A New Dawn on Same Day (ACH)
Posted by Justin Lutes, AAP, NCP, Vice President, Correspondent Services, Catalyst Corporate FCU on 12/27/2018

A new round of Same Day ACH (SDA) advancements is on the horizon! Earlier this year, NACHA’s voting membership approved three new SDA rules that will take effect over the next two years. 

SDA is already the leader in faster payments processing, with nearly 41 million SDA transactions conducted nationwide in the second quarter of 2018, a year-over-year increase of 243 percent. NACHA’s expansion of SDA capabilities will further speed payments processing for consumers, businesses and financial institutions.

The first new rule increases the speed of funds availability for same-day and next-day ACH credits. The second rule change increases the SDA per-transaction dollar limit to $100,000. The third rule allows submission of SDA transactions to the ACH network an additional two hours every business day.

NACHA will begin implementing these rules in September 2019. As the New Year begins, credit unions may want to evaluate the impact these SDA changes will have on their funds availability policies.

Providing Faster SDA Funds Availability

The first rule, which takes effect Sept. 20, 2019, increases the speed of funds availability for certain SDA credits. Faster funds availability for same-day and next-day ACH credits aids both consumers and businesses that receive deposits and disbursements via ACH.

Funds from SDA credits processed in the existing, first processing window will be available by 1:30 p.m. RDFI's local time. Funds from non-SDA credits will be available by 9 a.m. local time on the settlement date, if credits were made available to the RDFI by 5 p.m. on the previous day (i.e., apply the existing “PPD rule” to all ACH credits).

Increasing the SDA Dollar Limit

The second new rule, effective March 20, 2020, increases the SDA per-transaction dollar limit to $100,000. Currently, SDA transactions are limited to $25,000 per transaction.

While the current limit covers approximately 98 percent of all ACH transactions, as well as 89 percent of B2B (business-to-business) transactions, a higher dollar limit would benefit some end users. Examples include SDA payments for payrolls, claims payments, B2B payments and reversals of larger pools of transactions.

Expanding Access to SDA

The third new rule expands access to SDA by the two ACH network operators. A third processing window provides two additional hours each business day, until 4:45 p.m. EST, to submit SDA transactions. ACH end users will have a longer business day to initiate SDA payments such as payrolls, bill payments and B2B transactions.

Currently, the latest an ODFI can submit SDA transaction files to an ACH operator is 2:45 p.m. EST. The new processing window is intended to balance expanded access to SDA with minimal impact to financial institutions’ end-of-day operations and the re-opening of the next banking day/Fedwire re-openings at 9 p.m. EST. The proposed new window allows for closing Fedwire by 7 p.m. EST, with a two-hour window before re-opening.

This rule is currently slated to take effect September 18, 2020, with a NACHA approval deadline of June 30, 2019. Some financial institutions, however, have requested additional implementation time. If NACHA approves this rule after July 1, the effective date will be extended to March 19, 2021.

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