Presented by: Jen Wasmund, AAP, NCP Vice President of Education and Compliance. Jordan Morell, AAP, NCP Associate Director of Education Services

Transcription

1 Presented by: Jen Wasmund, AAP, NCP Vice President of Education and Compliance Jordan Morell, AAP, NCP Associate Director of Education Services

2 Regional Payments Associations, through their Direct Membership in NACHA, are specially recognized and licensed providers of ACH education, publications and support. Regional Payments Associations are directly engaged in the NACHA rulemaking process and Accredited ACH Professional (AAP) program. NACHA owns the copyright for the NACHA Operating Rules & Guidelines. The Accredited ACH Professional (AAP) is a service mark of NACHA. DISCLAIMER: This presentation and applicable materials are intended for general education purposes and nothing in this presentation should be considered to be legal, accounting or tax advice. You should contact your own attorney, accountant or tax professional with any specific questions you might have related to this presentation that are of a legal, accounting or tax nature. 2

3 Same Day Overview Identifying Same Day Entries Communicating Use Cases 3

4 Making Same Day ACH Work for You 4

5 To ease the industry s implementation effort, the new ACH Network functionality will be implemented across three implementation phases Functionality Phase 1 Sept. 23, 2016 Phase 2 Sept. 15, 2017 Phase 3 March 16, 2018 Transaction Eligibility ($25,000 limit; IAT not eligible) Credits only Credits and debits Credits and debits New Same Day ACH Processing Deadlines 10:30 AM ET and 2:45 PM ET 10:30 AM ET and 2:45 PM ET 10:30 AM ET and 2:45 PM ET New Settlement Time(s) 1:00 PM ET and 5:00 PM ET 1:00 PM ET and 5:00 PM ET 1:00 PM ET and 5:00 PM ET ACH Credit Funds Availability End of RDFI s processing day End of RDFI s processing day 5:00 PM RDFI local time Times shown represent the approximate times for an ODFI s deadlines to transmit same-day ACH transactions to an ACH Operator. 5

6 Individual Entries of $25,000 and under All Standard Entry Class (SEC) codes except for International ACH Transactions (IATs) Non-Monetary Entries, such as prenotifications (prenotes), with the exception of Automated Enrollment Entries (ENRs) With the exception of prenotes for future debit Entries, all non-monetary transactions will be eligible for Same Day ACH immediately in Phase I 6

7 ACH Rules Enforcement panel also has the final authority to make a determination as to whether an ODFI, Originator or Third-Party Sender has attempted to evade the $25,000 per-entry limitation on Same Day Entries Attempts to do so by any Originators or Third- Party Senders may lead to Notices of Possible Fines for the ODFI of the Entries 7

8 ACH credits become eligible for same-day Settlement Settlement for same day credits will occur at 1:00pm and 5:00 pm ET RDFIs would be required to make funds available (not available for withdrawal) from Same Day ACH credits by the end of their processing day Phase I implementation date September 23,

9 Designed to mitigate operating and investment costs for RDFIs who will all be required to participate in Same Day ACH Approved fee is set at 5.2 cents per Same Day transaction to be paid by the ODFI to the RDFI of the Entry Periodic Reviews of the Same Day Entry Fee will occur and be conducted by NACHA staff at five, eight and 10 years after implementation of the Rule 9

10 The return timeframe as it exists now in the NACHA Operating Rules will not change! However, Same Day enables the RDFI to process returns right away on Settlement Date at its discretion, regardless of whether the forward Entry was a Same Day transaction or not Transaction limit and IAT restrictions do not apply to returns 10

11 Same Day ACH for ODFIs 11

12 Same-day ACH transactions will be identified/processed by the ACH Operator Utilizing Effective Entry Date field Same-day ACH transactions will be identified by the ODFI and its Originator by using the current day s date in the Effective Entry Date field Stale dated and invalid values in this field will also qualify for Same Day processing OPTIONAL: Company Descriptive Date/Company Discretionary Data Fields may also be used by the ODFI and its Originator 12

