There’s still nothing that’s been set in stone, but the ways that automated clearing houses handle their payments could be changing at some point in the future. The National Automated Clearing House Association, or NACHA is doing some very serious research into the feasibility of making ACH payments occur on the same day, at least in America. If this comes to pass, it could mean some pretty big changes.
ACH payments of today have one big advantage over credit card transactions and other forms of payment—they are much cheaper. The reason for this is that all the accumulated transactions made electronically through cash are stored away until the end of the business day. At a specific point in time, all transactions a business makes are then handled in one large “batch,” and because it is done this way, ACH payments don’t have to apply a service charge for each individual transaction, the way credit cards do. Of course, this also means that to take advantage of these pretty sizable savings, businesses must exercise a little more patience in the movement of their money.
NACHA is being very bullish about changing the way ACH works. This isn’t just an idea being tossed around idly in a meeting room, there’s a lot of hard work, market, demographic, economic and infrastructure research going on right now to ensure the feasibility of it, and implementing it smoothly, so this is being taken very, very seriously.
The way that NACHA is planning to do this is quite simple. Right now, ACH payments take place at only one point in the day. The new future NACHA is looking at for ACH payments involves two additional periods during the day when transactions are settled, for a grand total of three periods during a day when payments are actually processed.
What this means to small businesses is that ACH could be an even more attractive option to credit cards or other services since direct payment from customers can occur faster. It also means for companies that in the event of some kind of accounting or clerical error, it corrections can be made much faster, such as in salary errors where sick employees may have been incorrectly processed for leave. Even for private individuals, this may mean it’s easier to share funds with other people in a faster, more direct fashion.
The bottom line is, with up to three separate periods for processing payments, NACHA is making ACH more convenient, more efficient and more viable for everyone. How this will affect businesses going forward will be very interesting, as well as the possible ramifications of the move. Will ACH still be cheaper than credit card charges if it process multiple times per day? How will scheduling recurring payments be affected with more than one window of payment to consider?
These and many other questions are all part of the research being done into same day ACH, but it’s an interesting and much needed development for the payment processing world.
Posted in ACH Processing on May 03, 2016