Please be advised that the information and recommendations in regard to best practices offered herein are not to be construed as legal advice or guidance. ACH Processor does not warrant that this information is free from inaccuracies, omissions or inconsistencies or is always current. ACH Processor accepts no responsibility or liability in regard to the utilization of this information. It is recommended that you, as an entity accepting electronic payments, consult legal counsel as appropriate in regard to the development of your business policies and practices or the preparation of materials, information or disclosures which you may provide to customers or others in support of your payment acceptance process. The term “Rules” when used herein refer to the 2012 NACHA OPERATING RULES AND REGULATIONS as published by the National Automated Clearing House Association of the US Federal Reserve. Additional information and guidance can be obtained at www.nacha.org.
Introduction
The Automated Clearing House Network is the most efficient, reliable, secure and economical funds transfer and payment system in the world. The Use of the ACH Network by businesses and organizations to collect payments, transfer funds, pay vendors or employees is a privilege and one which requires diligent adherence to the Rules of the Network. The rules of the most importance and those most highly enforced relate to the payee; the entity entering the payment into the Network (referred to as the “Originator”) having the clear and obvious permission of the payer (known as the “Receiver”) to initiate the withdrawal or deposit of funds to or from the Receiver utilizing the ACH Network. The purpose of this guide is to provide you with the fundamental and minimum requirements in regard to obtaining compliant payment authorization.
The “Effective Date”: When constructing your authorization language, whether as phone scripts, as online disclosures or as a part of your service or purchase agreements, it is important to always advise the payer of the “effective date” of the payment or withdrawal. The effective date will always be the following business banking day after the day on which you enter the payment into the ACH Processing System. This is the day when the payer will see that the funds have been withdrawn from their bank account. In order for the payment to have an effective date of the following banking day, the item must be entered into the ACH System System before 4:30 PM Arizona Time on the prior banking day. For example, if you are accepting a payment after 4:30 PM AZ Time the on a Monday, and Monday is not a bank holiday, the effective date of the payment will be the following Wednesday.
If ACH Payments are an important element of your business or organization, it is highly recommended that you obtain and study a copy of the most recently published NACHA Operating Rules & Guidelines, Corporate Edition. This publication can be purchased as a book or CD by visiting www.nacha.org.
