![]() ![]() Nacha works closely with government agencies, including the Federal Reserve, the U.S. The role of Nacha in ACH transactionsĪCH payments and the ACH network are governed and regulated by a non-profit organization called Nacha (National Automated Clearing House Association). How common are ACH payments, you ask? Well, according to the most recent data, in the third quarter of 2023 alone, 7.8 billion ACH transactions were processed, amounting to a total value of $19.7 trillion. ![]() Over the next few decades, ACH payments evolved through technological advances and regulatory changes, as the need grew for faster, more secure, and more efficient payment methods. That’s when the ACH network was born, as a way for banks to communicate electronically for the quick and secure transfer of funds. In the 1970s, banks began to realize that dealing with the volume and rapid spread of checks, especially for business payments, was becoming a challenge. First, let’s take a look at how ACH came to be. When you make an ACH payment, data is sent by your bank to another institution within the Automated Clearing House network, and, pending their approval, the money is drawn from your account and deposited into the recipient’s bank account.ĪCH payments are often used for direct deposits, payroll, vendor payments, and consumer bills-but we’ll get into the use cases a bit later in this guide. The network provides an efficient way to directly transfer funds electronically between bank accounts-without using paper checks, wire transfers, credit cards, or cash. The ACH network is composed of banks and other financial institutions (also known as clearing houses). These payments are made through the Automated Clearing House network (ACH network for short). Also referred to as ACH transfers, ACH payments are a type of electronic funds transfer (EFT). ![]()
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