Overview
What is ACH?
An ACH (Automated Clearing House) payment is an electronic exchange of funds between accounts at different banks through the ACH network, where one bank originates the transfer (referred to as the Originating Depository Financial Institution, or ODFI) and the other bank receives the transfer (referred to as the Receiving Depository Financial Institution, or RDFI).
The transaction details are validated and formatted in batch files according to Nacha rules. Files are then sent to the ODFI via SFTP, where the ODFI will again validate the files, offset the transfers to the customers' accounts, and forward the batch files through the ACH network to the RDFI.
After the RDFI receives the batch files, the debits and credits are applied to the source or recipient accounts respectively. Settlement typically takes place at the end of the day of the scheduled ACH transaction.
Electronic payments through the Automated Clearing House network are cost effective, while still providing the benefit of both security and efficiency. ACH funds transfers are a reliable and universally accepted payment solution that connectFi supports both through API endpoints and through SFTP file transfers to custom fit your business needs.
Customers can originate both debits and credits through the ACH network. An ACH debit is initiated (or originated) by the recipient, and "pulls" the money from the sending account. Examples of ACH debits are utility bill, credit card or loan payments. An ACH credit is initiated (or originated) by the sender, and "pushes" money into the receiving account. Examples of ACH credits are payroll payments, such as direct deposit paychecks and income tax refunds.
For the purpose of this documentation, the terms "payment", "transaction", and "funds transfer" are used interchangeably for both the ACH API payments solution and the ACH SFTP file transfer solution. "File transfer" refers to the process by which a CSV file is delivered by you (the client) into a designated SFTP folder secured by an SSH-RSA key pair when you choose to utilize the ACH SFTP file transfer solution.
The ACH API (Application Programming Interface) solution provides full featured, easy to integrate access to ACH payments through multiple endpoints. This solution is the best option if:
- your system supports API endpoint calls,
- you prefer the ability to receive immediate status updates through webhook calls,
- you prefer on demand access to query or search ACH payments that you have initiated,
- you prefer on demand access to your return rates data to insure that your ACH return rates remain in compliance with NACHA rules
Our ACH SFTP file transfer solution provides the ability to submit batch ACH payments through CSV files. This solution is the best option if:
- your system does not support API endpoint calls,
- you prefer the ability to submit ACH payments in batches
Processing Times
Transactions can be scheduled Same Day (request must be received by 9:30 AM CST either by API or by file upload), Next Day (request must be received by 7:30 PM CST either by API or by file upload), or Future Dated (up to 10 business days in advance). Settlement typically takes place at the end of the effective date of the scheduled ACH transaction.
| Payment Scheduled | Description |
|---|---|
| Same Day | Same Day ACH requests that are received prior to 9:30 AM CST (Monday-Friday) will be processed and made available that same day. The effective date should be listed as the current date (same day). |
| Next Day | The effective date of a Next Day ACH is the day after the request is received (either by API call or by SFTP file transfer), as long as the request is received prior to 7:30 pm CST, Monday-Friday. If the request is received after this cut-off time, then the effective date will be the following business day. |
| Future Dated | Future-dated requests received by 7:30pm CST, Monday-Friday will be processed and made available on the effective date listed in the ACH request. Transactions may be scheduled up to 10 days in advance. |
Processing Schedule
Transactions can be processed on most federal holidays (special pricing may apply). Next-Day ACH requests received by the 7:30 pm CST cut off time will be forwarded to the next day to process (except for Saturdays and Christmas Day). ACH files are not processed on Saturdays nor on Christmas Day.
Transfer Amount Limits
The maximum amount sent per single ACH transaction must be less than or equal to the total available account balance. It is your (the client's) responsibility to ensure that the amount available in your settlement account is appropriate to fund your requested transactions. In addition, Same Day transfers are limited to an amount of $1,000,000 or less.
Standard Entry Class Codes
| SEC Code | ACH Application | Single/Recurring | Debit/Credit | Consumer/Corporate | Additional Fields Required | Fields Not Allowed |
|---|---|---|---|---|---|---|
| "ARC"* | Accounts Receivable Entries | Single | Debit | Consumer to Corporate | companyEntryDescription, checkSerialNumber | addenda05, terminalCity, terminalState, identificationNumber |
| "BOC"* | Back Office Conversion | Single | Debit | Consumer to Corporate | companyEntryDescription, checkSerialNumber | addenda05, terminalCity, terminalState, identificationNumber |
| "CIE" | Customer Initiated Entries | Single | Credit | Consumer to Corporate | identificationNumber, companyEntryDescription | terminalCity, terminalState, checkSerialNumber |
| "CCD" | Corporate Credit or Debit | Single or Recurring | Credit or Debit | Corporate to Corporate | companyEntryDescription | terminalCity, terminalState, checkSerialNumber |
| "CTX" | Corporate Trade Exchange | Single or Recurring | Credit or Debit | Corporate to Corporate | companyEntryDescription | addenda05, terminalCity, terminalState, checkSerialNumber |
| "POP" | Point of Purchase | Single | Debit | Corporate to Consumer/Corporate to Corporate | checkSerialNumber, terminalCity, terminalState | addenda05, identificationNumber |
| "PPD" | Pre-arranged Payment or Deposit | Single or Recurring | Credit or Debit | Corporate to Consumer | companyEntryDescription | terminalCity, terminalState, checkSerialNumber |
| "RCK" | Re-presented Check Entries | Single | Debit | Corporate to Consumer | "companyEntryDescription": "REDEPCHECK", checkSerialNumber | addenda05, terminalCity, terminalState, identificationNumber |
| "TEL" | Telephone Initiated Entries | Single or Recurring | Debit | Corporate to Consumer | companyEntryDescription | addenda05, terminalCity, terminalState, checkSerialNumber |
| "WEB" | Internet-Initiated/Mobile Entries | Single or Recurring | Credit or Debit | Corporate to Consumer | companyEntryDescription | terminalCity, terminalState, checkSerialNumber |
*Origination of these SEC codes requires additional approval