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ACH and EFT Frequently Asked Questions

What is the ACH Network?
ACH stands for Automated Clearing House. The ACH network is a funds transfer system governed by NACHA, the Electronics Payment Association.

What is NACHA?
NACHA is the National Electronic Payments Association. NACHA is responsible for writing the ACH rules, for promoting growth of the ACH, and for educating participants of the ACH.

What types of companies offer ACH Payments?
Companies in any type of business offer ACH payment processing. Consumers now expect to be offered ACH as a payment option because. it simplifies their lives and takes the hassle out of paying bills

How will customers know the amount that will be deducted from their bank account?
The dollar amount can be fixed or variable. If the amount is fixed, the sign-up process includes an initial customer notification. If the amount varies, your company is required to send the customer a written notice of the dollar amount at least 10 days prior to the scheduled payment date or have the customer sign an authorization form to eliminate the need for the notification.

For recurring billing, how will customers know the date the payment will be deducted from their bank account?
If the payment is going to be deducted on a different date than the scheduled payment date, your company is required to send a written notice seven days prior to the scheduled date. Many companies select a day of the month, and simply state with their initial notification that if that date falls on a weekend or holiday, payment will be collected on the first business day following that date. In this case, no additional notification is required.

Who are the participants of the ACH Network?
- Originator: An originator initiates an ACH transaction against the account of a receiver pursuant to an agreement. An orginator can be either a company or an individual.
- Originating Depository Financial Institution (ODFI): An ODFI has agreed to receive payment instructions from an orginator and forward those instructions on to the ACH Operator.
- Automated Clearing House (ACH) Operator: The ACH Operator is the central clearing facility for ACH Payments. The ACH Operator can be operated by a private organization of by a Federal Reserve Bank.
- Receiving Depository Financial Institution (RDFI): The RDFI receives payment instructions from the ACH Operator and posts these payments to the account s of the receiver.
- Receiver: A receiver has agreed to allow an originator to initiate an ACH transaction against their account.
- Third Party Service Provider: A Third Party Service Provider handles any aspect of the ACH process on behalf of an originator, ODFI or RDFI.

How do ACH payments help the environment?
The average household receives approximately 19 bills and statements and makes approximately seven payments in paper form per month. By switching to electronic bills, statements, and payments, every year the average household would:
- Save 6.6 pounds of paper.
- Avoid producing 171 pounds of greenhouse gas emissions. Saving this amount of greenhouse gas emissions is the equivalent of:
- The emissions avoided by not driving 169 miles.
- The emissions avoided by not consuming 8.8 gallons of gasoline.
- Planting two tree seedlings and allowing them to grow for 10 years.
- Preserving 24 square feet of forestland.
- Avoid releasing 63 gallons of wastewater into the environment.
- Avoid using 4.5 gallons of gasoline to mail bills, statements, and payments.