Posted by NationalACH on Jul 14, 2010

Overview of the ACH Network

The automated clearinghouse network is also known as ACH.  The ACH network is a highly reliable and efficient nationwide batch oriented electronic funds transfer system. 

ACH is governed by operating rules of NACHA which provide guidance for interbank clearing of electronic payments for participating depository financial institutions.

The ACH network has been in service for over 40 years.  It is one of the most reliable payment processing systems in the world.

ACH payments are used for direct deposit of payroll, Social Security and other government benefits, tax refunds, payment of consumer bills, business-to-business payments, electronic checks, e-commerce payments, and for wide range of applications for electronic funds transfer.

Participants in the ACH Network

There are four parts of the ACH network.

  1. Originator.  An originator is an individual corporation or other entity that initiates and trees into the ACH network.
  2. Originating Depository Financial Institution (ODFI) that originates an ACH transaction.
  3. Receiving Depository Financial Institution (RDFI) that receives ACH entries.
  4. Receiver.  The receiver is an individual corporation or other entity that has authorized ACH transaction.


For more information on ACH processing, contact