Looking to Serve Bigger Payments, Nacha Sets a $1 Million Same-Day Limit for March 2022

Nacha on Monday announced it will raise its dollar limit on same-day transactions 10-fold to $1 million starting next March. The move, which will come only two years after the governing body for the automated clearing house network raised the cap to $100,000 from the original $25,000 limit, comes as banks and service providers look for faster processing of payroll, insurance payouts, and other large disbursements.

The latest change to Nacha’s same-day processing routine will embrace both credits and debit and will apply to consumer as well as business payments, the network said. It comes after members of the network recently gave a thumbs-up to the measure, Nacha said in its announcement. “Dollar limit increases for same-day ACH have been the single most-requested change,” says Mike Herd, a senior vice president at Nacha.

The decision should unlock significant new volume for same-day processing, Herd says. “The ACH community sees additional use cases with higher dollar limits,” he adds. “It allows more users to adopt [same-day processing]. They’ve been reluctant to adopt it if a portion of their payments wasn’t covered.” Same-day credits and debits totaled 96.7 million in the fourth quarter, up 36% from the fourth quarter of 2019 and following the last move, in March 2020, to raise the limit, according to Nacha statistics.

The latest, dramatic rise in the dollar cap followed detailed talks among Nacha and its members, Herd says. “There were discussions of what the correct limit should be,” he notes. “You don’t want to be too low and you have to be cautious about being too high.” The latest increase “is a big step, and it’s exciting,” he says. The lead time allowed before the change takes effect should give financial institutions and users time to adjust their coding and conduct testing routines, Herd adds.

“Nacha has made a significant enhancement to same-day ACH every year since it was introduced in 2016,” said Nacha president and chief executive Jane Larimer, in a statement. “This [latest] enhancement reflects our commitment to see that the modern ACH network meets the nation’s needs for fast and efficient payments.”

Nacha introduced same-day credits in 2016, with debits following suit a year later. Traditionally, ACH transactions follow a two-day settlement routine. Shortly after the service began, banks and service providers started requesting higher transaction caps.

The decision to raise the limit follows other moves Nacha has made recently to facilitate same-day ACH. Last month, the network added a new settlement window at the end of the processing day to extend the time in which banks can handle same-day items. As a result, the latest daily deadline for same-day ACH has moved to 4:45 p.m. Eastern Time, two hours later than the former cut-off. The move in part was a response to banks in the Western time zone that now have more leeway to enter same-day volume. “The further you move West, it captures a greater part of their business day,” says Herd.