NACHA includes Members in the process of establishing Rules for the ACH Network, working collaboratively to create a clear picture of participant roles and responsibilities in the following ACH transaction process.

1. An Originator– whether that’s an individual, a corporation or another entity– initiates either a Direct Deposit or Direct Payment transaction using the ACH Network. ACH transactions can be either debit or credit payments and commonly include Direct Deposit of payroll, government and Social Security benefits, mortgage and bill payments, online banking payments, person-to-person (P2P) and business-to-business (B2B) payments, to name a few.
2. Instead of using paper checks, ACH entries are entered and transmitted electronically, making transactions quicker, safer and easier.
3. The Originating Depository Financial institution (ODFI) enters the ACH entry at the request of the Originator.
4. The ODFI aggregates payments from customers and transmits them in batches at regular, predetermined intervals to an ACH Operator.
5. ACH Operators (two central clearing facilities: The Federal Reserve or The Clearing House) receive batches of ACH entries from the ODFI.
6. The ACH transactions are sorted and made available by the ACH Operator to the Receiving Depository Financial Institution (RDFI).
7. The Receiver’s account is debited or credited by the RDFI, according to the type of ACH entry. Individuals, businesses and other entities can all be Receivers.
8. Each ACH credit transaction settles in one to two business days, and each debit transaction settles in just one business day, as per the Rules.

Third-Party Service Providers also perform vital services for ACH Network users such as Originators, ODFIs, RDFIs and Receivers. When engaged and authorized, these Third-Party Service Providers can perform Network user functions, arrange transactions and otherwise increase efficiency for ACH Network participants.

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