13 Field name Format Location Purpose File Creation Date YYMMDD File Header record (mandatory) Indicates date file created by ODFI to Operator, Operator to Operator, or Operator to RDFI Company Descriptive Date Alphameric Batch Header record (optional) Effective Entry Date YYMMDD Batch Header record (required) Settlement Date 3 digit Julian numeric Batch Header record Originator inputs this date that it would like Receiver to see for description, never used to control timing For Same-Day ACH Originator may indicate intent to ODFI by populating with either SD1300 or SD1700 Date specified by Originator as date it would like Entries to settle For Same-Day ACH date must be either current day, stale or invalid Inserted by Receiving Operator as date DFI will be debited/credited by the Federal Reserve Note Stale date: a date that is in the past Invalid date: blank, zero, partially blank, partially non-numeric, incomplete, day number higher than 31, month number higher than 12 13

14 Handling of Effective Entry Dates (EED) Today s date: Oct. 25, 2016 Batch EED: Batch submitted by 10:30 AM ET Batch submitted by 2:45 PM ET Batch submitted after 2:45 PM ET Batch settled 10/25/16, 1:00 PM ET Same-Day Entry Fee charged Batch settled 10/25/16, 5:00 PM ET Same-Day Entry Fee charged Batch settled 10/26/16, 8:30 AM ET No Same-Day Entry Fee charged 14

15 Handling of Stale/Invalid EED Today s date: Oct. 25, 2016 Batch EED: (stale) Note: stale date means a date that is in the past Batch submitted by 10:30 AM ET Batch submitted by 2:45 PM ET Batch submitted after 2:45 PM ET Batch settled 10/25/16, 1:00 PM ET Same-Day Entry Fee charged Batch settled 10/25/16, 5:00 PM ET Same-Day Entry Fee charged Batch settled 10/26/16, 8:30 AM ET No Same-Day Entry Fee charged ACH transactions that have stale or invalid Effective Entry Dates will be settled by the ACH Operator at the earliest opportunity, which could be the same day 15

16 Example of portion (positions 21-78) of Company/Batch Header Records sent on October 25, 2016 Company Discretionary Data Company Identification SEC Company Entry Description Company Descriptive Date Effective Entry Date Settlement date (Julian) Direct Deposit PPD Direct Pay Inserted by Operator Effective Entry Date the ACH Operator will use the content of this field to determine if an Entry should be processed as same-day, regardless of the content of other fields 16

17 Examples of portion (positions 21-78) of Company/Batch Header Records sent on October 25, 2016 using optional indicators Company Discretionary Data Company Identification SEC Company Entry Description Company Descriptive Date Effective Entry Date Settlement date (Julian) Direct Deposit PPD Direct Pay SD Inserted by Operator SD Direct Deposit PPD Direct Pay Inserted by Operator 1 - Company Descriptive Date an ODFI may choose to use this field with their Originators to include an optional indicator for Same-Day Entries. If the optional indicator is used, this field should include either SD1300 (for Entries the Originator would like to settle at 1:00 PM ET) or SD1700 (for Entries the Originator would like to settle at 5:00 PM ET). The content of this field will not be reviewed by the ACH Operator. 2 - Company Discretionary Data ODFIs have the option to use specific codes in this field to designate specific processing instructions. An ODFI may decide with its Originator to include a code in this field to indicate intent for same-day processing. In this example an SD is include to indicate same-day processing, but this content would be solely at the discretion of the ODFI and Originator. The content of this field will not be reviewed by the ACH Operator. 17

18 Making Same Day ACH Work for You 18

19 What topics must be discussed between FIs and their Originators? Use of Effective Entry Date and other optional fields if applicable File delivery deadlines Fees Notices NOCs Returns Reversals 19

20 Making Same Day ACH Work for You 20

21 Prenotification Entries and NOCs (Scenario 1) March 2016 Sunday Monday Tuesday Wednesday Thursday Friday Saturday Prenote Sent (ODFI) Prenote Settles (RDFI) NOC Sent (RDFI) ODFI Receives NOC Originator may send live dollar Entry if correction made

22 Prenotification Entries and NOCs (Scenario 2) March 2016 Sunday Monday Tuesday Wednesday Thursday Friday Saturday 1 2 Prenote Sent (ODFI) 3 Prenote Settles (RDFI) 4 5 NOC Sent (RDFI) 6 ODFI Receives NOC; Originator may send live dollar Entry ODFI required to deliver NOC information to Originator Originator must make correction

23 Prenotification Payroll customer sends Same Day ACH Prenotification Monday Settles Monday RDFI Return/NOC Same Day Monday Return/NOC Same Day Tuesday Return/NOC Wednesday This example shows that a business could have a new hire s account validated and be able to send live Entry for payroll within a week 23

24 Prenotification Entries - Same Day March 2016 Sunday Monday Tuesday Wednesday Thursday Friday Saturday Prenote Sent SD (ODFI) Prenote Settles (RDFI) Originator may send live dollar Entry if correction made NOC Sent SD (RDFI) ODFI Receives NOC SD 24

25 Prenotification Entries - Next Day Settlement, Same Day NOC March 2016 Sunday Monday Tuesday Wednesday Thursday Friday Saturday Prenote Sent (ODFI) Prenote Settles (RDFI) NOC Sent (RDFI) SD ODFI Receives NOC Originator may send live dollar Entry if correction made 25 25

26 Returns The Return timeframe as it exists now in the NACHA Operating Rules will not change! However, Same Day enables the RDFI to process Returns right away on Settlement Date at its discretion Regardless of whether the forward Entry was a Same Day transaction or not Transaction limit and IAT restrictions do not apply to returns 26

27 Returns RDFI receives a ACH Debit to a closed account today for the amount of $250,000 RDFI will have the possibility to Return the debit within the same day of settlement Next day and Same Day Return windows Effective Entry Date is today, will go as Same Day Return 10:30 a.m.et (1030 ET) 2:45 p.m. ET (1445 ET) 4 p.m. ET (1600 ET) Would not go as Same Day Return 8 p.m. ET (2000 ET) 2:15 a.m. ET (0215 ET) 27

28 Erroneous File/Entry Sent in Error Examples Payroll File sent in error Payroll Entry sent in error Corporate Account Take Over With Same Day ACH allowing Same Day Returns right in phase 1 this will help the ODFI/Originator s efforts in trying to recoup the funds sent in error Few days to resolve these issues 28

29 Terminated employee Some States require that if employment is terminated, the employee must be paid the day of termination Same Day ACH will allow for companies that are required to provide payment on termination date to send a Same Day ACH Entry to ensure compliance and reducing cost and time 29

30 Just in-time inventory Issues with EDI Direct communication Same transmission speed Phone lines available Compatible computer hardware With the introduction of Same Day ACH, Just intime inventory could see a shift from Wires to financial EDI utilizing the ACH Network 30

31 Just in-time inventory How can the ACH Network help? Same Day ACH will allow companies to move information and money same day at a lower cost of a wire Value-Added Networks Examples Manufacturing Retail U.S. auto manufacturers VAN provides a very flexible computer interface, it can talk to virtually any type of computer 31

32 Can you benefit from Same Day ACH? If so, ensure you communicate with your FI to see if this option will be available to you If you are an FI, do you have customers or members asking for this? Regardless, be prepared for money to move faster starting on September 23 rd of this year Ensure reporting of incoming Entries and exceptions is available, even if you elected not to participate in Same Day 32

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34 AAP Continuing Education Credits Session today Making Same Day ACH Work for You earns 1.2 AAP - CE (Continuing Education) Credits Topic Area Rules & Regulations Date Conducted April 26, 2016 Conducted by: UMACHA (Upper Midwest Automated Clearing House Association) 34