What Faster Payments Mean For Businesses The trend toward same-day/immediate payment networks is accelerating worldwide. Countries such as the United Kingdom, Denmark, India and Chile have real-time or near real-time payment systems in place. Predictions for the next 2-3 years indicate at least another 10 countries will make commitments to new immediate payment methods.

In the United States, the most recent development is the introduction of same-day settlement of Automated Clearing House (ACH) transactions. Typically, ACH transactions take 24-48 hours to process. Now, with a new rule that took effect September 23, 2016, all banks accept requests for Same Day Settlement of qualified ACH credits.

How does this new rule impact businesses?Currently, the only universal method to send funds same-day is by wire transfer, which can be costly and not practical for smaller payments. Businesses today are keenly focused on cash flow and accounts receivables management. With Same Day ACH, companies may increase cash flow and improve the experience of their customers.

Benefits include:1,2

• Providing a more accurate, real-time view of balance sheets, incoming payments and any potential cash shortages

• Enabling companies to gain efficiencies in straight-through processing with a greater depth of data for each payment transaction

• Fulfilling emergency payroll distributions to employees for a final paycheck or to correct an error with regular payroll processing

• Reimbursing insurance claims directly into patient accounts, even on the same day as the procedure or appointment

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April 2017

THE QUARTERLY COLLECTIONWhat you need to know

SAME DAY ACH FACTS

More than 13 million Same Day ACH transactions**Data reflects numbers gathered between September 23 – December 31, 2016.

Direct deposit via ACH payments had the greatest volume of Same Day ACH transactions

Approximately 194,000 Same Day ACH transactions daily

Average of $1,283per transaction

52% - 6.8 Million Direct Deposit via ACH

32% - 4.1 Million Business-to-Business Payments

14% - 1.8 Million Person-to-Person Payments

2% - 233,000 Consumer Bill Payments

FASTER PAYMENTS

What’s next for the payments industry?Implementation of Same Day ACH will occur in three phases:

1. September 2016: credits and non-monetary entries

2. September 2017: credits and debits

3. March 2018: mandatory 5 p.m. deadline for funds availability of credits

Additionally, a Federal Reserve Task Force was formed with a mission to identify and evaluate approaches for implementing a safe, ubiquitous, faster payment capability for U.S. payment networks. Assessment results and recommendations were published in early 2017.

Ask your MidFirst Treasury Management Sales representative for additional details on how Same Day ACH may benefit your business.

Please call 877-709-7326 or email tmsales@midfirst.com.

Visit www.nacha.org and https://fedpaymentsimprovement.org for more information.

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Nearly $17 billion transferred by Same Day ACH

53% - 8.8 Billion Business-to-Business Payments

35% - 5.9 Billion Direct Deposit via ACH

8% - 1.2 Billion Person-to-Person Payments

4% - 733 Million Consumer Bill Payments

What you need to know continued

Sources1AFP Exchange: Speed Boost – What does faster ACH mean for businesses? November 20162FITB: Faster Payments, Bigger Business Payoff

WHAT’S NEXT?

“...safe, ubiquitous, faster payment capability for U.S.

payment networks.”