What is ACH? An Intro to NACHA and Automated Clearing House Payments

The National Automated Clearing House Association (NACHA) is a not for profit trade association that develops operating rules and business practices for the national network of automated clearing houses (ACHs) and for other regions of electronic payments. NACHA manages the development, management, and governing of the ACH Network and is the countrywide association responsible for ACH payments.

ACH Network = The Center of Commerce

NACHA describes the ACH Network as, “at the center of commerce in the U.S., moving money and information from one bank account to another through Direct Deposit and Direct Payment via ACH transactions, including ACH credit and debit transactions; recurring and one-time payments; government, consumer and business-to-business transactions; international payments; and payments plus payment-related information.”

The ACH Network is one of the largest, safest, and most reliable payment systems in the world. NACHA and the ACH Network move $43 trillion each year, which is made up of more than 25 billion electronic financial transactions, including Direct Deposit via ACH, Social Security and government benefits, electronic bill payments such as utility and mortgage payments, and person-to-person (P2P) and business-to-business (B2B) payments. The ACH Network enables innovation by universally connecting all U.S. financial institutions and moving money and information directly from one bank account to another.

Same Day ACH

NACHA adopted a Rule to provide a new, ubiquitous capability for moving ACH payments faster. The Rule will enable ACH Originators the option to send same-day ACH transactions to accounts at any receiving financial institution (RDFI). The Rule includes a “Same Day Fee” on each Same Day ACH transaction so that RDFIs would recover, on average, their costs for enabling and supporting Same Day ACH. Virtually all types of ACH payments, including both credits and debits, will be eligible for same-day processing. Only international transactions (IATs) and high-value transactions above $25,000 will not be eligible.

With ACHeck21 payment processing services, same day ACH transactions received before noon CST provide available funds on the day of deposit. Whether you are sending payroll or deducting rent payments from tenants, your funds can be available the same day.

Benefits of Same Day Automated Clearing House Payments

  • Expedited payout of insurance claim payments, disaster assistance payments, and other refunds and reimbursements
  • Faster payments for payroll and invoices
  • Quicker collection of funds for check conversion
  • Faster payment of bills on or after the due date

The Broader Role of NACHA

In addition to administering the ACH Network, NACHA support the broad payments industry. NACHA unites payments systems stakeholders and fosters dialogue through the Payments Innovation Alliance, accreditation programs, conferences, and educational offerings. The association also brings together diverse organizations to develop rules and standards to benefit a variety of payments ecosystem participants, including Electronic Benefits Transfer (EBT), and healthcare Electronic Funds Transfer (EFT) and other industry groups.