By: Mariah Young,

Same Day ACH credit transfers are officially live in the United States thanks to NACHA.

Just before Same Day went live for banks, Dwolla announced our Same Day ACH pilot program, and hundreds of businesses reached out, eager for faster payments and Same Day ACH functionality.

If you’re just hearing of Same Day ACH for the first time, you’re in the right place. In this blog post we’ll cover everything you need to know about Same Day ACH and point you in the right direction for valuable resources.

The Players Involved

Before we dive into the details of Same Day ACH, it’s important to have a handle on the players involved in the ACH system. First you have NACHA, mentioned above. NACHA is the regulatory body governing the ACH network. Second you have ODFIs and RDFIs. An ODFI (Originating Depository Financial Institution) is the institution in which the ACH transaction starts or originates from. Then you have an RDFI (Receiving Depository Financial Institution), which is the institution that receives the ACH transaction. Both the RDFI and ODFI are banking or financial institutions.

Finally, you have third-party platforms, like Dwolla, that make using the ACH network far more simple and straightforward. Think of Dwolla as an easy on-ramp to the ACH network. We provide a few API endpoints that you can integrate inside of your own platform in order to facilitate ACH transactions. We tie the transaction and user data generated via the API together within a beautiful and easy to understand interface—our Dashboard and Admin.

What is Same Day ACH?

The Automated Clearing House (ACH) is the network connecting banks and credit unions in the United States. Think for a minute about your direct deposited paycheck; this paycheck makes it’s way to your bank account via the ACH network.

In the past, with standard ACH, transactions took 2-4 business days due to processing hurdles and protocols to ensure funds are where people think they are. Here’s a full guide to understanding ACH transactions.

Now, with Same Day ACH, NACHA—the “manager” of the ACH network—has adopted a new rule allowing for ACH payments to be processed within 1 business day (rather than the next day or day after). Same Day ACH creates a new ACH entry type for banks and providers so that they can distinguish Same Day payments, and will eventually add two additional “windows” for processing the payments file. The complete set of rules will be rolled out in three phases.

The Phases of Same Day ACH

Same Day ACH will be rolled out in three phases so banks and other providers can be prepared for changes and adjustments.

Same Day ACH Phase 1: This phase has already started, providing the ability to receive and process same day credits to bank accounts.

Same Day ACH Phase 2: This phase is coming in September of 2017, and will enable the ability to receive and process same day credits and debits.

Same Day ACH Phase 3: In March of 2018, the third and final phase will roll out, in which banks are called to make eligible Same Day ACH funds sent before the cutoff window by the end of the business day.

Read the full explanation of Same Day ACH and the phases of its rollout.

How to Access Same Day ACH—a pilot program

Dwolla is offering a Same Day ACH pilot program, which will provide platforms advanced access to Same Day ACH, allowing members of the pilot to initiate credit transfers via our White Label API and provide faster funds availability to users.

This pilot program will offer fast, seamless, cost-effective, and programmable payments between bank accounts. Since Same Day ACH only currently supports credits (funds initiated from the sender to the receiver), businesses sending mass payouts would really benefit most from the pilot program—think payout platforms, gig/sharing economy providers, marketplaces, payroll companies, etc.

Initially, our Same Day ACH pilot program is for White Label partners only, but please reach out if you’re interested so we can prioritize appropriately.

Read here for more information on Dwolla’s announcement of the pilot program.

Benefits of Same Day ACH

We believe there is true power in moving money faster within the United States–everything is faster today, and payments should be no different. When considering faster ACH payments, we broke the benefits down into three buckets—businesses, consumers and financial institutions.

Benefits of Same Day ACH for Businesses: Same Day allows treasurers and those managing the books to focus on certainty of payments and efficiency savings with more responsive accounts payable and accounts receivable. Additionally, businesses will get improved flexibility and control over their payroll; if there’s a payroll mistake, you’re able to correct that mistake more efficiently rather than wait for transactions to clear. As mentioned above, payouts for those operating within the “gig” economy will be faster and all businesses will benefit from improved consistency in funds flow.

Benefits of Same Day ACH for Consumers: For the average consumer, payments are something you don’t really think about until you don’t get paid on time. Same Day ACH can alleviate this headache. For example, emergency payments become quicker and you can pay your bill in the last minute should you forget. Finally, if the businesses you interact with every day utilize Same Day ACH, then you only stand to benefit.

Benefits of Same Day ACH for Financial Institutions: With Same Day for banks, new or improved devices will drive revenue opportunities for originating financial institutions to compensate themselves. Additionally, their customers will be happier—plain and simple. Sending faster payments and getting access to their money more quickly makes people happier.

If you’re interested in Same Day ACH or want to learn more about how the ACH network can empower new businesses efficiencies, just reach out. We have a team of experts here at Dwolla who talk about ACH day in and day out. They’d be happy to help.

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Financial institutions play an important role in the Dwolla network.

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.