SAME DAY ACH CLEARING & SETTLEMENT: THE REVOLUTION OF FASTER ACH PAYMENTS Presenters: Sally Dievendorf, TD Bank Denise Grosso, TD Bank Laura Clary, Fiserv Manny Evangelou, TD Bank
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OBJECTIVES Provide a creative influence on Same-Day ACH strategic thinking Demonstrate specific examples of Payment Scenarios that reflect Same-Day ACH through Role-plays Offer a glimpse into the Technical and Operational efforts being made to prepare for the Revolution of Same-Day ACH Share high-level considerations for Same-Day ACH and insight about faster payment channels 4
AGENDA Evolution of Same-Day ACH Past, Present & Future Use Cases of Same-Day ACH "Emergency Payroll" "Cash Crunch" Strategic Thinking Customer Centric Approach Business/Technology/Vendor Approach Ongoing Considerations Future in Motion References & Links 5 Q & A
Evolution of Same-Day ACH Where we are: NACHA's Same-Day ACH Phased Proposal Federal Reserve's Pursuit of a Better Payment System...2010 2013 2015 NACHA's Phased Approach Phase II Phase I 2017 September 2016 2017 September 2016 Phase III 2018 March 2018 Where we were: Typical Operator Next Day Settlement for Current Effective Dated Entries Perceived Same-Day Settlement for On-Us / By-Us Originated Items FED ACH Same-Day Service (Opt-in) Direct Exchange
Use Case "Emergency Payroll" Same-Day ACH Credits Settlement Originator Never Late, Inc. Receiver Jo PayMe Originator Normally submits Friday's Payroll Wednesday afternoon Works for Never Late, Inc. and Relies on Paycheck for Month-to-Month Bills Receiver ACH Network ODFI R.D.F.I. CFPB, N.A. Memo-Posts credits on Collection Intra-Day (NACHA Phase I, II by EOD, Phase III by 5 p.m. RDFI Local Time) RDFI O.D.F.I. Dodd Frank, N.A. Distributes ACH entries multiple times per Day (Same-Day ACH Windows: 10 a.m. and 3 p.m. EST)
Use Case "Cash Crunch" Same-Day ACH Debits Settlement PaymeNow, Inc. Dodd Frank, N.A. Originates ACH Debits as Rendered Payments to cover Consumers Utility Usage and Management Originator ODFI Strategically distributes ACH entries multiple times per Day Receiver RDFI Jo PayBills CFPB, N.A. Makes timely payment arrangements with PaymeNow, Inc. to debit his account on July 17th. Strategically Memo-Posts debits on Collection Intra-Day
Strategic Thinking Customer Centric Approach Same-Day ACH ACH Network Operations Customers Technology
Strategic Thinking Operations/Technology/Vendor Approach Customer Awareness Education, Managed Expectations, Delivery, Service Funds Availability Debits, Frequency, Timing System Logistics Enhancements, Costs, Timelines, Impact, Constraints 10
Ongoing Considerations Regulatory Compliance, Time Order Posting, Reg E, NACHA Rules ACH EDI & Returns Reporting Obligation Operational Processing Reconciliation Billing, Expectations, Reporting NACHA Phased Approach Phase 4?
Future in Motion The Geography of Faster Payment Channels United States: o NACHA Proposal for Same Day ACH (Phases I,II, III) o Federal Reserve Pursuit of a Better Payment System Payment System Improvement Public Consultation Paper (Sept. 2013) o The Clearing House Initiative for Secure Real-Time Payment System Other Countries: o UK Faster Payments Service (FPS) o Australian Real Time Payments o Singapore G3 Immediate Payment System Consider this If the ACH Network does not capitalize, who will?
References & Links https://www.nacha.org/content/same-day-ach https://fedpaymentsimprovement.org/ https://www.theclearinghouse.org/press-room/in-thenews/2014/10/20141022-tch-to-develop-real-timepayments-system http://www.fasterpayments.org.uk/ http://www.apca.com.au/about-payments/future-ofpayments/real-time-payments http://www.euromoney.com/article/3303735/singaporecloses-in-on-real-time-payments-as-australia-prepares-formandate.html
Q & A
Thank You!! Sally Dievendorf, AAP VP, Operations Manager US Payments Services Division TD Bank Sally.Dievendorf@td.com Denise Grosso, AAP VP, Sr. Lead Business Systems Analyst US Technology Solutions TD Bank Denise.Grosso@td.com Laura Clary, AAP Director, Product Management Payments Group Fiserv Laura.Clary@fiserv.com Jared Ramsey, AAP VP, Operations Manager US Payments Services Division TD Bank Jared.Ramsey@td.com Judith Dunn, AAP VP, Projects Specialist Manager US Payments Services Division TD Bank Judith.Dunn@td.com Emanuel "Manny" Evangelou VP, Sr. Business Systems Analyst US Technology Solutions TD Bank Emanuel.Evangelou@td.com