Shopping on line can be easy, simple and save you lots of money. It can also take a lot of your time, frustrate you, and result in unwanted purchases. Now the same can be said for regular high street shopping, but with the vast opportunity presented by the Internet it will pay you to spend a few minutes reading this and understanding how to better optimize your Automated Clearing House shopping experience:
1. Compare - without doubt the biggest advantage that the Automated Clearing House offers shoppers today is the ability to compare thousands of Automated Clearing House at a time. This is a great thing, but not necessarily all the time! Too much can be daunting at times so take advantage of the great comparison sites and where possible let them do the hard work for you.
2. Research - if it has been said it will be on the internet. Ignorance is no longer a justifiable reason for buying the wrong thing. Take the time to research in detail everything that you could possible want to know about
3. Testimonials - don't know anybody that has bought a Automated Clearing House? Wrong! If the Automated Clearing House is good the internet will let you know. Use the Internet as a friend and get testimonials before you buy.
4. Questions - Got a question about Automated Clearing House then search the Forums, FAQ's, Blogs etc. Don't be afraid to ask .....
5. Reputation - Never heard of the company selling Automated Clearing House? Don't worry, no reason why you should know every company in the world, but you know someone that does! Use the internet to find out what people are saying about Automated Clearing House and build up a picture of their reputation for sales, returns, customer service, delivery etc.
6. Returns - still worried that even after all of the above your Automated Clearing House wont be what you want? Check out the returns policy. There is so much competition now that someone, somewhere is bound to offer the terms that you are comfortable with.
7. Feedback - happy with your Automated Clearing House then let people know, after all you are depending on others people input in your buying decision, so why not give a little back.
8. Security - check for the yellow padlock on the Automated Clearing House site before you buy, and the s after http:/ /i.e. https:// = a secure site
9. Contact - got a question about Automated Clearing House, or want to leave a comment then check out the sites contact page. Reputable companies have them and respond.
10. Payment - ready to pay for your Automated Clearing House, then use your credit card or PayPal! Be aware of companies that don't accept them, there may be genuine reasons but given the huge amount of choice you have when buying online there is no reason at all not to buy via credit card or PayPal.
Automated Clearing House (ACH) is the name of an electronic network for financial transactions in the United States. ACH processes large volumes of both credit and debit transactions which are originated in batches. Rules and regulations governing the ACH network are established by
NACHA-The Electronic Payments Association, formerly the
National Automated Clearing House Association, and the Federal Reserve (Fed). In 2002, this network processed an estimated 8.05 billion ACH transactions with a total value of $21.7 trillion. In the rest of the developed world, these rules and regulations are defined by each country's regulatory bodies. European Payments Council is currently implementing a PE-ACH, Pan-European ACH.
ACH credit transfers include direct-deposit payroll payments and payments to contractors and vendors. ACH debit transfers include consumer payments on insurance premiums, mortgage loans, and other kinds of bills. Businesses are also increasingly using ACH to collect from customers online, rather than accepting credit or debit cards.
Debit transfers also include new applications such as the Point-of-Purchase (POP) check conversion pilot program sponsored by
NACHA-The Electronic Payments Association. FedACH is the Federal Reserve's centralized application software used to process ACH transactions. Both the government and the commercial sectors use ACH payments. The Electronic Payments Network (EPN) is the only private sector ACH Operator in the United States.
The Federal Reserve Banks are collectively the nation's largest automated clearinghouse operator and in 2005 processed 60% of commercial interbank ACH transactions. The EPN processed the remaining 40%. EPN and the Reserve Banks rely on each other for the processing of some transactions in which either the Originating Depository Financial Institution (ODFI) or Receiving Depository Financial Institution (RDFI) is not their customer. These interoperator transactions are settled by the Reserve Banks.
Uses of the ACH Payment System
- Direct Deposit of payroll, Social security and other government benefits, and tax refunds
- Direct Payment of consumer bills such as mortgages, loans, utility bills, and insurance premiums, rents, and any other regular payment.
- Business-to-business (B2B) payments
- E-check
- E-commerce payments
- Federal, state, and local tax payments
ACH process
In accordance with the rules and regulations of ACH, no financial institution may simply issue an ACH transaction (whether it be debit or credit) towards an account without prior authorization from the account holder (known as the
Receiver in ACH terminology).
