OMG: Same Day ACH

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same day achComing soon, the ability to ACH funds same-day will finally exist. The change will be a boon to tech-based lenders that have become famous (or infamous) for their ability to approve and issue loans quickly. No matter how fast the systems have become however, the ACH network has continued to slow the process down.

Next-day funding has long made borrowers skeptical about the online lenders they apply to and many applicants become anxious when they hear that the funds will be in their account tomorrow rather than today, after the deal has been closed.

Speaking from my own experience, there was almost nothing worse than telling a merchant that the funds had gone out and would be in their account the next day because they would disregard the last part of that statement and check their bank accounts immediately and of course would not see those funds. They’d immediately reach back out to me or the underwriter and say that they had been deceived because no money was there. This scenario played out on at least half of all the deals I ever worked on and it was awful.

And I’d remind them, “It’s an ACH. It’s overnight. It should be there in the morning depending on your bank. If for whatever reason it isn’t, give me a call.”

Even after repeating myself, I’d often get an email later that day at 6 pm (bank closing time) to say that they were at the bank and the teller has just told them that they don’t see any incoming wires.

So many merchants just could not believe that a tech-based funding company could not make the money appear instantly in their account and every passing second caused them more anxiety and fear that they had been tricked.

Enter Same Day ACH, which is slated to launch in September 2016. According to the National Automated Clearing House Association (NACHA), who governs the ACH network, there will be two settlement times.

A morning submission deadline at 10:30 AM ET, with settlement occurring at 1:00 PM.
An afternoon submission deadline at 3:00 PM ET, with settlement occurring at 5:00 PM.

Virtually all types of ACH payments, including both credits and debits, would be eligible for same-day processing, according to their announcement.

The industry can’t get Same Day ACH fast enough!

And if you thought you were excited about ACHing, just watch the below video produced by NACHA about how awesome their network is.

Last modified: September 25, 2015
Sean Murray

Category: banking, merchant cash advance, p2p lending, payments

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