ACH Processing – Information about ACH Processing
ACH, also known as the Automated Clearing House Network, exists to facilitate the electronic transfer of funds between individuals and businesses. In ACH processing, accounts are identified by the routing number assigned by a bank and individual account designation. The network has two main managers, the Federal Reserve and the EPN, also known as Electronic Payment Network. A client can authorize a network credit or debit orally. Authorizations need to include a digital signature or personalized identification number when the transfer of funds relates to a consumer debit transaction. With each network transaction, an addenda record shows information capable of identifying clients or payment data to the recipients.
ACH processing may involve a direct debit. Direct debits are authorized by clients to allow disbursements to authorized recipients who request them. This is a common process used in the automatic debit payments that people can set up to pay for their monthly utilities bills. Some people authorize a set amount to be debited. Automated billing allows people to be on time paying their bills and avoid late fees. Vendors receive their payments on time and uninterrupted service continues uninterrupted. A memo posting may appear to show that a transaction is in process but has not cleared yet. Banks sometimes place temporary limits on the amount that can be withdrawn from an electronic deposit.
Direct deposit of payroll is now a common, useful ACH processing option. Employees only need to fill out and sign a form approving the transfer of funds and provide their bank account and routing numbers. This option saves employees a great deal of time. They don’t have to use their lunch hours or gas money to go to the bank personally to deposit their checks. They also usually have a very short wait time until funds are verified if they are not verified immediately. The organization responsible to watch over all of the electronic transfer network activities is NACHA, the National Automated Clearing House Association. NACHA also sells and distributes financial publications and financial education.
According to ACH processing rules, no bank or credit union can offer a credit or debit within the network without the permission from the parties involved. It varies upon what network transfer is occurring, but the giver must authorize how much money may be transferred, how often, and to whom is authorized to receive it. Depending on the transfer type, oral, written, or digital verification may be required. Electronic fund transfer authorizations have to offer clients terms that are agreed to by the client before transactions can occur and be confirmed.
Please contact a rep at www.nationalprocessing.com for any help or concerns or call 800-720-3323.