An ACH entry starts with a
Receiver authorizing an
Originator to issue ACH debit or credit to an account. An
Originator can be a person or a company (such as the gas company, a local cable company, or one's employer). Depending on the ACH transaction, the
Originator must receive written (ARC, POP, PPD), verbal (TEL), or electronic (WEB) authorization from the
Receiver. Written authorization constitutes a signed form giving consent on the amount, date, or even frequency of the transaction. Verbal authorization needs to be either audio recorded or the "Originator" must send a receipt of the transaction details before or on the date of the transaction. A WEB authorization must include a customer reading the terms of the agreement and typing or selecting some form of an "I agree" statement.
Once authorization is acquired, the
Originator then creates an ACH entry to be given to an
Originating Depository Financial Institution (ODFI), which can be any financial institution that does ACH origination. This ACH entry is then sent to an
ACH Operator (usually the Fed) and is passed on to the
Receiving Depository Financial Institution (RDFI), where the
Receiver's account is issued either a credit or debit, depending on the ACH transaction.
The RDFI may, however, reject the ACH transaction and return it to the ODFI with the appropriate reason, such as that there were insufficient funds in the account or that the account holder indicated that the transaction was unauthorized. An RDFI has a prescribed amount of time in which to perform returns, ranging from 2 to 60 days from the receipt of the ACH transaction. However, the majority of transactions, if going to be returned, are done so within 24 hours from midnight of the day the RDFI receives the transaction.
An ODFI receiving a return of an ACH entry may re-present the ACH entry two more times, or up to three total times, for settlement. Again, the RDFI may reject the transaction. After which, the ODFI may no longer represent the transaction via ACH.
Standard entry class code
The Standard Entry Class (SEC) code is a three letter code that identifies the nature of the ACH entry. Here are some common SEC codes:
ARC
Accounts Receivable Entries. Checks received by a merchant through mail or drop box and presented as an ACH entry.
BOC
Back Office Conversion. Checks that are converted from paper to an electronic debit at a centralized location.
CCD
Corporate Cash Disbursement. Primarily used for business to business transactions.
DNE
Death Notification Entry. Issued by the Federal Government.
POP
Point-of-Purchase. A check presented in-person to a merchant for purchase is presented as an ACH entry instead of a physical check.
POS
Point-of-Sale. A debit at electronic terminal initiated by use of a plastic card. An example is using your Debit card to purchase gas.
PPD
Prearranged Payment and Deposits. Used to credit or debit a consumer account. Popularly used for payroll direct deposits and preauthorized bill payments.
RCK
Represented Check Entries. A physical check that was presented but returned because of insufficient funds may be represented as an ACH entry.
TEL
Telephone Initiated-Entry. Verbal authorization by telephone to issue an ACH entry such as checks by phone. (TEL code allowed for inbound telephone orders only. NACHA disallows the use of this code for outbound telphone solicitations calls. )
WEB
Web Initiated-Entry. Electronic authorization through the Internet to create an ACH entry such as PayPal.
XCK
Destroyed Check Entry. A physical check that was destroyed because of a disaster can be presented as an ACH entry.
Some problems with ACH
ACH payments have been around for some time now, but people are just getting used to them, especially with the ARC, POP, and RCK, where the original instrument was a physical check. One problem occurs when the account holder issues a stop payment on a physical check not knowing that the check was presented as an ACH entry.
A timeframe problem can cause potential loss towards an RDFI due to irregular timeframes provided for the return of ACH entries that are subject to Electronic Funds Transfer Act (Regulation E). An example is a POP and ARC entry, where an RDFI has only 60 days from the date of settlement to return an unauthorized debit, and the consumer has 60 days upon notification to dispute a transaction in his statement under Regulation E. With these timeframes, it is possible that the 60-day period allowed for ACH return would expire even before the consumer's 60-day protection (under Regulation E) would expire.
Another problem deals with compliance where the merchant causes an ODFI to issue an ARC or POP entry (for check presentment) and then fails to comply with the handling of the physical check and presents the physical check for payment as well. This causes a double-debit against a consumer account.
External links
- List of U.S. banks that offer free ACH transfers to personal account holders (outdated, needs to be updated)
- Federal Reserve Payment Systems
- What is ACH?
