ACH Origination

Manage your business payables efficiently with Automated Clearing House (ACH) origination. It's a fast, secure and convenient way to pay your vendors, make cash disbursements and even pay employees through Direct Deposit. 

Features and Benefits:
  • Download or manually input electronic transaction information. 
  • Debit your customers' accounts for services rendered such as membership or dues.
  • Make federal and state tax payments electronically. 
  • Simplify payday with Direct Deposit payroll for your employees. 

NACHA Rule Updates

2021 NACHA Rule Updates

March – Supplementing Fraud Detection Standards for WEB Debits

Effective on March 19, 2021, the rule change is intended to enhance quality and improve risk management within the ACH Network by supplementing the fraud detection standard for Internet-initiated (WEB) debits. ACH originators of WEB debit entries have always been required to use a “commercially reasonable fraudulent transaction detection system” to screen WEB debits for fraud. The existing screening requirement is supplemented by this change to make it explicit that “account validation” is part of a “commercially reasonable fraudulent detection system”. The supplement requirement would apply to the first use of an account number or changes to the existing account. 

June – Supplementing Data Security Requirements for Large Originators, Third-Party Service Providers and Third-Party Senders (Phase 1)

Effective on June 30, 2021, this change to the Rules is intended to enhance quality and improve risk management within the ACH Network by supplementing the existing account information security requirements for large-volume Originators and Third-Parties. Participants are required to protect deposit account information collected for or used in creating ACH transactions by rendering it unreadable when it is stored electronically. 

This change will be implemented in two phases:

  • The rule initially applies to ACH originators, TPSPs and TPSs with ACH volume of 6 million transactions or greater annually. An ACH originator, TPSP or TPS that originated 6 million or more ACH transactions in calendar year 2019 would need to be compliant by June 30, 2021.
The second phase would apply to ACH originators, TPSPs and TPSs with ACH volume of 2 million transactions or greater annually in the 2020 calendar year and compliance is required by June 30, 2022.

June – Limitation on Warranty Claims

Effective June 30, 2021, this change to the Rules limits the length of time in which an RDFI is permitted to make a claim against the ODFI's authorization warranty

  • For an entry to a non-consumer account, the time limit is one year from the settlement date of the entry. This is similar to the one-year rule in UCC4-406 that applies to checks charged to accounts.
For an entry to a consumer account, the limit covers two time periods. Two years from the settlement date of the ACH entry. This period exceeds the one-year in the EFT Act (Regulation E).

June – Reversals

Effective June 30, 2021, this Rule change addresses improper uses of reversal and provides for enforcement capabilities in the event of egregious violations of the Rules. The Rule also spells out that beyond the current use of 'REVERSAL' in the ACH batch description field, the format of the reversal must be identical to the original entry including the amount. Originators are allowed flexibility to accommodate minor variations in the batch header Company Name field for tracking purposes. The RDFI is permitted to return of an improper REVERSAL using return code R11 for consumer accounts and R17 for non-consumer accounts and expands returns to be permissible due to 'wrong date'.

September – Meaningful Modernization

Effective September 17, 2021, this is a grouping of five Rules, which:

  • Explicitly define the use of standing authorization for consumer ACH debits. Standing Authorization is a new term defined by Nacha as an advance authorization by a consumer of future debits at various intervals. Under a Standing Authorization, future debits can be initiated by some further action of the consumer for a one-time entry that is separate from the recurring entries. A Standing Authorization can be obtained from the consumer either orally or in writing and the one-time entry or entries initiated by the further action are known as 'Subsequent Entries'. Individual subsequent ACH entries can be initiated in any manner as identified in the Standing Authorization.
  • Define and allow for oral authorization of consumer ACH debits beyond telephone calls.
2022 - Upcoming NACHA Rules

March – Increasing Same Day ACH Dollar Limits

This rule will continue to expand the capabilities of Same Day ACH. Increasing the Same Day ACH dollar limit to $1 million per payment is expected to improve Same Day ACH use cases, and contribute to additional adoption.

June – Supplementing Data Security Requirements (Phase 2)

This rule supplements previous ACH Security Framework data protection requirements by explicitly requiring large, non-FI Originators, Third-Party Service Providers and Third-Party Senders to protect deposit account information by rendering it unreadable when it is stored electronically.

  • Implementation began with Phase 1 which applies to those with ACH volume of 6 million transactions or greater annually. Phase 2 applies to those with ACH volume of 2 million transactions or greater annually.

September – Third-Party Sender Roles and Responsibilities

The overarching purpose of these Rules is to further clarify the roles and responsibilities of Third-Party Senders in the ACH Network by

  • Addressing the existing practice of Nested Third-Party Sender relationships, and
  • Making explicit and clarifying the requirement that a TPS conduct a Risk Assessment.

The two Rules will become effective September 30, 2022, with a 6-month grace period for certain aspects of each rule.