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Automated Clearing House (ACH)
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The Other Players in ACH

Originator

Any individual, corporation or other entity (merchant) that initiates entries into the Automated Clearing House Network.

Originating Depository Financial Institution (ODFI)

A participating financial institution (merchant processing bank) that originates ACH entries at the request of and by (ODFI) agreement with it's customers. ODFI's must abide by the provisions of the NACHA Operating Rules and Guidelines.

Receiving Depository Financial Institution

Any financial institution qualified to receive ACH entries (check writer's bank) that agrees to abide by the NACHA Operating Rules and Guidelines.

Receiver

An individual, corporation or other entity (Check writer) who has authorized an Originator to initiate a credit or debit entry to a transaction account held at an RDFI.

History of ACH

First introduced in the early 1970s as a more efficient alternative to checks, ACH has evolved into a nationwide mechanism that processes electronically originated credit and debit transfers for any participating institutions nationwide. The ACH is a rapidly growing alternative to paper checks and handles billions of payments annually. Fed ACH is the Federal Reserve's centralized application software used to process ACH payments.

The Automated Clearinghouse (ACH) Network is used by more than 20,000 participating financial institutions, over 725,000 corporations, and millions of consumers. In the twenty-five years since its inception, the ACH Network has grown to a national payments system processing over four billion payments annually. In 1998, nearly 5.3 billion ACH transactions were processed with a total value of more than $16 trillion. In 1999, more than 6.2 billion ACH transactions, valued at over $19.4 trillion, were transmitted through the network.

The Operating Rules of the National Automated Clearing House Association (NACHA) specify the formats for ACH transactions and define the rights, obligations and warranties of parties involved in ACH transactions.

Automated Clearing House (ACH) Resources

These companies can provide some of the different ACH services like Electronic Check Conversion (ECC), Returned Check Collection (RCK), Lock Box check conversion (ARTC), and Check Truncation:

• Electronic Clearing House, Inc. (ECHO)
• E-Tran, Inc.
• CrossCheck, Inc.
• Thompson Merchant Services

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