By Sarah Broughton
Same-Day ACH is about to become reality for us all. Are you prepared?
From September 23 2016, NACHA will begin a 3-phase process that will make virtually all types of ACH payments eligible for same-day processing. A monumental change for banks and corporates, which will be enabled to originate and receive same-day payments…
Dates for your diary
Phase 1 Credits - Sep 2016
Phase 2 Debits - Sep 2017
Phase 3 Defined availability - Mar 2018
“Same Day ACH serves as an immediate action the industry has undertaken to modernise the payments system, and creates a building block for a variety of products and services. Same Day ACH creates value for end users through the certainty of its reach to all bank accounts in the U.S.”—Janet O. Estep, president and CEO of NACHA
The benefits of the rule change are set to go far beyond the obvious convenience, with promises of cost reduction and new revenue opportunities to look forward to.
However, there are major challenges ahead to deliver Same-Day ACH—From updating current technology, to concerns that a shorter processing period will lead to fraud and compliance risk.
Here we identify the key concerns around Same-Day ACH and ask Pelican’s own Senior Product Manager, Tristan Blampied, to provide the solutions:
What are the performance requirements?
ODFIs (Originating Depositary Financial Institution) will of course need to ensure all of their customers’ transactions are submitted before the submission deadlines. Likewise, RDFIs (Receiving Depository Financial Institution) will need to ensure the incoming items are processed within the required timeframes. Pelican is able to process large volumes of high frequency data in quick succession, ensuring all the processing requirements are met.
How difficult will it be linking a core banking platform with your payments gateway, for a scheme that now settles intra-day?
Pelican is a comprehensive payments Hub which can sit in-between your Core Platform and external Payment Gateway(s). Pelican is highly configurable meaning you can effectively outsource the modifications / integration work to adapt your business to same-day ACH.
How will I instruct whether to process as Same-Day or Non-Same-Day ACH?
Pelican has intelligent, rules based routing capabilities which can be automatically applied based on a flexible set of criteria.
What about returns and rejects?
Pelican can treat returns / rejects differently depending on the code present in the notification report, and route to different destinations or teams accordingly.
How can I meet compliance requirements in such a short processing period?
Compliance risk is quite rightly making most headlines in the run up to phase 1. Again though, our built-in, highly intelligent, and automated compliance module is able to accurately process large volumes of financial data in an incredibly short period of time—Meeting the Same-Day ACH deadline, while ensuring all the regulation requirements are met.
OK. What about the future?
US real-time payments is also now on the horizon and it has been announced that this will be based around ISO 20022 standards. Pelican has a long history of processing ISO 20022 XML and the format is available ‘out of the box’ within the system. Further, Pelican has long supported multiple high frequency message processing protocols.
Of course implementation plans are still been revealed, and a lot can change between now and September—but you can be assured that we will keep you updated and supported no matter what other challenges arise during this exciting time.
Same-Day ACH has been a long time coming—but it’s going to have been worth the wait.