Following the increase of the Same Day ACH dollar limit to $1 million in March 2022, Nacha and the ACH Operators - the Federal Reserve and The Clearing House - have completed the latest phase in the acceleration of ACH payments with the implementation of “Late Night ACH.”
Implemented in mid-September 2022, the Federal Reserve and The Clearing House now deliver late night ACH files to all receiving financial institutions in the ACH Network by 11:30 p.m. Eastern Time on business days, accelerating the delivery of ACH payments that otherwise would be received on the next business morning.
“This service enhancement was implemented in response to ACH industry participant requests,” said Michael Herd, Senior Vice President of ACH Network Administration, Nacha. “Receiving institutions can use this accelerated payment information to better reflect customer account balances for pending payment activity. This can be especially impactful on Friday nights in advance of a weekend or even a holiday weekend.”
Through the first seven weeks of service, late night file delivery accelerated tens of millions of ACH payments each week. Nacha estimates an average of nearly 10 million ACH payments per day were delivered in these new files on Monday through Thursday. The average volume was significantly larger on Friday nights, with Nacha estimating an average of more than 50 million ACH payments per Friday.
“These additional file deliveries will aid financial institutions in having a more accurate picture of their clients’ upcoming ACH activity, allowing them more flexibility in processing future transactions. This is a great step forward, and reinforces the power of the modern ACH network,” said Jason Carone, Senior Vice President, ACH/EPN Product Management, The Clearing House.
“It is great to see Nacha and the ACH Operators once again joining together to bring advancements in the ACH Network with the additional late night ACH file delivery, generating efficiencies for network participants and opportunities to meet end user needs,” said Tony Stallings, Senior Vice President of Customer Service Operations, Federal Reserve Financial Services.
The Federal Reserve began Monday-Friday late night file delivery on Monday, Sept. 12, 2022. The Clearing House began Friday late night delivery on Sept. 16, 2022, supplementing its existing Sunday-Thursday late night file delivery. The result is that all financial institutions in the ACH Network now have these late night files on every business day.
The new service enhancement provides additional ACH file distributions to receiving institutions but does not change ACH settlement times or receiving institution processing requirements. Receiving institutions at their option may process these files when received to better reflect customer account balances over a full-day cycle or a weekend. For example, a receiving institution could show by Saturday morning pending credits and debits to a customer’s account that are received on Friday night, allowing the customer to have better knowledge of what their account balance will be at the opening of business on Monday morning.
The late night files contain all ACH credit and debit payments and returns that the ACH Operators have received since the previous transmission deadline. These files do not include Same Day ACH payments, as the three daily Same Day ACH file distributions are completed before the new late night files are generated. ACH payments in the files settle on the morning of the date indicated in the file.