1. Same Day ACH Corporate Considerations and Opportunities
Cristina Hellems, AAP
VP/Senior Product Manager
MUFG Union bank
Transaction Banking
OCTOBER 20, 2016

2. Current US Faster Payments Initiatives
Payment Organizations Working on Moving Electronic Payments Faster in the US:
Most significant NACHA rule change in over 40 years
Evolution of electronic payments
Improves liquidity
Reduces reliance on checks
Provides flexibility for handling unforeseen business circumstances
Strategies for Improving the U.S. Payment System
Real Time Payments
New payment rails
Available 24/7
Credit push
Final/No Returns

3. NACHA SDA Phase I Credits Only 9/23/16 $25,000 or Less
Same Day ACH-Phase I
Same Day Receipt-Mandatory for FIs
All Receiving Financial Institutions (RDFIs) must receive SDA Credits and make funds available by close of financial institution’s processing day.
RDFIs will be compensated $0.052 for each received SDA Credit transaction.
Same Day Origination-Optional for FIs
Originating Financial Institutions (ODFIs) will need to pay RDFIs $0.052 for each SDA Credit transaction.
Premium vs. Basic ACH service.
Two new SDA Processing/Settlement windows:
Processing: 10:30 am and 2:45 pm ET Settlement:1:00 pm and 5:00 pm ET.
NACHA SDA Phase I
Credits Only
9/23/16
$25,000 or Less
All SECs except IATs

4. Debits & Credits $25,000 or Less
Same Day ACH–Phase II
NACHA SDA Phase II
Debits Allowed
9/15/2017
Debits & Credits $25,000 or Less
All SECs Except IATS
Origination-Optional
ODFIs will need to pay RDFIs $0.052 for each SDA Credit and Debit transaction.
Premium vs. Basic ACH service.
Two new SDA Processing windows:
10:30 am and 2:45 pm ET
7:30 am and 11:45 am PT
Two new SDA Settlement windows:
1:00 pm and 5:00 pm ET
10:00 am and 2:00 pm PT

5. Same Day ACH-Phase III NACHA SDA Phase III 3/16/2018
Must make funds available by 5:00 pm local time.

6. Common Use Cases of Same Day ACH
Same Day ACH Use Cases
Common Use Cases of Same Day ACH

7. Same Day ACH Receipt-Considerations and Opportunities
Accelerated funds availability in deposit accounts at your financial institution.
Improved liquidity.
Ability to retire debt faster.
Excess cash can be invested.
CONSIDERATIONS
How will you update your customers’ account?
Will you provide “as of date” posting?
Will this require internal accounting system changes?
Do you have adequate staff to support any procedural changes?
Review customer agreements.
How will you communicate changes to your customers?
Staff Training?

8. Same Day ACH Origination-Considerations and Opportunities
STEP ONE:
Talk to your financial institution first about Same Day ACH (SDA).
Is your financial institution offering Same Day ACH Origination? If not, when?
If you are on Pre-fund, will your financial institution allow SDA for Pre-fund ACH Origination customers?
What are the deadlines for submitting Same Day ACH? Are they same for transactions submitted via the WEB or Transmission channel?
Find out if your financial institution will require the optional Descriptive Date field in the NACHA file? Or rely solely on the Effective Entry date in the ACH Batch Header Record?
What are the fees your financial institution will charge for SDA origination?
Do you need to enroll? Opt In or Opt Out for Same Day Origination? Do you need to establish a new Originating Company ID?
Is your current ACH risk exposure limit adequate?

9. Same Day ACH Origination-Considerations and Opportunities-continued
What changes will you need to make to your ERP system? What is the timeline, cost ,and resources needed to make changes to your systems to support SDA?
If your system uses the File Creation date as the Effective Entry date, financial institutions’ back end ACH systems will no longer edit the Effective Entry date of the file.
If a file is received with the current date and is within the SDA processing window , the financial institution will process as an SDA file resulting in SDA settlement and SDA fees. Did you really intend for the file to be sent SDA?
Will SDA require internal accounting system changes?
ACH processing and funding units need to be aware of SDA transactions as settlement will impact liquidity.
Engage your IT, Accounting, Accounts Payable, Account Receivable, and HR departments
How will you update your customers’ accounts?
Will you provide “as of date” posting?
Do you have adequate staff to support any procedural changes?
Review your agreements or customer communication?
Will you pass SDA costs to your customers?
Do you need to update internal procedures?
What kinds of control do you currently have in place? Will you need additional controls?
Staff Training?

10. SDA Originators Quick Guide
This is the SDA indicator.
Direct transmission customers may also use an additional optional indicator in the Company Descriptive Date field in the Batch Header record in field 8 and use “SDHMM”-SD1300 or SD1700.
Effective Entry Date Field
This is a premium ACH service.
Financial Institutions will need to pay $0.052 to RDFIs for each SDA transaction originated.
Check with your financial institution.
Additional Fees
All Standard Entry Codes (payment types) except International ACH (IATs)
ACH transaction $25,000 or less.
ACH Returns are not required to be returned on a same day basis.
Reversals may be processed as a Same-Day ACH transaction following NACHA Reversal and Same-Day ACH rules.
Eligibility for SDA
Origination

11. Use of Fraud Deterrent Products
Talk your financial institution about Fraud Deterrent Products
ACH industry expects online ACH fraud to see an increase with Same Day ACH, particularly in Credit Origination.
Best Practices/Guiding Principles
Implement Dual Payments and Dual User Administration.
For ACH Receipt debit protection, use ACH Blocks or ACH Positive Pay.
Look out for Business Compromise schemes.
Conduct ongoing training staff on online security.

12. Additional Same Day ACH Resources
NACHA WesPay Federal Reserve The Clearing House (EPN)

13. Questions