Automated Clearing House ( ACH ) is an electronic network for financial transactions in the United States. ACH processes credit and debit transactions in large volumes. ACH credit transfers include direct deposit payments, payroll and vendor payments. Direct ACH debit transfers include consumer payments on insurance premiums, mortgage loans, and other types of bills. Debit transfers also include new applications such as a check check conversion (POP) check check program sponsored by the National Clearing House Association (NACHA). Both government and commercial sectors use ACH payments. Businesses are increasingly using ACH online to make paying customers, rather than via credit or debit cards.
ACH is a computer-based clearing and settlement facility established to process electronic transaction exchanges between participating storage institutions.
The rules and regulations governing the ACH network are established by NACHA and the Federal Reserve. By 2015, the network processes nearly 24 billion transactions for a total value of $ 41.6 trillion. Credit card payments are handled by a separate network.
The Federal Reserve Banks, through the FedACH system, is collectively the largest ACH operator in the country. In 2005, they process 60% of ACH transactions between commercial banks; The remaining 40% is processed by the Electronic Payment Network (EPN), the only US private sector ACH operator. EPN and Reserve Bank rely on each other to process multiple transactions when one party in the transaction is not their customer. This interoperator transaction is completed by the Reserve Bank.
Video Automated Clearing House
Use of ACH payment system
- The treasury bank management department sells this service to business and government customers
- Business-to-business payments
- Direct debit payment of consumer charges such as mortgages, loans, utilities, insurance premiums, leases, and other routine payments
- Direct payroll, Social Security, and other government payments, and tax returns
- Ecommerce payments
- Payment of state, state and local taxes
- Indirect fund transfers between accounts at different financial institutions (when real-time transfers are required, wire transfers using systems like Fedwire Federal Reserve are used instead)
Maps Automated Clearing House
SEC code
Some Common Class Entry Class (SEC) code: AT
- ARC
- Accounts receivable conversion . Consumer checks are converted to a one time ACH debit. The difference between ARC and POP is that ARC can be generated from checks sent when POP is done directly.
- BOC
- Back office conversions . Single entry entries begin at the point of purchase or at the location of a manned bill payment to transfer funds via conversion to ACH debit entries during back office processing. Unlike ARC entries, BOC conversions require that customers be present, and that vendors post checking notifications that can be converted to BOC ACH entries.
- CBR
- Corporate cross-border payments . Used for international business transactions, replaced with SEC Code IAT .
- CCD
- Company Credit or Debit Entry . Used to consolidate and set aside cash in an entity controlled account, or make/collect payments to/from other corporate entities.
- CIE
- Customer-Initiated Entries . Use is limited to credit applications where the consumer initiates a transfer of funds to the company for payment of funds owed to the company, usually through some type of home banking product or bill payment service provider.
- CTX
- Trade company exchange . Transactions that include ASC X12 or EDIFACT information.
- DNE
- Death notification entries . Issued by the federal government.
- IAT
- ACH International Transactions . This is the SEC code for cross border payment traffic to replace PBR and CBR code . The code has been implemented since 18 September 2009.
- PBR
- Consumer border payments . Used for international household transactions, replaced by SEC Code IAT.
- POP
- Point-of-purchase . Checks provided directly to merchants for purchase are presented as ACH entries and not physical checks.
- POS
- Point-of-sale . Debit in an electronic terminal that begins with a plastic card. An example is using your debit card to buy gas.
- PPD
- Pre-arranged payments and deposits . Used to credit or debit consumer accounts. Popular used for direct payroll and pre-authorization bill payments.
- RCK
- Representation check entries . The physical examination presented but refunded because insufficient funds can be represented as ACH entries.
- TEL
- Entry initiated by phone . Oral authorization by phone to issue ACH entries like checks by phone. (TEL code is allowed for incoming phone orders only NACHA prohibits the use of this code for outgoing calls unless previous business arrangements with customers have been set.)
- WEB
- Web-initiated entries . Electronic Authorization via Internet to create ACH entries.
- XCK
- Crash check entries . A physical inspection destroyed by a disaster can be presented as an ACH entry.
See also
- Clearing (finance)
- House clearing (finance)
- The Clearing House Association
- Electronic funds transfer
- Wire transfer
- Directo a MÃÆ' Â © xico
- Derived from a Depository Financial Institution
- Pan-European auto-clearing house
- Universal Payment Identification Code
References
External links
- NACHA, Electronic Payment Association
- ACH Rules Online
- Electronic Payment
- The Federal Reserve Payment System
- Intro to ACH Network
- Search for Federal Reserve ACH Number
- Rule E
- ACH & amp; Return Code Explanation
- ACH Terms and Definitions
- ACH vs Credit Card
- Report to Congress on Using an Automatic Clearinghouse System for Remittance Delivery to Foreign Countries
- ACH Transaction Solutions International Center (IAT)
- ACH Payment Integration | ACH API
Source of the article : Wikipedia
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