- 1). Identify the operators of ACH. The central clearing house for ACH transactions is held with the Federal Reserve Board.
- 2). Determine who can use the ACH system. To use the Federal ACH, an entity must first become a member. This allows the financial institution to transfer and submit batches of payments, like payroll, Social Security and other corporate payments. A financial institution that receives ACH filings is called a receiving depository financial institution (RDFI).
- 3). Review the roles in ACH transactions. The entity that submits an ACH entry is referred to as an originator. The financial institution that initiates the ACH entry is called an originating depository financial institution (ODFI).
- 4). Understand who monitors control standards for ACH. The National Automated Clearing House Association (NACHA) maintains operating protocols that govern acceptable ACH transaction standards.
previous post
next post