Same Day ACH Here and Abroad: Onsite Coverage
ORLANDO, Fla. — Real-time payment settlement is already happening. Just not in the United States.
That was the startling message delivered in a pair of panels Tuesday at the NACHA Payments 2014 conference, one on global ACH, the other a NACHA press conference on its proposal for what it calls real-time ACH in the U.S.
The backdrop to NACHA’s push is that the U.S. is not number one in this, said global ACH presenter Rene Pelegero, managing director of RPGC Group, a consultancy in Woodinville, Wash.
He said Finland already is doing essentially real-time settlement, Switzerland has adopted continuous settlement and that Mexico settles every 20 seconds.
“Much of the world is ahead of the U.S.,” said Pelegero.
Later in the day, NACHA CEO Janet Estep used the conference to offer more details about NACHA’s plan, announced in March, to attempt to persuade financial institutions to embrace faster settlement that, in NACHA’s present proposal, would involve settling ACH three times daily, up from today’s once daily.
She stressed in a press conference held at the conference, “NACHA seeks to find consensus, to find the sweet spot that will provide value to all.”
She also stressed that, in a current comment stage, NACHA is seeking input about projected costs and volumes for thrice-daily settlement to determine the feasibility.
Back at the global panel, presenter Liz Oakes, principal adviser, payments and transaction banking, at consulting firm KPMG, said that in the United Kingdom much settlement is real time, although small institutions – she pointed to building societies and credit unions – are largely left out.
Their settlements typically happen in a couple days, she said. “The secondary institutions have a significant lag,” Oakes said. For the big U.K. banks, though, “money moves in seconds,” she said.
One fact: “Not every payment needs to be real time,” said Pelegero.
Back at the NACHA press conference, Anita Patterson, director of treasury services at cable company Cox Enterprises, indicated that Cox would indeed welcome faster settlement, but she also said many Cox payments – to almost all vendors and also payroll to employees – would happily proceed on a slower rail.
Nonetheless, Patterson stressed, “The stars are beginning to align for real-time ACH processing. Everybody wants faster now.”