Digital Payment System   ACH
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Digital Payment System ACH

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This file contains a description of NACHA's

This file contains a description of NACHA's

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Digital Payment System   ACH Digital Payment System ACH Presentation Transcript

  • Digital Payment SystemNACHA Automated Clearing House Fan Lu
  • NACHA Automated Clearing House (ACH) ProcessBusiness Context Diagram 60% Federal Reserve Banks (FedACH) ACH Transactions Volume Split Either Debit or Credit 40% Electronic Payment Network Live (EPN) Live Prenote Return Prenote Return Prenote Zero $ Live Zero $ Live ODFI RDFI (Originating Depository FI) Bank Files Bank Files (Receiving Depository FI) ID: Routing Number DD Memo Files DD Memo Files ID: Routing Number DD Posting Files DD Posting Files GL Posting Files GL Posting Files Report Files Report Files OID: Account Number RID: Account Number Payment Accounting Accounting Instructions Advice & Payment Instructions Advice & Reports Reports Company Issuing Instructions Originator Payee and Bank Account Info Receiver Credit or Debit Initiate ACH Amount Receive Account Transactions Schedule and Dates Debit or Credit Actions Governed by NACHA Governed by NACHA Rules and Specification Rules and Specification
  • NACHA ACH Interaction Diagram Originator ODFI ACH Gateway RDFI Receiver Payment Instructions Warehousing Origination Release Receiving (On Us) Posting Return (Non-posted) Return Notice & Payment Advice Advice Governed by NACHA Governed by NACHA Rules and Specification Rules and Specification
  • NACHA Key Dates and Timeline NACHA Key Dates and Timeline Payment Credit Debit Effective Supplied Instruction Release Release Entry Settlement Date Date Date Date Date Payment Instruction Date: The date of issuing payment instructions by Originator Credit Release Date: The date of ACH credit payment released to the ACH network, which can be as old as 2 days before Effective Entry Date Debit Release Date: The date of ACH debit payment released to the ACH network, which can be as old as 1 day before Effective Entry Date Effective Entry Date: The most common date used to distribute the originated work Supplied Settlement Date: The date Fed will post funds to RDFI’s bank account with Fed Governed by NACHA Governed by NACHA Rules and Specification Rules and Specification
  • NACHA File Structure and Types of Transaction Records Each Physical File contains 1 or many Logical Four Types of Transaction (Detail) Records: Files 1. Return: No posted entry being returned Each Logical File contains 1 or many Batches 2. Normal (Live): Standard and normal entry Each Batch contains 1 or many Detail Records 3. Prenote: Memo posting entry Each Detail Record may have 0 or 1 Addenda 4. Zero Dollar Live: Zero dollar entry, needed for Record EDI data exchange NACHA Logical File Structure (Bridged Version) File 1 File ID Identification of Sender Identification of Receiver Header Batch Company ID and Description of Standard Entry Effective Entry Supplied 5 ODFI Header Name Entries Class Date Settlement Date Individual Addenda Detail Transaction Individual Individual Trace # 6 RDFI Account Amount Record Record Code ID Name of Entry Number Indicator Addenda 7 Additional Data IAT required Addenda Correspondent Addenda Record Batch 8 Batch control totals Dollar amount Item count Hash total Trailer File 9 File control totals Dollar amount Item count Number of batches Hash total Trailer ACH File is organized in multiple fixed length records of 94 characters Governed by NACHA Governed by NACHA Rules and Specification Rules and Specification
  • NACHA SEC (Standard Entry Class) CodesBatch Record Level PPD: Prearranged Payments and ACK: Acknowledge Entry for CCD CTX: Corporate Trade Exchange Deposit (Consumer Payment and Payment Deposits ADV: Automate Accounting Advice DNE: Death Notification Entry RCK: Represented Check Entries RET: Automated Returns (generated by ARC: Account Receivable ENR: Automated Enrollment Entry ACH) ATX: Acknowledgement Entry for CTX IAT: Cross Border ACH Entries SHR: Shared Network Transactions payment CBR: Corporate Cross Border MTE/SHR: Machine Transfer Entry TEL: Telephone Electronic Debit (obsolete and replaced by IAT) (ATMs) CCD: Cash Concentration or PBR: Consumer Cross Border TRC/TRX: Truncated Entry and Disbursements (DTCs) (obsolete and replaced by IAT) Truncated Entry Exchange CIE: Customer Initiated Entries (home POP: Point of Purchase WEB: Internet Initiated Entry banking) COR: Automated Notification of Change and Automated Refused POS/SHR: Point of Sale Entry (POS) XCK: Destroyed Check Entry Notification of Change Governed by NACHA Governed by NACHA Rules and Specification Rules and Specification
  • NACHA Transaction Codes (Trans Codes)Detail Record Level General Account Type DDA Saving Loan Ledger Index 20 30 40 50 1 Credit Return 21 31 41 51 2 Credit Live 22 32 42 52 3 Credit Prenote 23 33 43 53 Credit Zero $ 4 24 34 44 54 Live 6 Debit Return 26 36 46 56 57 7 Debit Live 27 37 47 (reversal only) 8 Debit Prenote 28 38 48 not used Debit Zero $ 9 29 39 49 not used Live Transaction Codes are set up using offsets. For example, DDA has 20 as offset. Credit entry is between Governed by NACHA Governed by NACHA 1 and 4 and Debit entry is between 6 and 9. Return, Live, Prenote and Zero $ are coded from 1 to 4. Rules and Specification Rules and Specification
  • ACH Has Four Types of Settlement Entries:1) Live, 2) Return, 3) Pre-notification, and 4) Zero Dollar EDI Four Types of ACH Settlements 1) Live Entries 3) Prenotification Transactions The live entries are the actual payroll or A prenotification transaction is a zero debit entries that flow through the ACH dollar transaction submitted to the account network and ultimately post to the account holder’s Receiving Financial Institution via holder’s account. the ACH in order to notify this entity that their customer has authorized an ACH transaction to post to his/her account. 2) Return Entries 4) Zero Dollar EDI Transactions Return entries are those transactions that NACHA has incorporated a separate set of are sent back to the originating financial transaction codes to be used with EDI institutions and/or originator after they types of transactions that include addenda have failed to post at the receiving bank. records. These transactions have zero dollar amounts but are still considered live transactions (not prenotes). Transaction Codes are set up using offsets. For example, DDA has 20 as offset. Credit entry is between Governed by NACHA Governed by NACHA 1 and 4 and Debit entry is between 6 and 9. Return, Live, Prenote and Zero $ are coded from 1 to 4. Rules and Specification Rules and Specification