Same-Day ACH, Bill Pay: Who Wins?

by Sarah Grotta 0

 In September, the next phase of same day ACH will take effect, requiring all ACH financial institutions, to receive not just credits but also ACH debits. One article in CU Times discusses the relative merits of same day ACH debits for bill pay:

Same-day ACH’s three-phase rollout may be speeding up payments in the financial ecosystem, but the jury’s still out on whether some of that progress will come at the expense of one well-known credit union product: Bill pay. Some say same-day ACH attracts mostly business users and can peacefully co-exist with bill pay; others wonder whether same-day ACH’s similar end game (quick, cheap funds movement) will water down bill pay’s reach with members.

Some of the thoughts discussed includes the opportunity for credit unions and other financial institutions to offer same day money movement for consumers very inexpensively to meet deadlines for bill payments. Unfortunately, I don’t believe that financial institutions are in much of a position to impact the habits bill paying consumers. Most bills are done directly through the biller through recurring transactions or directly on their online sites or mobile apps. Industry data tracks that the vast majority of bills are paid directly and not through a financial institutions product:

Online payments made on biller sites grew from 62% in 2010 to 73% in 2016; bank bill pay, on the other hand, shrank from 38% in 2010 to 27% in 2016, the study said.

The better opportunity may exist by reaching out to billers with same day ACH origination services.

Overview by Sarah Grotta, Director, Debit Advisory Service at Mercator Advisory Group

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