ACH Processing

As an industry leader in Automated Clearing House (ACH) payment processing solutions, Actum offers fast, secure, and reliable electronic funds transfers for merchants and software partners. While we’ve specialized in ACH processing for over 20 years, we realize that ACH is a complex topic for those learning it.

Businesses approach us every day with questions about how ACH processing can best work for them. We understand that the industry terminology can be a bit confusing, so we’ve reinterpreted the standard definitions provided by NACHA and other industry leaders into plain English for you.

With several of the following definitions, we’ve included links to references that you can access for additional information.

ACH Payment Processing Glossary

ACH – Stands for “Automated Clearing House”. ACH is a common form of payment (or electronic funds transfer) only available in the United States. Read More >

ACH Credit – An ACH transaction where funds are deposited into a Receiver’s account. Read More >

ACH Debit – An ACH transaction where funds are withdrawn from a Receiver’s account. Read More >

ACH Entry – Used to describe a single transaction submitted to the ACH Network.

ACH Network – The electronic network where ACH Entries are settled between participating depository financial institutions (banks and credit unions). Read More >

ACH Operator – The “Clearing House” where participating depository financial institutions automatically settle ACH Entries. There are only two: The Federal Reserve (FedACH) and the Electronic Payments Network (EPN).

ACH Return Code – One of 85 possible reasons for disputing (or returning) an ACH Entry. The ACH Return Code must accompany each return that is submitted by the RDFI. Read More >

Batch Processing – The system of aggregating multiple ACH Entries into “batch” files before they are transmitted between Third-Party Senders, ODFIs, RDFIs, and the ACH Operator.

NACHA – Stands for “National Automated Clearing House Association”. NACHA is a governing body that establishes and enforces the processes and rules for ACH transactions. Read More >

ODFI – Stands for “Originating Financial Depository Institution”. ODFIs are the banks and credit unions that directly submit ACH Entries to the ACH Operator.

Originator – A business (or entity) that receives authorization from the Receiver to initiate an ACH Credit or Debit transaction. Read More >

RDFI – Stands for “Receiving Depository Financial Institution”. RDFIs are the banks and credit unions that receive ACH Entries from the ODFI via the ACH Operator. RDFIs can also dispute (or return) ACH Entries by submitting an ACH Return Code to the ODFI via the ACH Operator. Read More >

Receiver – A person or business that gives authorization to the Originator to initiate an ACH Credit or Debit transaction on their behalf.

Return – An ACH Entry that is rejected by the RDFI. Read More >

Settlement Period – Also referred to as “Settlement Time”. A predetermined number of days that Debit funds are held by the ODFI or the Third-Party Sender, to account for funds that may be returned to the RDFI. Remaining funds will be deposited into the Originator’s operating account at the end of the settlement period. Read More >

Third-Party Sender – An intermediary, also known as a Third-Party Processor, between the Originator and the ODFI that processes ACH transaction data on the Originator’s behalf. Read More >

ACH Payments Made Simple

Our team at Actum is equipped to provide integrated ACH processing that simplifies the user experience. Learn more in our post, ACH Payment Processing for Businesses: A Comprehensive Overview.

Or, Contact Us to discuss how ACH payment processing can help your business save time and money.

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