Same Day ACH became more feature-rich in late 2018, and has since been heavily utilized by our merchants and integration partners. This post will introduce you to its benefits, and provide a few real-life examples of how it can be leveraged.
A Primer to Same Day ACH
Before we dive into the details of Same Day ACH, it’s important to recognize the key players involved in ACH. 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 the financial institution in which the ACH transaction starts or originates from (e.g., your processor’s bank), while an RDFI is the institution that receives the ACH transaction (e.g., your customer’s bank).
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 own platform, and an intuitive dashboard, to help you streamline operations and efficiently manage cash flow. Our service is backed by 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 is Same Day ACH?
ACH functions as a batch processing system, where transactions are submitted in bulk multiple times a day. Same Day ACH ensures that your transactions are submitted in an expedited batch for processing on the same day. While Same Day ACH is not a real-time payment method, available funds are deposited directly into bank accounts faster than ever before.
There are two Same Day ACH transaction types: Same Day Debits (think: last-minute bill payments) and Same Day Credits (think: same day direct deposits. Funds from ACH Debit transactions are still held by Actum during a settlement period (the time required for a transaction to post in your operating account).
Without Same Day ACH, a normal transaction would take until the following morning before clearing between banks being reflected in the customer’s bank. However, NACHA now allows ACH Debits and Credits to be processed on the same day, as long as the transaction was submitted in time. This is key for payment-related businesses that want to remain competitive.
Benefits and Use Cases
When you work with Actum, submitted debit transactions will clear by either 12:00 PM or 4:00 PM (Central) on the same day, depending on the file delivery window chosen.
Here are a few ways that industries using this feature can benefit from fast transmission times:
- Disaster Relief for Nonprofits: In the event of an emergency, such as a natural disaster, funds need to be 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: If a consumer doesn’t have a recurring payment plan set up, they might forget to make their payment until right before the due date. Same Day ACH can allow last-minute payments to settle faster with earlier transmission times.
- Marketplace and Gaming Platforms: When a consumer sells a service or wins a wager, they want their payouts delivered quickly. Same Day ACH can help deliver fast, accessible, and affordable payouts.
The Bottom Line
Faster ACH processing 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.