Data this week from the electronic payment association, NACHA, shows that the new same-day payment functionality totaled $3.8mm transactions worth almost $5B for the first full month of availability. That is a good start, and while some community banks are not taking advantage of the functionality, an estimated 95% will be in the next couple of months. In this post, we take a quick look at the progress that banks are making and point out one area to focus on to get a jump on the large national banks.
Same Day ACH is long overdue, and businesses need to be educated to its advantages and availability. Next to direct deposit (mostly payroll), business-to-business (B2B) payments are the second most popular traffic for ACH.
How Banks Can Make A Difference
Most small businesses still conduct B2B payments via check. Community banks have an area to add value by creating new products around same day ACH, educating business customers and making it easy for them to use.
Setting a clear cut off time (most banks are 11:30am ET with some following ACH guidelines and promoting two cut off times 10am and 2pm ET), limits and getting pricing/interchange charges right is the first step. Then it is getting a plan together to train bank staff and then market. Most businesses will want to migrate to Same Day ACH, but as of yet, no banks have launched a marketing effort on the capabilities.
This will change as we understand that Wells, Bank of America and others will be promoting same day ACH to both retail and commercial customers in the next 90 days. However, until they get their act together, community banks can get out ahead of the message, be the first to announce the capabilities in the community and garner the attention of the media.
While the first phase of Same Day ACH is complete, allowing for credit ACH, next September, banks will be able to clear debits the same day which will open up additional opportunities for bill payments.
For banks that take advantage of our Converge online clearing and cash management platform, you have full same day ACH capabilities. If any other bank wants to learn more about Converge or if you are looking for further insight or best practices to employ as you begin to take advantage of this new payment’s opportunity, we are standing by to help. Regardless of your technology, community banks have the opportunity to make a difference,and promoting same day ACH to businesses is an easy way to differentiate yourself to a profitable customer segment.
Submitted by Chris Nichols on November 17, 2016