ACH - the Automated Clearing House is an electronic payment network which exchanges funds via Electronic Funds Transfer (EFT) throughout the U.S. fifty states and territories. Over 98% of the nation's banks including the Federal Reserve belong to the ACH.

ACH Associations - provide rules and guidelines for the efficient operation of the ACH Network. There are 36 regional ACH associations whose memberships include financial institutions and affiliates. NACHA, the National Automated Clearing House Association forms the governing foundation for the regional associations.

Addenda Records - records that may be attached to certain ACH entries for the purpose of carrying additional information.

ARC - Account Receivable debit conversion of a mailed or drop box delivered consumer check

Archiving - Online archiving of check images without payment processing

Authorization - refers to the authorization of an ACH transaction by a consumer or company. Most authorizations must be in writing and must be retained for a period of two years. There are 3 types: recurring, non-recurring, one-time.

BOC - Back office conversion of a check previously received by a merchant at the business.

Cash Concentration - Companies that have decentralized units use the ACH to concentrate cash into a centralized bank account - replaces wire transfer.

CCD - A debit or credit by an organization of it's own or another organization's bank account

Check 21 - Federal legislation enacted to permit electronic image transfer of all types of paper checks, including business, third-party, government, cashiers, and personal.

Check Guarantee - Protects merchants against various contingent liabilities for immediate orders

Check Truncation - stopping or truncating a paper check by turning it into an electronic item at the Point of Sale (POS) or in lockbox check truncation.

Consumer Account - a bank account of a natural person for personal not commercial purposes

Corporate Payments - business to business ACH Network collection and disbursement of funds. The Federal government is mandating this form of payment for corporate taxes and payments to government vendors.

DFI is a depository financial institution (a bank).

Direct Deposit - is the disbursement of funds to consumer accounts. Includes payroll, interest, trust disbursements, expense payments, dividends, pension payments, etc. This is the most widely used ACH service.

Direct Payment - the collection of funds from consumer or business accounts. This normally would be used to collect payments for monthly dues as in: health club membership, rent, phone, utility bills, newspaper bills, trash collection, mortgage payments, lease payments, etc.

ECP - Electronic Check Presentment

Effective Date - The date an exchange of funds takes place.

EFT - Electronic Funds Transfer is the transfer of funds from one bank account to another bank account utilizing the ACH Network.

Electronic Check Representment - An ACH Network service that allows for the electronic representment of a returned paper check marked non-sufficient funds (NSF). Provided that certain guideline are fulfilled the check can be collected electronically.

FI - A financial institution.

FMS - Financial Management Service

FRB - Federal Reserve Bank

Internet Initiated Entries - (WEB) a consumer authorizes a Receiver or Merchant to debit their account via the internet.

Lockbox Check Truncation - also called Accounts Receivable Truncation System (ARTS) is the process of turning checks received in the mail by a biller into electronic items.

MICR:- Magnetic Ink Character Recognition

NACHA - The National Automated Clearing House Association is the chief rules making and interpretation body of the ACH. NACHA is the cooperative governing body for 36 regional ACH associations.

NTR - Negotiated Transaction Rate - the fee for an transaction.

Non- Recurring Payment Authorization - an individual or company authorizes the debit of their account for a varying period and/or amount. Notification must be sent 10 days before the effective date with the amount to be debited.

NSF Check - A paper check that has been returned by the banking system due to non-sufficient Funds. These can be electronically represented through the ACH Network using Electronic Check Representment.

ODFI - is the Originating Depository Financial Institution, the bank that initiates an Electronic funds transfer through the ACH Network on behalf of the Originator.

One Time Payment Authorization - an individual or company authorizes a one-time debit of their account. The authorization is usually a written authorization but in some instances a recorded telephonic authorization may be used.

Originator - an individual or a company that initiates an ACH transaction.

Original Entry - a debit or credit ACH transaction directed to an account at an RDFI.

NOC - Notification of Change is an advice from an RDFI to an ODFI that entry information requires corrections and includes the correction details.

ODFI - Originating Depository Financial Institution - the FI (bank) of the Originator.

POS - Point of sale is a term used to describe the conversion of a paper check to an electronic transaction at the point of purchase.

Positive Pay - Verifies consumer name, routing and account number and that account is open.

PPD - A debit or credit of a consumer's account entry pursuant to an authorization.

Prenotification - or Prenote is an ACH entry with no value that is sent to an RDFI to verify account information prior to sending a live entry.

RCK - Refers to returned check. Represents the electronic check process for electronic representment of NSF checks. Electronic check representment.

RDFI - Receiving Depository FI - the FI (bank) receiving debits or credits for its Receivers.

RTN - Routing Number - the 9 digit number assigned to a bank.

Recurring Payment Authorization - an individual or company authorizes the periodic debit of their account for the same period and amount.

Receiver - the individual or company that holds an account to which an ACH entry is sent.

Return Reason Codes - or R Codes are rejections of original ACH entries by the RDFI.

RDFI - is the Receiving Depository financial Institution, the financial institution that receives an ACH transaction for a holder of an account.

Receiver - A person who authorized an Originator to send debit or credit entries to its accounts.

Return - The return of a debit item by an RDFI when there is NSF or UA (bounced check).

Return Entry - the return of an original entry that either could not be posted or was not able to be identified by the RDFI - closed account, NSF, wrong account number, etc.

TEL - A debit of a consumer account pursuant to an oral authorization via telephone.

Telephone-Initiated Entry - (TEL) is an entry initiated through a telephone authorization for a one time debit for collection of funds for payment of goods and services. A TEL is valid only when there is an existing relationship between the parties or if no existing relationship, the consumer initiates the telephone call.

Third Party Processor - any processor that participates in a relationship within the ACH processing flow - usually as an Originator of transactions for clients.

Truncation - in ACH it normally refers to stopping or truncating a paper check as in POS or lockbox check truncation and turning that paper check into an electronic item.

UA - Unavailable Funds - funds are in the bank but not credited to the account.

Verification - Verifies routing and account number and that account is open.

WEB - A debit of a consumer account pursuant to an authorization via the Internet.