Same Day ACH gained more enhancements in late 2018 and is heavily utilized by our merchants and integration partners. This post will introduce you to its benefits and provide a few real-life examples of same day bank transfers in action.
A Primer to Same Day ACH
Before we dive into the details of Same Day ACH, it can be helpful to recognize the key players involved. First off, NACHA is the regulatory body governing the ACH network. Second, there are ODFIs (Originating Depository Financial Institutions) and RDFIs (Receiving Depository Financial Institutions). An ODFI is a financial institution from which the ACH transaction starts or originates, while an RDFI is an institution that receives the ACH transaction.
Finally, there are third-party processors, like Actum, that make it easy to connect to the ACH Network and facilitate ACH transactions. We provide a few API endpoints that you can connect to from your platform, along with an intuitive dashboard. You can use this technology to streamline operations and more efficiently manage your cash flow. Our service includes our 20+ years of industry leadership in the ACH processing space. You can learn more about how ACH works at the following link: ACH 101: Understanding the Automated Clearing House.
What are Same Day ACH Transfers?
Without Same Day ACH, a typical transfer would take until the following morning before clearing between banks to become available in your customer’s bank. There’s good news, however: NACHA now allows ACH Debits and Credits to be processed on the same day, as long as the transaction gets submitted on time.
ACH uses a batch processing system, where transactions are submitted in bulk multiple times a day. Same Day ACH ensures that your bank transfers are sent in an expedited batch for processing on the same day. While Same Day ACH is not a real-time payment method, it is a more streamlined one. Available funds get deposited directly into bank accounts faster than ever before.
With Same Day ACH, there are two transfer types: Same Day Debits (think: last-minute bill payments) and Same Day Credits (think: same day direct deposits. Actum holds transfers during a settlement period, or the waiting period required for funds to post to your bank account).
Benefits and Use Cases
When you work with Actum, submitted debit transactions are processed by either 12:00 PM or 4:00 PM (Central) on the same day.
Here are a few industries where faster transmission times can be useful:
- Disaster Relief for Nonprofits: In the event of an emergency, such as a natural disaster, funds need to get received in a fast and cost-effective way. With Same Day ACH, donations can be sent quickly, and funds can be delivered to victims, first responders, and more, in near real-time.
- Loan, Real Estate, or Utilities Bill Payments: Let’s say that a customer doesn’t have autopay set up. They might forget to make their payment until right before the due date. Same Day ACH can allow last-minute bill payments to settle faster with earlier transmission times.
- Marketplace and Gaming Platforms: When a consumer sells a service or wins a wager, they may want their payouts delivered quickly. Same Day ACH can make your platform stand out from the crowd.
The Bottom Line
Faster ACH Debits and Credits can help you streamline your operations by speeding up accounts payable (and receivable). Contact our ACH experts to learn more about how your industry can leverage this feature.