- ACH Rules Online
- Federal Reserve's ACH Number Lookup
- Interactive Map of Regional Payment Associations
- Regulation E
Automated Clearing House (ACH) is the name of an electronic network for financial transactions in the
United States. ACH processes large volumes of both credit and debit transactions which are originated in batches. Rules and regulations governing the ACH network are established by
NACHA-The Electronic Payments Association, formerly the
National Automated Clearing House Association, and the
Federal Reserve (Fed). In 2002, this network processed an estimated 8.05 billion ACH transactions with a total value of $21.7 trillion. In the rest of the developed world, these rules and regulations are defined by each country's regulatory bodies. European Payments Council is currently implementing a PE-ACH, Pan-European ACH.
ACH credit transfers include direct-deposit payroll payments and payments to contractors and vendors. ACH debit transfers include consumer payments on insurance premiums, mortgage loans, and other kinds of bills. Businesses are also increasingly using ACH to collect from customers online, rather than accepting credit or debit cards.
Debit transfers also include new applications such as the Point-of-Purchase (POP) check conversion pilot program sponsored by
NACHA-The Electronic Payments Association.
FedACH is the Federal Reserve's centralized application software used to process ACH transactions. Both the government and the commercial sectors use ACH payments. The Electronic Payments Network (EPN) is the only private sector ACH Operator in the United States.
The Federal Reserve Banks are collectively the nation's largest automated clearinghouse operator and in
2005 processed 60% of commercial interbank ACH transactions. The EPN processed the remaining 40%. EPN and the Reserve Banks rely on each other for the processing of some transactions in which either the Originating Depository Financial Institution (ODFI) or Receiving Depository Financial Institution (RDFI) is not their customer. These interoperator transactions are settled by the Reserve Banks.
Uses of the ACH Payment System
- Direct Deposit of payroll, Social security and other government benefits, and tax refunds
- Direct Payment of consumer bills such as mortgages, loans, utility bills, and insurance premiums, rents, and any other regular payment.
- Business-to-business (B2B) payments
- E-check
- E-commerce payments
- Federal, state, and local tax payments
ACH process
In accordance with the rules and regulations of ACH, no financial institution may simply issue an ACH transaction (whether it be debit or credit) towards an account without prior authorization from the account holder (known as the
Receiver in ACH terminology).
An ACH entry starts with a
Receiver authorizing an
Originator to issue ACH debit or credit to an account. An
Originator can be a person or a company (such as the gas company, a local cable company, or one's employer). Depending on the ACH transaction, the
Originator must receive written (ARC, POP, PPD), verbal (TEL), or electronic (WEB) authorization from the
Receiver. Written authorization constitutes a signed form giving consent on the amount, date, or even frequency of the transaction. Verbal authorization needs to be either audio recorded or the "Originator" must send a receipt of the transaction details before or on the date of the transaction. A WEB authorization must include a customer reading the terms of the agreement and typing or selecting some form of an "I agree" statement.
Once authorization is acquired, the
Originator then creates an ACH entry to be given to an
Originating Depository Financial Institution (ODFI), which can be any financial institution that does ACH origination. This ACH entry is then sent to an
ACH Operator (usually the Fed) and is passed on to the
Receiving Depository Financial Institution (RDFI), where the
Receiver's account is issued either a credit or debit, depending on the ACH transaction.
The RDFI may, however, reject the ACH transaction and return it to the ODFI with the appropriate reason, such as that there were insufficient funds in the account or that the account holder indicated that the transaction was unauthorized. An RDFI has a prescribed amount of time in which to perform returns, ranging from 2 to 60 days from the receipt of the ACH transaction. However, the majority of transactions, if going to be returned, are done so within 24 hours from midnight of the day the RDFI receives the transaction.
An ODFI receiving a return of an ACH entry may re-present the ACH entry two more times, or up to three total times, for settlement. Again, the RDFI may reject the transaction. After which, the ODFI may no longer represent the transaction via ACH.
Standard entry class code
The Standard Entry Class (SEC) code is a three letter code that identifies the nature of the ACH entry. Here are some common SEC codes:
ARC
Accounts Receivable Entries. Checks received by a merchant through mail or drop box and presented as an ACH entry.
