Agenda. Overview of the Rule For the Receiver For the Originator Risk Management Catalyst Corporate Preparations Wrap Up. The Rule

Transcription

1 Click here to view a recording of this webinar Disclaimer This course is intended to provide a review of Same Day ACH. Handout materials and seminar discussions are not intended to be used as legal advice. Final interpretation and/or use of the materials contained in this presentation are at the discretion and the responsibility of the individual user. There is no warranty, expressed or implied, in connection with making this handout available. 2

2 Agenda Overview of the Rule For the Receiver For the Originator Risk Management Catalyst Corporate Preparations Wrap Up 3 The Rule 4

3 Same Day ACH Potential Payroll Business-to-Business Account-to-Account Transfers Collections Business-to-Consumer Payments Expedited Bill Payments Check Conversion Person-to-Person Payments 5 Eligibility Processing Windows Settlement Times Funds Availability Entry Fee Domestic Transactions <= $25,000 Effective 9/23/16: Credits Only Effective 9/15/17: Credits and Debits (No international transactions--iats) Same Day Origination 10:30 a.m. and 2:45 p.m. ET Return Items: 4:00 p.m. ET Two Same Day Settlement Times 1 p.m. ET & 5 p.m. ET Plus: Same Day Returns at 5:30 p.m. ET Availability for Same Day Credits Eff. 9/23/16: End RDFI Processing Day Eff. 3/16/18: 5 p.m. RDFI local time Same Day Entry Fee of 5.2 Charged to ODFI Paid to RDFI The Basics Mandatory for RDFIs Optional for ODFIs NOTE All times listed are for the Fed schedule. Check slide #37 for Catalyst ACH program times. 6

4 Implementation Phases Phase 1 Sept. 23, new processing windows 2 new settlement times Credits Only Funds available by end of RDFI processing day Phase 2 Sept. 15, 2017 Both Credits & Debits Phase 3 March 16, 2018 Funds available by 5 p.m. RDFI local time 7 Eligible Domestic Transactions (<=$25,000) Credits (Sept. 23, 2016) Debits (Sept. 15, 2017) Non-Monetary Transactions NOCs Pre-notes DNEs Zero $ Returns 8

5 Not Eligible Transactions above $25,000 International (IAT) Transactions Automated Enrollment Entries (ENRs) 9 Same Day ACH Clearing Windows Morning submission deadline at 10:30 a.m. ET, with settlement occurring at 1 p.m. ET Afternoon submission deadline at 2:45 p.m. ET, with settlement occurring at 5 p.m. ET Plus a returns afternoon submission deadline at 4:00 p.m. ET, with settlement occurring at 5:30 p.m. ET Note: These are the FRB s deadlines. Check with your processor for your deadlines. 10

6 This is the Fed Schedule only! Check with your processor! 11 Processing Deadlines are Important Receiving ACH Operator establishes settlement date based on a combination of: Effective entry date Processing deadline Invalid or Stale Date Will be settled at next available settlement date Could be same day or next day 12

7 Effective Entry Date vs. Settlement Date May be changed by Receiving ACH Operator if: Entry received after deadline for same-day settlement Entry is for an amount greater than $25,000. Entry bears the IAT standard entry class code. Entry bears the ENR standard entry class code Debit entry contains an effective entry date that is the day of processing (phase 1) May include both Same Day and non-same Day in same file 13 Three Settlement Times (2 are new) 2:15 AM ACH Opens 6:00 AM RDFI receipt files of next-day ACH 8:30 AM Settlement for next-day transactions 10:30 AM ODFI deadline for same day window 12:00 Noon RDFI receipt files for same-day window 1:00 PM Settlement for same day transactions (new) 2:45 PM ODFI deadline for same day window 4:00 PM RDFI receipt files for same-day window 5:00 PM Settlement for same day transactions (new) This is the FED schedule--all times Easter See slide #37 for Catalyst ACH participant schedule 14

8 Beginning Phase 1 (eff. 9/23/16) By end of RDFI s processing day Funds do not have to be available for withdrawal Phase 3 (eff.3/17/18) By 5 p.m. RDFI local time 15 RDFI Receives 5.2 ODFI Pays Designed to help offset cost to RDFIs Settled by ACH Operators in monthly billing 16

