Same day ACH is now a reality for initiating credits. For debits, same day ACH will be available next year.
ACH is a form of Electronic Funds Transfer or EFT. Each time you pay or receive salaries and wages, make direct deposits, pay for utilities or conduct any other transaction, the funds move through the ACH network.
The National Automated Clearing House Association or NACHA is the organization that regulates the activities of the ACH. It has initiated a new and innovative additional network functionality to streamline and speed up the fund transfers.
This approach is termed as Same Day ACH. Here’s how it works.
Prior to same day credits processed through the ACH network, recipients had to wait at least a day, and often more, to receive the funds.
The new Same Day ACH system which went into effect in September 2016 offers users, banks, and financial institutions the facility of two additional windows for processing credit transactions:
These windows make it possible for the speedier movement of funds between accounts. As long as payments are made within the specified time frames, credit transactions are processed the same day they are initiated. In this way, recipients of funds can access the money by the end of the business day.
To make use of this facility, banks and financial institutions must comply with certain conditions.
Remember, though, your rates for same day ACH will be higher than the base fee charged to the banks.
Businesses, individual consumers, banks, and other financial institutions will find that the Same Day ACH is highly advantageous in many ways.
How can your business benefit from Same Day ACH?