Same Day ACH – Faster Payments Coming

NACHA (The National Automated Clearing House Association) is implementing a same-day ACH rule that allows financial institutions to provide a faster option for ACH processing. All consumers, businesses, government entities and financial institutions are eligible for both credit and debit ACH same-day payment processing under the new program. International transactions and transactions above $25,000 will not be eligible under the same-day rule.

Generations FCU will be rolling out these changes on September 15, 2017.

What is ACH?
Most member accounts have ACH transaction activity; these transactions are typically originated by electronic authorization, but can also include paper checks converted by the merchant to an electronic approval posted to an account automatically. Typically, ACH transactions are transactions like a direct deposit or payment made to utility and loan companies. The important thing to remember is these types of transactions are set by the merchant, not Generations.

What This Means for Generations Members
In the past, ACH transactions have generally posted to our member’s accounts on the business date following the authorization. In other words, if a member authorized their energy company to withdraw $60.00 for their monthly bill on the morning of 7/10, the withdrawal posted to their account early on the morning of 7/11. This resulted in a one day “float” for authorizing transactions.

With the coming same-day ACH changes, this delay in transactions posting to our members’ accounts is eliminated. Once authorized, these transactions can post the same day you authorize them.

Best Practices
Due to these changes, payments should not be authorized until the funds are in the account. Counting a direct deposit, night drop deposit, or check hold release to post the following day is a risky practice. Transactions authorized prior to an anticipated deposit could result in insufficient funds (NSF) fees, CU Coverage fees (privilege pay for enrolled members), and returned items to the merchants, which could also result in merchant overdraft fees.