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Advanced ACH Advanced ACH ConceptsConceptsHoward N. Forman, AAPSenior Vice PresidentElectronic Payments Consultant
ACH transactions can be either credits or debits ACH credits send funds from the Originator to the Receiverg ACH debits pull funds from the Receiver to the Originator
Financial settlement occurs simultaneously for all parties to the transaction
Can initiate transactions to consumer or business accounts
Some transactions allow the inclusion of remittance f (“ dd d ”)information (“Addenda”)
The ACH file: Standard Entry Class (SEC) Codes – define the type of
transactions within a Batchtransactions within a Batch Effective Entry Date – the date on which you want
transactions to settleT ti C d d fi d bit / dit d t t Transaction Codes – define debits/credits and account type receiving the payment Some data elements are required to be displayed on the
Obj ti Objectives: Enhance ACH clearing schedules Reduce ACH “direct exchanges” between FIsReduce ACH direct exchanges between FIs Reduce risk through accelerated return item receipt
Only certain consumer debit transactions eligibleOnly certain consumer debit transactions eligible ARC/POP/BOC/WEB/TEL
2:00 p m ET input deadline for same-day 2:00 p.m., ET input deadline for same day availability
Service based on voluntary FI participation Both ODFI and RDFI must “opt in”Both ODFI and RDFI must opt in Premium priced service for ODFIs Financial incentive for RDFIs
Service does NOT create a real-time service with immediate settlement
Service currently does NOT address ACH credittransactions or B2B transactions
Leverages the ACH Network for Electronic Bill Presentment and Payment (EBPP) Allows Billers to:
U ili ACH f d l d di EBPP Utilize ACH formats and rules to standardize EBPP transactions Enroll their customers in e-Bill deliveryy Deliver summary e-Bills to their customers’ on-line
banking serviceR i h i d ACH di f bill Receive authorized ACH credits for bill payments
Centralized “biller directory” contains required data
Provides you with a unique Wells Fargo payment identification number/range to use in lieu of your de t cat o u be / a ge to use eu o youWells Fargo bank account number
Automate/improve the accuracy of receivables posting:
Assign a unique identifier to each payment Originator/sender (for example, a vendor number)
Senders can embed invoice and/or customer numbers within the identifier
Identifier provided on data file and/or on-line reports Identifier provided on data file and/or on-line reports
Use for incoming ACH credits, debits, and wire transfers
W ll F “ ” t b il bl Wells Fargo “proxy” account number range available for Acme’s use: 24680000000000000 – 24689999999999999
Acme Products provides a proxy account number to its Acme Products provides a proxy account number to its trading partners. For example: Customer/Vendor #566455 – 24680000000566455
Customer/Vendor #874522 24680000000874522 Customer/Vendor #874522 – 24680000000874522 Example with embedded customer/vendor number AND
On-line via Commercial Electronic Office® (CEO®) portal
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International payments - IAT
What is “IAT?” New SEC Code (as of 9/2009) used to identify inter-New SEC Code (as of 9/2009) used to identify inter
national transactions flowing through the US ACH NetworkB d d fi iti f “I t ti l ACH T ti ” Broadens definition of “International ACH Transaction” An ACH entry that is part of a payment transaction involving a
financial agency’s office that is not located in the territorial j i di ti f th U it d St tjurisdiction of the United States
Why IAT? Additional information is needed to permit scrutiny of
Add the BSA Travel Rule information to allow identification of all parties to the transaction
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International payments - IAT
Who might be impacted by IAT? Non-U.S. headquartered companies with U.S. operationsNon U.S. headquartered companies with U.S. operations U.S. companies with employees, pensioners, customers,
and/or vendors located outside the U.S. U.S. companies receiving ACH credits from offshore
entities Third-party processors or payment aggregatorsThird party processors or payment aggregators
Where can I get more information about IAT?
n http://www.nacha.org/IAT_Industry_Information/(look for “IAT Corporate Toolkit”)