner.
Beginning in Phase 1, RDFIs should provide end of day funds availability for all same day credit entries received. Phase 3 will require RDFIs to provide funds availability at 5:00 pm local time for same day credit entries.
Review downstream applications and systems that may be impacted by Same Day Entries.
- RDFIs will receive information from their ACH Operator regarding receipt of the Same Day Entry fees.
- Talk to your FI to determine if Same Day is appropriate and cost effective
- Discuss new file submission and exception resolution cut-off times
The Rule will enable the option for same-day ACH payments through new ACH Network functionality, without affecting existing ACH schedules and capabilities:
Originating financial institutions (ODFIs) will be able to submit files of same-day ACH payments through two new clearing windows provided by the ACH Operators :
- A morning submission deadline at 10:30 AM ET, with settlement occurring at 1:00 PM.
- An afternoon submission deadline at 2:45 PM ET, with settlement occurring at 5:00 PM.
Virtually all types of ACH payments, including both credits and debits, will be eligible for same-day processing. Only international transactions (IATs) and high-value transactions above $25,000 will not be eligible. Eligible transactions account for approximately 99 percent of current ACH Network volume.
All RDFIs will be required to receive same-day ACH payments, thereby giving ODFIs and Originators the certainty of being able to send same-day ACH payments to accounts at all RDFIs.
RDFIs will be mandated to make funds available from same day ACH credits (such as payroll Direct Deposits) to their depositors by 5:00 PM at the RDFI’s local time.
To allow financial institutions and businesses to acclimate to a faster processing environment, as well as to ease the implementation effort, these new capabilities will become effective over three phases beginning in September 2016.
The rule will become effective in three phases:
Phase 1 will become effective on September 23, 2016 (credit entries with funds available at end of RDFI processing day);
Phase 2 will become effective on September 15, 2017 (credit and debit entries with funds available at end of RDFI processing day);
Phase 3 will become effective on March 16, 2018 (credit and debit entries with funds available at 5:00 pm RDFI local time).
Spreading implementation across three phases will ease the industry’s implementation effort, and allow the industry to acclimate to a faster processing environment with same-day ACH credits prior to processing same-day ACH debits.
Same Day ACH transactions will be identified and processed by the ACH Operator using that day’s date in the Effective Entry Date field of the batch of Same Day ACH transactions and meeting the ACH Operator processing deadline. If the entry contains a stale or invalid date in the Effective Entry Date field, the Operator will process the entry in the next available window, which could be same day or next day.
ODFIs at their discretion may require their Originators to further show intent for same-day settlement using an optional, yet standardized, same-day indicator in the Company Descriptive Date field. The Company Descriptive Date field (5 record, field 8) is an optional field with 6 positions available (positions 64-69). Currently, the Rules provide that the “Originator establishes this field as the date it would like to see displayed to the Receiver for descriptive purposes.” Nacha recommends that, as desired, the content of this field be formatted using the convention “SDHHMM”, where the “SD” in positions 64- 65 denotes the intent for same-day settlement, and the hours and minutes in positions 66-69 denote the desired settlement time using a 24-hour clock. When electing to use this convention, the ODFI should validate that the field contains either “SD1300” for settlement desired at 1:00 PM ET, or “SD1700” for settlement desired at 5:00 PM ET.
Faster velocity of payments is expected to introduce risks that must be managed and mitigated. A per- transaction dollar limit is one way to mitigate risk. Financial institutions and businesses will also have to adjust their end-of-day balance forecasting and funding, and the dollar limit is a way to limit the impact. Currently, more than 99% of ACH transactions are under $25,000, so the overall impact of the same-day limit is expected to be modest.
The ACH Operators will edit for the $25,000 limit for Same Day ACH transactions, and will assign next day settlement to any transactions above the limit.
Any account that is able to receive ACH entries today could receive Same Day ACH entries.
