By Jon Moen, SVP/Director of Treasury Management

The final phase (or Phase III) of Same Day ACH addresses the timing of funds availability. It’s officially been implemented across the country. As of March 16, 2018, a credit transaction sent via Same Day ACH has to be made available for cash withdrawal by 5:00 PM local time. Previously, the receiving bank (or financial institution) was required to post Same Day ACH transactions by the end of the business day. First Bank was already making funds available after receipt and processing of the Same Day ACH files, but not at the end of the business day. As you may know, Same Day ACH transactions rolled out in September 2017 for credits (allowing money to be pushed) and in September 2018 for debits (allowing money to be pulled).

All financial institutions using ACH are required to receive Same Day ACH transactions (both debits and credits) even if they are not planning to offer the origination of Same Day service to their clients. This mandate requiring all financial institutions to receive will ensure a consistent and strong payment network for Same Day ACH service. It’s important to note, Same Day ACH will not be made available for cross-border or International ACH payments (known as an IAT payment type).

This is due to concerns over the additional screening needed, fraud reduction verifications, and the timely manner in expediting the IAT payment. Another restriction of Same Day ACH is that only ACH transactions up to $25,000 are eligible for same day availability in an effort to help mitigate risk. According to the National Automated Clearinghouse Association (NACHA), 99% of ACH transactions are under this limit, so the restriction should have a minimal downside.

If businesses aren’t already using Same Day ACH services, they’ll benefit by gaining greater control over their cash receipts, improving cash flow, and utilizing a more cost-effective way to collect payments. For more information or questions regarding Same Day ACH, or the Same Day ACH expansion phase, please feel free to contact a trusted advisor from First Bank’s Treasury Management group.