Processing just got a little bit faster. Mid-September, it was announced that the nation’s automated clearing house network had launched same-day clearing and settlement for debit transactions. Same-day debits have been called “Phase 2” in NACHA’s faster-payments plan. Phase 1, same-day credits, was introduced a year ago, allowing users to move payments from their bank accounts to the accounts of payees. This second phase – same-day debits – enables businesses to pull funds from customers’ accounts.
But why the delay? Why would NACHA wait a whole year to introduce same-day debits? The answer is risk. ACH debits are considered riskier than credits. While it’s true that fraud losses across ACH are low compared to other networks, debits do invite a certain level of mischief. According to the experts, when processing is sped up, risk spikes considerably. The biggest risk is funds being removed from a consumer’s account without his or her (account holder’s) authorization.
Faster processing not only leads to overlooked mistakes, but also errors in withdrawal dates. When processing time is sped up, it is critical that withdrawal dates are debited/posted to an account when the account holder authorized the transaction. Conversely, faster payments also mean greater efficiency.
Jane Larimer, chief operating officer and general counsel at NACHA, explained that same-day processing also means returns come in faster. Thus, “you notice there’s a problem faster. There are no new vectors of fraud, it’s just that [money] is moving faster.”
The changes are not over yet. Phase 3 of NACHA’s plan is set for March 16, requiring receiving depository financial institutions (RDFIs) to make funds available by 5 p.m. As of now, the rule has been the end of the bank’s processing day (which can be as late as overnight). It does not look like this new rule will be a problem, considering that 78 percent of RDFIs this spring were already meeting – what will soon be – the 5 p.m. requirement.
Are you looking for a processor that enables safe, secure and fast ACH debit transactions? Industry-leading EMerchantBroker.com allows your business to set-up legitimate debits drawn from your customer’s account. EMB’s debit program is very flexible, offering you the option to schedule debits for a one-time occurrence or a regular, recurring basis.
The long list of markets ACH Debit currently serves includes: membership organizations, bill payments, business-to-business, medical, government, educational, utilities, insurance, day care, health clubs, not-for-profit, wholesalers and suppliers, among many others. Has your business struggled securing these merchant services in the past? EMB specializes in working with merchants banks consider “too risky”. The application can be completed in a matter of minutes, and you will hear back in as little as 24-48 hours.