9 Impact of the Rule RDFI Mandatory 17 Return Guidelines Same-Day Items Not required to return on same-day basis Return timeframes same as next-day items No earlier than Effective Entry Date contained in the original entry Return of an entry that contains an invalid or stale effective entry date settled at next available settlement opportunity 18

10 Return Guidelines Non-Same-Day Items May be returned same day Same-day Eligibility requirements do not apply to returns, meaning: - International (IAT) items - Entries greater than $25,000 - Entry Fee 19 Return Guidelines Considerations Will you send them same-day? How will you handle settlement for returns? How is your current system setup to do Returns? Will any procedural changes need to be made? How will NOCs be handled? 20

11 Things to Consider Funds Availability Phase 1 & 2 = By end of processing day Phase 3 = By 5 p.m. Downstream applications and systems Same-Day ACH Entry fee New file delivery schedule Procedures and resources Posting on settlement date 21 Things to Consider Balancing How often Morning only After each processing window Morning and end of day Determine when exceptions will be processed Monthly reporting on Same Day Entries Stop Payments Reduced response time (less time between authorization and settlement) 22

12 Impact of the Rule ODFI Optional 23 Things to Consider Initial Limitations Credits=Phase 1 Debits=Phase 2 Balanced Files Educate Originators Company Descriptive Date (optional) Establish Deadlines Originator Agreements Fees for Same Day ACH Origination 24

13 Things to Consider File submission and delivery schedules Processing schedules and procedures Systems and applications Cost Considerations Internal software changes Additional staffing Originator training New originator agreements 25 Operations Things to Consider Comingled Files May include both same day and non-same day batches in same file ACH Operator calculates settlement date of each entry Effective entry date Eligibility Time file submitted 26

14 Operations Things to Consider Prenotes Eligible for same day Credits eligible 9/23/16 Debits eligible 9/15/17 RDFIs not required to return same day Returns Same Day items not required to be returned same day Faster Non-Same Day items may be returned same day ACH Operator will settle returns at first opportunity Not subject to eligibility limits 27 Operations Things to Consider Reversals with Same Day ACH Potential for original entry and reversal to post same day Reversals cannot settle prior to original entry Establish reversal parameters with originators Benefit of originating in first same-day window is that reversals can be processed in the second window Debits cannot be processed as same day until phase 2 28

15 Risk Management 29 Credit Risk Considerations Reduced origination credit risk for ODFI Less lead time between file submission and settlement Prefunding times may change ODFI risk exposure may fluctuate Balanced files 30

16 Fraud Risk Considerations Secure computer and network environments Employee training Accurate account information Use of pre-notes or account validation services Strong authentication and security for file delivery Implement limits on origination Account monitoring parameters Staffing ACH Kiting 31 Operational Risk Considerations ODFI Operational delays Processing issues Originator eligibility/agreements/training Identifying transactions Billing Inadvertent same-day entries Deadlines Reversals $25,000 transaction limit Credit approvals 32

17 Operational Risk Considerations RDFI Account monitoring Staffing requirements Contingency planning Staff training Update ACH Risk Management Policies/Procedures Annual ACH Risk Assessment 33 Catalyst Corporate Participants 34

18 ACH Origination Changes Current Schedule Two file delivery deadlines New Schedule Four file delivery deadlines 35 ACH Receipt Changes Combined file option discontinued Accept and post multiple files New File receipt times Data processor notification/programming Modify internal procedures for pick-up/posting times ACH Settlement Changes Multiple settlements possible (currently all settlements post by 7:30 a.m. Central) Balance multiple files and settlements Effective August 1,

19 Effective 9/23/16 All Times Central 37 Wrap Up 38

20 Resources Same Day ACH Resource Center Fact Sheets FAQs Q & As Case Studies News Resources for Originators Education Multimedia Press Releases 39 Resources Regional Payments Associations 40

21 Resources Coming Soon! Catalyst Corporate s ACH Advisor Newsletter 41 Resources Contact Us Catalyst Corporate ACH Department Call: , Option 3 Or ach@catalystcorp.org 42