BOC
Back Office Conversion. Checks that are converted from paper to an electronic debit at a centralized location.
CCD
Corporate Cash Disbursement. Primarily used for business to business transactions.
DNE
Death Notification Entry. Issued by the Federal Government.
POP
Point-of-Purchase. A check presented in-person to a merchant for purchase is presented as an ACH entry instead of a physical check.
POS
Point-of-Sale. A debit at electronic terminal initiated by use of a plastic card. An example is using your Debit card to purchase gas.
PPD
Prearranged Payment and Deposits. Used to credit or debit a consumer account. Popularly used for payroll direct deposits and preauthorized bill payments.
RCK
Represented Check Entries. A physical check that was presented but returned because of insufficient funds may be represented as an ACH entry.
TEL
Telephone Initiated-Entry. Verbal authorization by telephone to issue an ACH entry such as checks by phone. (TEL code allowed for inbound telephone orders only. NACHA disallows the use of this code for outbound telphone solicitations calls. )
WEB
Web Initiated-Entry. Electronic authorization through the Internet to create an ACH entry such as
PayPal.
XCK
Destroyed Check Entry. A physical check that was destroyed because of a disaster can be presented as an ACH entry.
Some problems with ACH
ACH payments have been around for some time now, but people are just getting used to them, especially with the ARC, POP, and RCK, where the original instrument was a physical check. One problem occurs when the account holder issues a stop payment on a physical check not knowing that the check was presented as an ACH entry.
A timeframe problem can cause potential loss towards an RDFI due to irregular timeframes provided for the return of ACH entries that are subject to Electronic Funds Transfer Act (Regulation E). An example is a POP and ARC entry, where an RDFI has only 60 days from the date of settlement to return an unauthorized debit, and the consumer has 60 days upon notification to dispute a transaction in his statement under Regulation E. With these timeframes, it is possible that the 60-day period allowed for ACH return would expire even before the consumer's 60-day protection (under Regulation E) would expire.
Another problem deals with compliance where the merchant causes an ODFI to issue an ARC or POP entry (for check presentment) and then fails to comply with the handling of the physical check and presents the physical check for payment as well. This causes a double-debit against a consumer account.
External links
- List of U.S. banks that offer free ACH transfers to personal account holders (outdated, needs to be updated)
- Federal Reserve Payment Systems
- What is ACH?
- ACH Rules Online
- Federal Reserve's ACH Number Lookup
- Interactive Map of Regional Payment Associations
- Regulation E
Automated Clearing House (ACH): Overview
ACH system is the primary electronic funds transfer (EFT) system used by agencies to make payments
Automated Clearing House - Wikipedia, the free encyclopedia
Automated Clearing House (ACH) is the name of an electronic network for financial transactions in the United States. ACH processes large volumes of both credit and debit ...
Apportionment
Please provide the following information to make an apportionment. All information you provide will be kept confidential and will not be shared with any other organization.
ALACHA Alabama Automated Clearing House Association ACH
ALACHA - Alabama Automated Clearing House Association. Each year, billions of dollars are transmitted through the Automated Clearing House (ACH) Network.
NACHA-The Electronic Payments Association
Representing more than 12,000 financial institutions through its 34 regional associations, NACHA develops operating rules for the Automated Clearing House(ACH) Network and other ...
What is ACH?
What is ACH? The Automated Clearing House (ACH) Network. The ACH Network is a highly reliable and efficient nationwide batch-oriented electronic funds transfer system governed by ...
Automated Clearing House
The Automated Clearing House is a secure, private electronic payment transfer system that connects all U.S. financial institutions. Direct paycheck deposits and debit card ...
FRB: Federal Reserve Automated Clearinghouse Operations
Automated Clearinghouse Operations About | Annual Data | Quarterly Data. The automated clearinghouse (ACH) is a nationwide mechanism that processes electronically originated ...
Automated Clearing House financial definition of Automated Clearing ...
While satisfaction with card-based payments has increased to 77 percent from 70 percent last year, their preference for other electronic payment options such as automated clearing ...
Close Brothers Limited - Treasury Services - CHAPS - Clearing House ...
To send money to Close Brothers you can make a bank to bank transfer using CHAPS (Clearing House Automated Payment System) or send a cheque in the post.
