Same-day processing for both credits and debits on the automated clearing house network finished its first full quarter on Dec. 31, and numbers released Thursday show a solid increase in volume and dollars. In particular, same-day debits, introduced Sept. 15 , are growing fast and finished the final quarter accounting for nearly half of all same-day transactions.
All told, financial institutions handled 75.1 million same-day credits and debits in 2017, of which 18.3 million were debits, according to the numbers released by NACHA, the Herndon, Va.-based governing body for the ACH. Same-day dollars processed totaled $87.1 billion in value, with $72.5 billion stemming from credits and the balance from debits.
While that dollar volume is a “small fraction” of the total value processed on the ACH last year, it represents “an impressive start for a new ACH product,” says Sarah Grotta, a research analyst at Mercator Advisory Group who follows the ACH.
For the fourth quarter, total same-day transactions came to 35.2 million, up 138% over the 14.8 million recorded in the third quarter. In particular, December recorded a 50% jump over November, notching 15.2 million transactions.
NACHA did not report dollar value by quarter, but in terms of transactions, debit volume is increasing rapidly. Available for only 15 days in the third quarter, same-day debits totaled 2 million, or an average of 133,000 a day. In the fourth quarter, volume totaled 16.4 million, or 178,000 per day, a 34% increase in daily volume. Indeed, for the year’s final quarter alone, same-day debits accounted for nearly 47% of total same-day traffic.
“We are…pleasantly surprised by the initial adoption of same-day ACH debits,” Michael Herd, senior vice president for ACH network administration at NACHA, tells Digital Transactions News by email. “We didn’t expect this amount of same-day ACH debit volume in the first quarter of availability. It is gratifying to see this level of industry adoption.”
For same-day processing as a whole, “the steep increase from November to December is reflective of financial institutions’ promotion of same-day ACH, greater awareness and adoption by users, and, most likely, an increase in the number of financial institutions launching same-day ACH origination,” Grotta says.
Grotta adds that same-day processing appears to be smooth sailing so far for the nation’s banks, nearly all of which link to the ACH network. “To date, I haven’t heard of any major glitches or significant fraud concerns with same-day ACH,” she says.
Herd echoes that assessment. “We haven’t heard of any significant processing problems,” he says. “We think that allowing the industry to gain experience for a year with same-day ACH credits has paid off.”
Consumer bill payments accounted for the bulk of same-day debits in 2017, at 92% of transactions and 84% of dollars. Business-to-business payments made up the balance. On the credit side, payroll direct deposit was the largest application by transactions, with a 47% share, but same-day business-to-business payments accounted for the most dollars, with a 49% share.
Under NACHA’s plan to speed processing of ACH transactions, same-day credits were introduced a full year earlier than debits. As the name implies, same-day processing requires clearing and settlement of transactions on the same day they are initiated, within certain processing windows. Ordinary ACH transactions do not clear and settle until the next day.
With credits, payers push payments from their accounts to those of their recipients. With debits, payees pull payments, with authorization, from payers’ accounts. Same-day processing is required of receiving financial institutions, but is optional for originating institutions.