There has been a lot of talk around Same Day ACH, but will your business benefit from this new functionality? Firstly, it depends upon the cost imposed by your financial institution for access to the functionality—which may vary from bank to bank. Secondly, it depends on your use case.
For businesses, there will be certain use cases that are more appealing to the use of Same Day ACH over others. In the case of receiving funds from other businesses and individuals, companies will be able to quickly convert funds received to working capital. In the case of payroll, treasurers can focus on the certainty of payments by removing paper checks from the equation and converting more of their disbursements to electronic transfers.
An example of a person-to-business payment utilization of Same Day ACH would be a utility company wanting to collect payment more quickly, or to give the payer a chance to send payment Same-Day and not miss a deadline.
A couple more tangible examples of a business needing to send payment to a person Same Day could be in disaster relief efforts (insurers or the Red Cross needing to send relief as quickly as possible to an affected party) or needing to payout a terminated employee at the end of the day. According to Treasury and Risk, there are some states that mandate a terminated employee must be paid in full what is owed to them on the day they are terminated, which would allow an accounting department to simply calculate time worked and initiate the payment via Same Day ACH. Those are just a few specific examples.
With Same Day ACH, if there were to be an issue with processing payroll files, which unfortunately happens, companies would now have the ability to remedy the situation by correcting the file and getting it out on the same business day.
While there are obvious pros to specific business use cases, the financial pros appear to skew heavily in favor of the financial institutions. The pros for personal users, as it is for businesses, is to simply be able to complete an action (sending or receiving money) more quickly—which is something that we’re already conditioned to as consumers—paying for speed and service.
If your business is looking for an easy-to-use on-ramp to the ACH network, and want to work with a thought leader in the network, reach out to one of our integration specialists to learn more.
Dwolla, Inc. is an agent of Veridian Credit Union and Compass Bank and all funds associated with your account in the Dwolla network are held in pooled accounts at Veridian Credit Union and Compass Bank. These funds are not eligible for individual insurance, including FDIC insurance and may not be eligible for share insurance by the National Credit Union Share Insurance Fund. Dwolla, Inc. is the operator of a software platform that communicates user instructions for funds transfers to Veridian Credit Union and Compass Bank.