ACH Updates for 2022

Same Day ACH has only been around for just over 5 years, and a lot has changed in that time. ACH volume rose by 75.1% and its value rose by 92.9% in the fourth quarter of 2021, according to recent reports from Nacha and the Federal Reserve.

ACH has changed the way we interact with our money, from business accounts to donations and personal transactions, and that doesn’t seem to be changing anytime soon. Here are some of the latest ACH updates and what they could mean for you.

Recent Changes to Same Day ACH Rules

Same Day ACH continues to measure its services based on the demands of the digital payment climate and adapt to make things easier and more convenient for its users.

Through ACH, payments are settled 4 times a day and there are more opportunities for same day and next day settlements. And, in a rule that went into effect mid-March of 2022, the new Same Day ACH per-transaction limit was increased to $1 million.

Payment Industry Trends

In the payments industry, B2B and P2P payments continue to trend in favor of digital Same Day ACH transfers. Check disbursements continue to decline while disbursements using digital wallets are gaining popularity.

There are several areas that are gaining momentum with ACH transfers:

  • 70% of healthcare claim payments are processed through ACH now
  • 30% of religious donations are now being digitally processed as recurring payments, with more than half of all donations being done electronically
  • Banks are increasing their technology offerings to keep up with the ACH value and volume growth

ACH Updates to Account Validation Rule

In a recent Nacha article, the ACH governing body discussed how they are addressing concerns surrounding data quality, risk, and compliance strategies for the payment network.

On March 19, 2022, the Account Validation Rule became enforceable. This rule “requires that the first use of an account number, or account number changes, be validated as part of a commercially reasonable fraudulent transaction detection system.”

Nacha has built a peer-to-peer network called Phixius, that can be used to ensure that businesses adhere to the Account Validation Rule.

According to Nacha, during this year’s second quarter, Phixius will also be used to validate account ownership in an effort to cut down on fraud and enhance the accuracy and efficiency of payment routing as a whole.

Nacha says they “will not enforce this rule for an additional period of one year from the effective date with respect to covered entities that are working in good faith toward compliance, but that require additional time to implement solutions.”

Coming Soon: Micro-Entries Rule

Another announcement from Nacha piggybacks on the new account validation rule and targets the use of micro-entries.

Micro-entries are often used by financial institutions to verify an account. An example of this includes a bank sending two small credit amounts to an account, then sending one debit amount that replaces the full test amount.

Under the new rules, micro-entries must be less than $1 each. And the formatting of these entries will also be standardized, with “ACCTVERIFY” required in the company entry description field.

The first phase of this rule takes effect on September 16, 2022, with the requirements listed above. Phase 2 of this rule will start on March 17, 2023, which will require micro-entry originators to use “commercially reasonable fraud detection, including volume monitoring.” This falls in line with the account validation rule and its deadlines as well.

Other Upcoming Rules

There are a handful of upcoming rules that will affect Same Day ACH users with specific volumes and other criteria.

On June 30, 2022, Phase 2 of the Supplementing Data Security Requirements takes effect. This rule is for large, non-FI (financial institution originators, third-party service providers (TPSPs), and third-party senders (TPSs). This rule aims to protect account information by “rendering it unreadable when it is stored electronically.”

This rule and phase apply to:

  • Those with 6 million transactions or greater annual ACH volume (implemented during Phase 1)
  • and those with 2 million transactions or greater annual ACH volume (implemented during Phase 2)

The last available upcoming rule addresses third-party sender roles and responsibilities. It will go into effect on September 30, 2022 (with a 6-month grace period for certain rule aspects).

The rules will define these roles and responsibilities by addressing existing Nested Third-Party Sender (TPS) relationships and practices. It will also aid in this effort by “making explicit and clarifying the requirement that a TPS conduct a risk assessment.”

Security and growth are the main focus of the current and upcoming Nacha rules for Same Day ACH.

Take Advantage of These ACH Updates Today with ReliaFund

At ReliaFund, we offer the best in ACH processing. You can use it for payroll processing, subscriptions, memberships, and more. ACH allows you to boost efficiency, streamline your accounting and financial reporting, lower costs, and even accept payments online or over the phone.

Our integrated platform allows you to connect to outside applications, send customers digital receipts, and so much more. Keep your payment activities centrally located with ReliaFund’s all-in-one payment platform.

Do you have questions? Schedule a consultation today to learn more.