HERNDON, Va. (10/16/14)--The head of NACHA, the Electronic Payments Association, says same-day automated clearinghouse (ACH) payments are key to the future of the payments system.
In a letter published in American Banker, NACHA President/CEO Jan Estep said the organization is working on a phased implementation approach to move the ACH network from next-day settlement to same-day settlement during three different windows.
While entities such as the Federal Reserve have stressed the need for real-time payments, Estep said that it is only part of the solution.
"While there are some unmet consumer and corporate needs that would benefit from real-time payments, there are many other needs that can be met by same-day payments. Expedited bill payments, payroll applications and many ad-hoc business payments, for example, would benefit greatly from same-day ACH," she wrote. "Same-day ACH would allow the network to move payments faster and provide additional functionality that meets the industry's needs for faster payments."
Estep also provided insight into the status of the organization's rulemaking when it comes to same-day ACH.
"Over the past several months, NACHA has methodically collected and analyzed feedback on this approach from financial institutions, businesses and payments service providers in an effort to identify a workable path forward in advance of formal rulemaking on same-day ACH," she wrote.
NACHA last addressed the possibility of same-day ACH settlement in March, when it outlined the three phases of implementation.
First, users will be able to provide same-day ACH credits for payroll, person-to-person payments and expedited bill pay. The second would be same-day ACH debits and payments of utility, mortgage, loan and credit card bills. The third would be a focus on an improved level of service and reducing counter-party risk (News Now March 19).
The Credit Union National Association and its payments subcommittee continue to meet and discuss same-day ACH and faster payments issues with NACHA, the Federal Reserve Banks financial trade associations and other key stakeholders.
Use the resource links below to access Estep's full letter and previous News Now coverage.