ARTICLES 

Browse through our library, search by title or filter by topic.

Same-Day ACH Fee Resembles Controversial Interchange Fees

NACHA membership has just approved its Same-Day ACH proposal. Same-day capability will be implemented in three phases over an 18-month period starting in September 2016.

However, there is one element of the proposal that has struck a nerve with merchants - an interbank fee on each transaction to be paid by originating institutions to receiving institutions. NACHA had estimated that receiving financial institutions will incur $49 million in net new operating costs and $118 million in implementation costs related to the same-day plan by 2027. Much of these costs are related to the need for stricter review of transactions for risk, more comprehensive reporting systems, and more due diligence directed at originators. The interbank fee is a mechanism for RDFIs to recover the costs, plus a reasonable rate of return. Originally proposed at 8.2 cents, this Same Day Entry Fee has been modified to an estimated 5.2 cents.

Originating banks will probably pass all or most of the fee on to their merchant clients. Merchant groups object that the fee is too high and might discourage merchants from using the service. They also object to the idea of price-setting by a central authority, in this case NACHA, rather than fees being negotiated between banks. It’s all painfully familiar to merchants who already bear the cost of interchange fees for card transactions, which are passed on to them by acquirers.

Filter by Topic(select one)

  • ACH Payments

    Who manages the ACH Network? What is same-day ACH and is it mandatory?...

  • Check Imaging

    Are checks going away in the US? What are other countries doing with paper checks?...

  • Receivables

    What are the current trends with consumer bill payments?  How will the USPS changes affect us?...

  • Risk Management

    Is payments fraud on the rise? Where are the highest risks and what can we do?...

  • Payments Infrastructure

    What are the latest scanner introductions? Is a Virtual Environment right for me?...