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Same-Day ACH: Bridging the Gap between ACH and Instant

Adriane Torres, Payments Partnership Manager, Cross River

February 2, 2024

3 min read

Instant payments are all the rage today, but a notable payments development occurred long before we, as an industry, pedestaled “instant”. Same-day ACH, an often-overlooked payment rail, has been enabling fast money movement since 2016.

A case for ubiquity Same-day ACH is the bridge between traditionally utilized and newer payment modalities for customers, enabling ubiquitous access to fast payment transactions – all US FI’s must receive incoming ACH payments whereas not all are enabled for RTP® or FedNow®. Through a low resource and economic code switch, fintechs or banks can modify payment processing to originate same-day ACH to s entries in addition to standard ones. While end users may not benefit from “instant” settlement, the same-day ACH enhancement provides faster fund availability than standard ACH, offering more end users with a competitive experience.

Will ACH become archaic soon? Thoughts from an AAP. If a consumer has the option of receiving money in their bank account in just a few seconds or wait 1-2 business days, they’ll undoubtedly choose instant. We’re in an era of instant gratification – fast food isn’t even fast enough for us anymore. We have apps to order our meals in advance, reducing our wait time from hours to minutes and minutes to seconds. With everything so instant, do legacy rails like ACH still stand a chance?

The short answer: I love the faster payments ecosystem and look forward to increasing adoption rates for instant payment rails, but as an AAP, I continue to see value in the world of ACH.

Some key differences that create a case for same-day ACH include:

  • NACHA operates on a batching system, a settlement feature especially useful for recurring payments.

  • ACH Network allows ACH recalls and provides clear “Return Reason” codes.

  • Instant payments offer limited use cases for debit processing and are currently only available on the RTP Network. RfPs are still in their infancy.

  • RTP® and FedNow® have per entry dollar amount restrictions, standard ACH does not. Same-day ACH is enabled to match the $1M transaction limit that RTP® offers.

  • ACH at large is more cost effective than instant payments.

  • Same-day ACH ensures payment receipt within the same business day-- not instant, still fast.

A (light-hearted) decision-making framework for payment rails With more transaction options than ever, fintechs may benefit from viewing different payment offerings like different flavors of ice cream, each fantastic and serving a unique purpose.

Ultimately, for entities looking to assess the instant bank rails market before making long term decisions or for those waiting for the right tech teams to be set in place, enhancing existing ACH processing to same-day ACH can provide customer the best of all worlds and offer immediate benefits. And when the time is right to serve more ice cream, relying on a single banking partner to explore multi-rail processing can set execution plans up for success.

With Cross River’s full suite of payment solutions on both the bank and card rails, partners can truly plug-and-play depending on their needs for a particular use case or independent payment processing.

Learn more about Cross River’s full payment services here.