The automated clearinghouse (ACH) is a nationwide mechanism that processes electronically
originated batches of credit and debit transfers, enabling funds to be debited from
a customer’s bank account and deposited into a merchant’s account for services rendered
or goods sold.
The Federal Reserve Banks are collectively the nation’s largest automated clearinghouse
operator, processing more than 80 % of commercial interbank. For over 30 years
the ACH network has been available as a payment option for consumers. According
to NACHA (National Automated Clearing House Association) in 2004 there were more
than 12 billion ACH payments made worth $28.7 trillion. The majority of consumers
understand that electronic payments are safe, secure and convenient.
More and more consumers are requesting the benefits of ACH payments:
- saves time
- easier than writing a check
- convenience
- no postage required
- eliminates late fees
- credit rating protection
SecureNet Payment Solutions and ACH
SecureNet Electronic Check Services and SecureNet Collect Direct are our ACH payment processing products,
SecureNet Gateway is the engine, and SecureNet Virtual Terminal is a tool that works in
conjunction with the ACH network to process payments securely and efficiently.
Smaller merchants will use the SecureNet Virtual Terminal to process ACH payments, while
larger merchants, software companies, and ISPs may choose integrate directly with
the SecureNet Gateway to process transactions. The ACH network is used for both
one time payments and recurring payments.
SecureNet's ACH products comply with NACHA regulations. NACHA (National Automated
Clearing House Association) develops operating rules and business practices for
the Automated Clearing House (ACH) Network and for electronic payments.
ACH Flow
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Originator - Any individual, corporation or other entity that initiates entries into the ACH Network
Originating Depository Financial Institution (ODFI) - A participating financial institution that originates ACH entries at the request of and by (ODFI) agreement with it's customers.
Receiving Depository Financial Institution (RDFI) - Any financial institution qualified to receive ACH entries.
Receiver - An individual, corporation or other entity who has authorized an Originator to initiate a credit or debit entry to a transaction account held at an RDFI.
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About Check 21
The Check Clearing for the 21st Century Act (Check 21) was signed into law on
October 28, 2003, and became effective on October 28, 2004. Check 21 is designed
to foster innovation in the payments system and to enhance its efficiency by reducing
some of the legal impediments to check truncation. The law facilitates check truncation
by creating a new negotiable instrument called a substitute check, which permits
banks to truncate original checks, to process check information electronically,
and to deliver substitute checks to banks that want to continue receiving paper
checks. A substitute check is the legal equivalent of the original check and includes
all the information contained on the original check. The law does not require banks
to accept checks in electronic form nor does it require banks to use the new authority
granted by the Act to create substitute checks.
Check 21 facilitates significant change in the way checks are processed in the
United States, exchanging electronic images of checks with is faster and more efficient
than physically transporting paper checks. All banks are affected by this
law even if they do nothing to change their current check processing operations.
All customers (consumers and businesses) are affected by the Check 21 Act in that
they have the potential to receive a substitute check.
