Same Day ACH for Senior Management and Your Board

Transcription

1 Same Day ACH for Senior Management and Your Board Presented by Michael Jeffcoat, AAP NCP Manager, Payments Education 2017

2 Audio Handouts Questions

3 SAME DAY ACH WHAT SENIOR MANAGEMENT & THE BOARD NEEDS TO KNOW Michael Jeffcoat, AAP, NCP Manager Payments Education

4 About epayresources q Not-for-profit Regional Payments Association q Educational Programs & Payments Publications q Member Benefits Voice & Representation in National Rule Making and Regulatory Process Payments Answerline Toll-Free Phone Support Discounts on Seminars, Publications, and Conferences q 20 ACH Accredited Professionals (AAP) q 4 National Check Payments Professionals (NCP) q 3 Certified NCP Instructors q 1 Certified Cash Manager Professional (CCM) q 2 Certified Internal Auditor (CIA) q 2 Certified Information Systems Auditor (CISA) q 1 Certified Financial Services Auditor (CFSA) 4

5 Disclaimer q This presentation and applicable materials are intended for general education purposes and nothing in this presentation should be considered to be legal, accounting or tax advice q You should contact your own attorney, accountant or tax professional with any specific questions you might have related to this presentation that are of a legal, accounting or tax nature q Image source: Thinkstock 5

6 Before We Begin q Many of the words that are capitalized (Entry, Receiver, Check, etc ) can be found in Article Eight of the 2017 NACHA Operating Rules & Guidelines q Article Eight provides a definition of each of the capitalized words 6

7 Agenda 7

8 Same Day ACH for the ODFI and RDFI q Same Day ACH is OPTIONAL for an ODFI q Same Day ACH is MANDATORY for a RDFI 25

9 Phased Approach to Same Day ACH Functionality Phase 1 Sept. 23, 2016 Phase 2 Sept. 15, 2017 Transaction Eligibility ($25,000 limit; IAT not eligible) Phase 3 March 16, 2018 Credits only Credits and Debits Credits and Debits New Same Day ACH ODFI Processing Deadlines 10:30 a.m. ET and 2:45 p.m. ET 10:30 a.m. ET and 2:45 p.m. ET 10:30 a.m. ET and 2:45 p.m. ET New Settlement Times 1:00 p.m. ET and 5:00 p.m. ET 1:00 p.m. ET and 5:00 p.m. ET 1:00 p.m. ET and 5:00 p.m. ET ACH Credit Funds Availability End of RDFI s processing day End of RDFI s processing day 5:00 p.m. RDFI local time End of Processing Day = The time in which an organization ceases their daily processes 9

10 High-Level Decisions

11 Strategic Planning q Will the organization offer the product? Same Day ACH Already available in every U.S. financial institution Zelle (Early Warning Systems) Already leverages connections between largest institutions, i.e., financial institutions and processors Industry experts see Zelle as the system of choice for P2P Real-time Payments (The Clearing House) Expected to process 8 billion transactions by

12 Every Strategy Involves a Cost Implementation q Infrastructure enhancements q Staff changes, education q Millennials: attracting and retaining q Unintended SDA debit = Unauthorized debit No or Wait q Loss of account holders q Loss of Originators 12

13 Opportunities Same Day ACH q The only faster-payments product to which all U.S. financial institutions currently have access q ACH transactions represent a payment option that financial institutions are already familiar with q Infrastructure to receive already in place Can be leveraged into origination 13

14 Risk Mitigation q Initiation of late-day debits introduces liquidity risk q Intra-day debit may require some amount of automated services to enhance monitoring of fraud q Consider: integration of new technology and security may not be avoidable q Offset transaction may create float 14

15 Cost Considerations q Staffing q Technology q Risk monitoring q Education, training q Documentation changes q SDA fee q Ongoing maintenance or updates 15

16 Product Offering q Know Your Customer q Transaction monitoring remains paramount High-risk partners q Fee structure q Restructuring q Managing reputation risk 16

17 Float q Debit transactions all <= $25,000, eligible for Same Day ACH q Credit offset exceeds $25,000 threshold for SDA eligibility q Does your software allow for a transaction other than ACH? q Does your agreement? 17

18 Reputation q NSF concerns q Unauthorized due to early debit q Positive Pay 18

19 Same-Day Entry Fee q Same Day Entry fee is 5.2 cents for each same-day transaction q ODFIs will be charged a Same Day Entry Fee via their ACH Operator(s) for each forward Same Day ACH Entry they originate q Will you charge your Originators for this premium service? 19

20 Is Same Day ACH for Me? (ODFI) q Origination of Same Day ACH Entries is optional, should we offer Same Day ACH to our customers? q How can we avoid unintentional Same Day ACH Entries? q What procedures do we need to handle time frames and commitments? q How will our systems and software be affected? 20

21 Is Same Day ACH for Me? (Originator) q Review use cases for potential opportunities q Talk to your financial institution to determine if Same Day is appropriate and cost effective File requirements New file submission cut-off times Exception resolution cut-off times Eligible items q Review current usage of Effective Entry Date and other date fields in file 21

22 Don t Wait, Prepare Now q Knowledge is Power! q What resources are available to help move us forward? q Have stakeholders and implementation team members been identified and organized? Assign Executive / Senior Manager Project Sponsor Assign Project Manager / Team Lead to manage the implementation and changes identified by Board q Schedule Project Team Meetings? 22

23 Continued Preparation q Complete Implementation Checklist q Assess current processes and workflows Identify System changes Process changes Client / customer impacts q Identify Project Tasks Testing details Implementation timelines 23

24 Post Implementation q Project Survey How well did we do? How could we have done better? q Consolidate / store project documentation q Report success to stakeholders 24

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26 ODFI Operational Questions to Consider q Should we offer Same Day ACH debit (or other new product)? q Should we offer Same Day ACH to everyone or to select Originators? q What procedures do we need to handle time frames and commitments? q How is processing in-house versus processor (outsourced) affected? Especially for offset transaction q How can we work with our vendor to ensure we avoid unintentional same-day Entries? q Will we require staffing changes? q Returns and Notifications of Change (NOCs) may be received faster. How will this change processes? q How do our customers use the Effective Entry Date field today? Will we need to educate, require additional indicator, both? q Have we updated our contingency plan? Agreements? 26

27 RDFI Operational Questions to Consider q Should we revise our procedures to handle time frames and commitments? Funds availability Consider sending returns / NOCs faster Delivery of remittance advice Reconciling the accounts q How will Same Day ACH affect our exceptions processing? q How is processing in-house versus processor (outsourced) affected? q How can we work with our vendor to ensure we are in compliance with same-day Entries? Review vendor procedures, reports, and automation processes q Will we require staffing changes? q Have we updated our contingency plan? 27

28 Michael Jeffcoat Manager, Payments Education (800) Upcoming epayresources events with CBANC Education: RDC Rules and Regulations Risks with Same Day ACH Tues Aug 29 at 11am CT/12pm ET Tues Sept 19 at 11am CT/12pm ET