Future-proofing ACH payments processing

Written by Mike Vigue Chief Product Officer, Payments
girl working on a financial report with a view of new york in the background

ACH is here to stay! Instant payments have much to offer – but for many use cases, such as payroll processing, ACH continues to play a valuable role in the payments landscape. In fact, the volume of ACH payments is likely to continue to rise in almost every payment category, even with instant payment innovation.

That’s not to say there isn’t room for improvement. Many banks have been using the same systems to manage their ACH payments for many years – after all, if it’s not broken, why fix it? But these systems do face significant challenges, and for many financial institutions, it’s becoming clear that legacy systems are no longer enough to meet their evolving scale, IT, and security needs.

With ACH payment volumes continuing to grow, many legacy systems simply can’t accommodate the scale that financial institutions need and lack the capacity to support new items on the progressive ACH roadmap. Such ACH systems also tend to be expensive to upgrade and customize, and in some cases are being sunset by their vendors. This creates a critical challenge for banks which are struggling to stay up to date with compliance requirements and updates to ACH services.

The business needs of these payments do not exist in ACH isolation. As banks set their sights on modernizing their payments infrastructures, they should be considering how they can upgrade their existing systems to support not just ACH, but also new payment rails like FedNow.

ACH and beyond

With the continuous increase and diversification in payments volumes, there’s much to be gained by adopting a modern payments solution. But ACH processing is just one part of a much bigger picture. As they look to modernize their payments infrastructure more broadly, banks should adopt a Payment Hub solution to consolidate everything from wire and ACH payments to instant and cross-border payments. With the right solution – one that brings the processing of multiple payment types onto a single platform – banks can access the tools they need to reduce costs, simplify complexity, boost operational efficiency, and speed up time to market for new products and services.

Finastra’s Payment Hub is the right solution at the right time, to help banks meet their fragmented and outdated payments infrastructure challenges. ACH supported features include file, batch, and transaction level processing (including reversals, returns and rejects), interface support, standard uploads, admin message processing, and exposure validation for credit and debit flows – as well as ongoing compliance with ACH changes and NACHA updates as they arise.

Built on a scalable and modular architecture, our solution harnesses cloud-native technologies including Open APIs and microservices, making it easy to add new payment rails and services when the need arises. End-to-end payment processing automation can lead to productivity improvements and higher straight-through processing rates. On another note, financial institutions can tap into the benefits of a SaaS delivery model using our Payments Hub as a Service solution, with a rapid onboarding process that can get banks up and running in just a few months.

In summary, ACH is here to stay – and as financial institutions look to support the continuing growth in volumes and services, they should explore the benefits of managing both ACH and other payment types using a single platform. Only then can banks maximize efficiency, benefit from deeper insights, and future-proof their entire payments infrastructure.

Find out how Finastra can help future-proof your payments infrastructure here

Written by
Mike Vigue

Mike Vigue

Chief Product Officer, Payments

Mike has more than 25 years of experience as a leader and product innovator in the world of financial technology. With a track record of managing teams and building products that have helped the Financial Services market address opportunities in Digital Banking, Customer Engagement, Real-Time...

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