Updated by 11.20.2023
Same Day ACH Steams Ahead, B2B, Too
Same Day ACH in which credit and debit payments originating from one financial institution and received at another are settled on the same day continues to take the electronic payments segment by storm.
Just ask Nacha (the National Automated Clearing House Association) which manages the development, administration, and governance of the ACH Network. Figures released by the association in mid-May indicate that Same Day ACH dollar value rang up at $290.3 billion during the first quarter of 2022, a 53.3 percent increase over Same Day ACH dollar value recorded during the first quarter of 2021. Same-Day ACH payment volume for the period totaled 154.2 million, representing an increase of 7.8 percent over the volume recorded in the first quarter of 2021.
Interestingly, healthcare, in particular, saw an especially marked increase in Same Day ACH volume during the first quarter of 2022 compared to the first quarter of 2021, rising by 8.9 percent to 105.3 million. Same-Day ACH transactions in the Internet segment also trended upward during this period, increasing by 8.1 percent to 2.2 billion.
Nacha officials attributed such growth in part to a hike in business-to-business (B2B) payments. B2B payments made during the first quarter of 2022 totaled 1.48 billion, up 15 percent from the 1.2 billion in B2B payment volume recorded for the first quarter of 2021. This also represents a 35.5 percent rise in B2B payment volume from the first quarter of 2020, according to Nacha. An increase in the Same Day ACH per-payment limit, which took effect on March 18, 2022, and now stands at $1 million, has helped to up the ante as well, Nacha President and CEO Jane Larimer said in a statement when the figures were released.
Top Use Cases
Not surprisingly, Nacha has identified multiple use cases for Same Day ACH. Four use cases are considered “significant”, as well as to offer multiple benefits. These include:
- Same-day payroll. Same-Day ACH allows businesses to increase job satisfaction and company loyalty among hourly workers by meeting their demand for timely payments. Businesses that adopt Same Day ACH also enjoy the flexibility to execute late and emergency payrolls, again giving employees faster access to their pay while increasing job satisfaction and staff loyalty.
- Business-to-business (B2B) With Same Day ACH in their payment processing arsenal, trading partners can settle invoice payments more quickly. Remittance information can be included with payments, simplifying reconciliation.
- Expedited bill payments and collection. Same-Day ACH enables consumers to make on-time payments and for businesses to receive them via ACH credit and debit. Consumers like this option because they can avoid incurring late fees, while businesses favor it because it eliminates the collection hassles they encounter when invoices are not paid when due. What’s more, with Same Day ACH, late payments can be received and credited faster, in turn decreasing the extent of effort businesses must expend to collect the monies owed them.
- Account-to-account transfers. Credit for transfers between deposit accounts owned by the same consumer or business is faster when these transfers are made via Same Day ACH.