A Same Day Entry Fee of 5.2 cents will be paid from the ODFI to the RDFI for each Same Day ACH transaction. Collection and disbursement of Same Day Entry Fees for ODFIs and RDFIs will be handled by the ACH Operators through monthly billing. In billing for the Same Day Entry fees, the ACH Operators will round each financial institution’s monthly statement charge or credit to the nearest cent. For example, an ODFI that originates 13 same-day transactions in September 2016 would be billed $0.68 via its monthly ACH Operator billing statement (i.e., 13 same-day transactions * $0.052 = $0.676, which is rounded to $0.68).
For non-monetary transactions, there are no funds to settle. Generally, these transactions will benefit from same-day processing. Under this rule, most of these transactions will be eligible for same-day processing beginning with Phase 1 of implementation.
The eligible non-monetary transactions include:
Prenotifications for future credits (Prenotifications for future debits will become eligible for same-day processing in Phase 2)
Remittance information (using CCDs and CTXs)
Notifications of Change (NOCs) NOCs are transmitted from the RDFI to the ODFI and will not incur a Same Day Entry Fee
Automated Enrollment Entries (ENRs) will not be processed as same-day entries. ENRs do not use Effective Entry Dates, so there is no way to designate an ENR as a same-day transactions.
The receipt of an IAT triggers the burden of the OFAC screening requirements. Receiving IAT items late in the day could impose a significant burden on many financial institutions to complete the OFAC screening in a timely manner.
Same Day ACH treats TRC and TRX the same as all other eligible SEC codes, where settlement will be based on the Effective Entry Date.
For ACH transactions that need to be returned, faster processing of the return is typically a “win-win” for all parties. ODFIs and Originators will learn about problems sooner and RDFIs will have exceptions processed and settled faster.
Same Day ACH will allow for the same-day processing of returns, regardless of whether the forward transaction is a same-day transaction or not. All returns are eligible to be sent and processed using the same-day processing schedules. Returns that are settled on a same-day basis are not subject to the Same Day Entry Fee and are not subject to the eligibility limit on forward Same Day transactions (i.e., $25,000 per transaction; IAT).
An RDFI is not required to process returns on the same day an Entry is received, regardless of whether the Entry is a Same Day Entry.
A forward Same Day ACH entry that is returned by the ACH Operator (and does not reach the RDFI) will not be charged a Same Day Entry fee.
Reversals are eligible for same-day processing using the same eligibility criteria as other forward transactions. A same-day reversal is limited to $25,000 per transaction, so any reversal to correct a forward entry over $25,000 (for example, to reverse an erroneous next-day credit of $100,000) would not be eligible to be sent as a Same Day ACH entry. Any reversal that is processed and settled same-day will be assessed the Same Day Entry Fee.
ODFIs/Originators must ensure that the Effective Entry Date of a reversing debit to correct an erroneous Credit Entry or a reversing file to correct an erroneous credit file is not earlier than the Effective Entry Date of the related credit(s). Since Phase 1 permits only same-day credits, a debit that reverses a credit Entry will not be eligible for same-day processing during Phase 1. Same-day debits become eligible in Phase 2, so at that time the debit to reverse a credit could be sent and settled the same-day.
CCD and CTX entries, as well as other entries that carry remittance, may be eligible to be sent as Same Day ACH. Requirements related to provision of remittance to Receivers will not change.
Same Day ACH and real-time payments will offer complementary options for users, as they will have distinct functionality and thereby meet distinct needs of various use cases. Today’s ACH Network supports traditional ACH debit payments –bill payments, for example – as well as traditional credit payments like payroll. Approximately 60% of ACH transactions are debit payments. A real-time system would likely provide credit payments only; however, there is benefit to moving both credits and debits faster.
Starting on September 15, 2017, Fiscal Service will begin accepting Same Day ACH credits for tax and other payments to federal agencies. Fiscal Service also expects to enable the use of Same Day ACH debits for tax collections in 2018 and begin originating Same Day ACH credits as payments in December 2017.
For additional FAQs please see the Federal Reserve’s Same Day ACH Resource Center: