vice president of education and compliance

Your Journey

Our Guidance

Presented by:

Jen Wasmund, AAP, NCP

Vice President of Education and Compliance

Jordan Morell, AAP, NCP

Associate Director of Education Services

Your Journey

Our Guidance

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 © UMACHA 2016; All rights reserved.

Your Journey

Our Guidance

Same Day ◦ Overview

◦ Identifying Same Day Entries

◦ Communicating

◦ Use Cases

© UMACHA 2016; All rights reserved. 3

Your Journey

Our Guidance

Making Same Day ACH Work for You


Your Journey

Our Guidance

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



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.

Your Journey

Our Guidance

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


Your Journey

Our Guidance

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


Your Journey

Our Guidance

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, 2016


Your Journey

Our Guidance

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


Your Journey

Our Guidance

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


Your Journey

Our Guidance

Same Day ACH for ODFIs


Your Journey

Our Guidance

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


Your Journey

Our Guidance

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)

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

Effective Entry Date YYMMDD Batch Header record

(required)

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

Settlement Date 3 digit Julian numeric

Batch Header record

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


Your Journey

Our Guidance

14

Handling of Effective Entry Dates (EED)

© UMACHA 2016; All rights reserved.

Today’s date: Oct. 25, 2016

Batch EED:

161025

Batch submitted

by 10:30 AM ET

Batch settled 10/25/16, 1:00 PM ET

Same-Day Entry Fee charged

Batch submitted

by 2:45 PM ET



Batch submitted

after 2:45 PM ET

Batch settled 10/26/16, 8:30 AM ET

No Same-Day Entry Fee charged

Your Journey

Our Guidance

15

Handling of Stale/Invalid EED


Today’s date:

Oct. 25, 2016

Batch EED:

161024 (stale)

Batch submitted

by 10:30 AM ET



Batch submitted

by 2:45 PM ET



Batch submitted

after 2:45 PM ET

Batch settled 10/26/16, 8:30 AM ET

No Same-Day Entry Fee charged Note: stale date means a date that is

in the past

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

Your Journey

Our Guidance

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 9111111119 PPD Direct Pay 161025 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

Your Journey

Our Guidance

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 9111111119 PPD Direct Pay SD1300 1 161025 Inserted by Operator

SD Direct Deposit 2

9111111119 PPD Direct Pay 161025 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.

Your Journey

Our Guidance



Your Journey

Our Guidance

Use of Effective Entry Date

and other optional fields if

applicable

File delivery deadlines

Fees

Notices

◦ NOCs

◦ Returns

Reversals

19

What topics must be discussed between FIs and their Originators?


Your Journey

Our Guidance



Your Journey

Our Guidance

March 2016

Sunday Monday Tuesday Wednesday Thursday Friday Saturday

1 2

Prenote Sent

(ODFI)

3

Prenote Settles

(RDFI)

4

NOC Sent

(RDFI)

5

ODFI Receives

NOC

6

Originator may

send live dollar

Entry if correction

made

7

8 9 10 11 12 13 14

15 16 17 18 19 20 21

22 23 24 25 26 27 28

29 30 31

Prenotification Entries and NOCs (Scenario 1)

21 © UMACHA 2016; All rights reserved. 21

Your Journey

Our Guidance

Prenotification Entries and NOCs (Scenario 2)

March 2016


1 2

Prenote Sent

(ODFI)

3

Prenote Settles

(RDFI)

4

5

NOC Sent

(RDFI)

6

ODFI Receives NOC;

Originator may send

live dollar Entry

7

8 9 10

ODFI required to

deliver NOC

information to

Originator

11 12 13 14

15 16 17 18

Originator must

make

correction

19 20 21

22 23 24 25 26 27 28

29 30 31


Your Journey

Our Guidance

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

Prenotification


Your Journey

Our Guidance

March 2016


1 2

Prenote Sent SD

(ODFI)

Prenote Settles

(RDFI)

NOC Sent SD

(RDFI)

ODFI Receives

NOC SD

3

Originator may

send live dollar

Entry if correction

made

4

5

6

7

Prenotification Entries - Same Day


Your Journey

Our Guidance

March 2016


1 2

Prenote Sent

(ODFI)

3

Prenote Settles

(RDFI)

NOC Sent

(RDFI) SD

ODFI Receives

NOC

4

Originator may

send live dollar

Entry if correction

made

5

6

7

Prenotification Entries - Next Day Settlement, Same Day NOC

25 © UMACHA 2016; All rights reserved. 25

Your Journey

Our Guidance

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

Returns


Your Journey

Our Guidance

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

Returns


Your Journey

Our Guidance

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

Erroneous File/Entry Sent in Error


Your Journey

Our Guidance

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

Terminated employee


Your Journey

Our Guidance

Issues with EDI

◦ Direct communication

◦ Same transmission speed

◦ Phone lines available

◦ Compatible computer

hardware

With the introduction of

Same Day ACH, Just in-

time inventory could see a

shift from Wires to financial

EDI utilizing the ACH

Network

30

Just in-time inventory


Your Journey

Our Guidance

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

VAN provides a very flexible

computer interface, it can talk

to virtually any type of

computer

Examples

◦ Manufacturing

◦ Retail

◦ U.S. auto manufacturers

31

Just in-time inventory


Your Journey

Our Guidance

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 23rd of this year

Ensure reporting of incoming Entries and

exceptions is available, even if you elected

not to participate in Same Day


Your Journey

Our Guidance


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Your Journey

Our Guidance

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)


vice president of education and compliance

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