What's next in faster payments? It's a question that's on all of our minds. While no one knows for sure, the developments and events below offer a snapshot into the world of faster payments and the path that lies ahead.
NACHA-The Electronic Payments Association
NACHA'S voting membership approved three new rules expanding the capabilities of Same Day ACH (SDA) for financial institutions and their customers. The first allows financial institutions to submit SDA transactions to the ACH Network for an additional two hours each business day through the creation of a new processing window. The second increases SDA per-transaction dollar limit to $100,000. The third increases the speed of funds availability for certain SDA and next-day ACH credits.
"NACHA continues to expand ACH Network offerings to make it easier to use the ACH," commented NACHA's chief operating officer Jane Larimer in a recent news release. "With these enhancements to Same Day ACH, the ACH Network will have a comprehensive set of faster payments capabilities available to all financial institutions and their customers.
"The faster funds availability will go into effect on Sept. 20, 2019; the increase in per-transaction dollar limit will become effective on March 20, 2020; and the Same Day ACH processing window with expanded hours will go into effect on Sept. 18, 2020.
According to transaction data, Same Day ACH is thriving with nearly 41 million Same Day ACH transactions in Q2 2018, an increase of 243 percent over Q2 2017. Businesses, financial institutions, and consumers will all benefit from expanding Same Day ACH capabilities.
The Federal Reserve
The Federal Reserve Invites Public Comment on Real-Time Settlement
The Federal Reserve is currently inviting public comment on actions they could take to support faster payments in the United States. The potential actions would facilitate real-time interbank settlement for faster payments and build on collaborative work with the payments industry through the Federal Reserve System's Strategies for Improving the U.S. Payment System (SIMS) initiative.
The following two potential actions may support the further development of faster payments in the U.S. while increasing the resiliency and security of services offered to the public: 1) developing a service for real-time interbank settlement of faster payments 24 hours a day, seven days a week, 365 days a year (24x7x365), and 2) creating a liquidity management tool that would enable transfers between Federal Reserve accounts on a 24x7x365 basis to support services for real-time interbank settlement of faster payments, regardless of whether those services are provided by the public sector of the Federal Reserve Banks.
To learn more, visit the Fed website.
The Federal Reserve's FedPayments Improvement Community Forum
Concerning the Federal Reserve and its march toward faster payments ubiquity by 2020, new developments continue to unfold. The inaugural FedPayments Improvement Community Forum convenes Oct. 3-4, 2018 in downtown Chicago. According to their website:
The Forum provides an opportunity to collaborate and provide feedback on the latest payment system improvement initiatives. Designed to encourage robust dialogue on a plethora of topics, the Forum will consist of workshop-style sessions that offer the ability to influence and guide the United States' journey toward a faster, safer, more efficient payment system.
An afternoon session on day two features members of the Governance Framework Formation Team (GFFT) who will provide a preview of their work on the formation of The U.S. Faster Payments Council (FPC). As you may recall from last month, the GFFT released its report summarizing the findings from a survey of industry stakeholders on the draft Operating Vision for the proposed U.S. Faster Payments Council (FPC).
Watch for live updates at the event via the FedPayments Improvement social media channels.
Innovation remains a hot topic across the industry, and NEACH stands front and center, cultivating conversations and facilitating collaboration across the industry.
Toward that end, NEACH is hosting a new event, Innovating Payments 2018, which will launch Nov. 14, 2018, in Providence, Rhode Island. Innovating Payments is the only event focused exclusively on encouraging payments innovation at community banks and credit unions.
"For many community banks and credit unions, the biggest near-term threat to your business may not come from FinTechs, but from traditional competitors better leveraging those Fintechs," explains Joe Casali, AAP, NCP, senior vice president at NEACH.
NEACH believes that by partnering with and learning from entrepreneurial experts, credit unions and community banks have a unique opportunity to get ahead of the next wave of products, services, and trends in the industry. Innovating Payments is where that can happen.
For more on these developments and other breaking news in the world of faster payments, visit NEACH's Pacing Payments website.