Same-day ACH payments align every bank in the United States to process ACH requests three times daily. Not every ACH payment is eligible for same-day processing, but same-day ACH allows almost all processing to occur more quickly.
With processing occurring three times daily, business-to-business transactions occur faster, bill payments are more flexible and payroll processing is more agile.
How Does Same Day ACH Work?
Up until 2015, ACH transfers took anywhere between two to five business days. After years of lobbying, the Automated Clearing House moved to launch a campaign known as same-day ACH. Under this plan, two new settlement timing windows were added to each business day: the first at 1:00PM Eastern Time, and a second at 5:00PM Eastern Time. These were in addition to the already present 8:30AM Eastern Time window.
With three system-wide processing windows, individuals and businesses could now send a transaction at 9:30am and know it would be processed by 1:00pm that same afternoon.
The process of getting all banks in the United States aligned on these new processing times was done in three steps, from 2016 through 2018. While the new system schedule made funds available on the same day for credit transactions, debit transactions still require a mandatory waiting period. This waiting period is to allow the bank that funds are being removed from two days to stop the transaction before it is considered settled.
Who Uses Same Day ACH?
ACH’s governing body, NACHA, identified many potential uses for same-day ACH, including:
Payroll – Companies can pay hourly, temporary, or even gig workers faster.
Urgent Funds Transfer – Time-sensitive payments are possible with same-day ACH, like paying a bill before it becomes late.
Business to Business (B2B) payments – Invoices can be settled more quickly between businesses.
Same-day ACH is simply an option for moving payments faster and is not mandatory or required. The ACH network continues to support original and traditional processing times.