The Automated Clearing House (ACH) Network is a highly reliable and efficient nationwide batch-oriented electronic funds transfer system governed by NACHA's Operating Rules which provide for the interbank clearing of electronic payments for participating depository financial institutions. The American Clearing House Association, Federal Reserve, Electronic Payments Network, and Visa act as ACH Operators, central clearing facilities through which financial institutions transmit or receive ACH entries. ACH payments include:
- Direct Deposit of payroll, Social Security and other government benefits, and tax refunds
- Direct Payment of consumer bills such as mortgages, loans, utility bills and insurance premiums
- Business-to-business payments
- eCommerce payments
- Federal, state and local tax payments.
The volume of ACH payments in 2007 was over 18 billion.
Any individual, corporation or other entity that initiates entries into the Automated Clearing House Network
Originating Depository Financial Institution (ODFI):
A participating financial institution that originates ACH entries at the request of and by (ODFI) agreement with its customers. ODFIs must abide by the provisions of the NACHA Operating Rules and Guidelines
Receiving Depository Financial Institution (RDFI):
Any financial institution qualified to receive ACH entries that agrees to abide by the NACHA Operating Rules and Guidelines
An individual, corporation or other entity that has authorized an Originator to initiate a credit or debit entry to a transaction account held at an RDFI.