ACH Terms and Definitions
Terms and Definitions
ACH - Automated Clearing House
An organization formed by financial institutions using a computer-based facility to settle automatic payment and deposit transactions among financial institutions in a given geographic area.
ACH Debit
Term used to describe a pre-authorized withdrawal, which will be deducted from an account as an EFT transaction.
ACH Rule
The required rules and regulations that each financial institution must follow that govern the ACH network. These rules are set by NACHA.
ACH Stop Payment
An automatic debit (not a CheckCard transaction), which the customer has contacted the company and feels that company may still send the debit to be deducted from their account. ACH debits MUST have the Unauthorized Affidavit section of the Stop Payment form completed and signed by the customer in order for the stop payment to be returned through the ACH system. ACH Rules requires that we have the Unauthorized Affidavit on file. Stop payments on ACH debits should be initiated at least 3 days before they are scheduled to post.
ATM - Automated Teller Machine.
ATM Card
Debit card which can only be used with a PIN. Transactions can be done through an ATM machine or POS (PIN based) machine. Customers can access their Checking and/or savings accounts through the ATM machine or their Checking account through a POS machine. NWF/Gateway Savings refer to their ATM card as the Any Time Money card.
Authorized
In reference to an automated transaction, this is when a customer initiated the transaction and has given their O.K. that the money may be withdrawal from their account.
Automatic Debit
An authorized transaction, which may be withdrawal from a specified account through the ACH system.
CheckCard
Our trade name for a VISA debit card. We must abide by all ACH Rules and VISA rules when we are handling transactions.
Decretionary field
A field within an ACH file. This field is optional and contains a two character input.
EFT - Electronic Funds Transfer
Any transfer of funds, other than a transaction originated by a check, draft or similar paper document, that is initiated through an electronic terminal.
Free Form Addenda
This is an optional field on an ACH file. This field should only be considered to be used when originating CIE, CTX, or other types of addenda style commercial entries.
Identification field
A field within an ACH file that identifies the consumer that will be receiving the ACH entry. This is typically the employee number, policy number, partial name or any other type of identifying word or number for the company and bank to recognize the receiver of the entry.
NACHA - National Automated ClearingHouse Association
The regulatory body of the ACH network.
NACHA format
A specific computer format requirement for ACH files within the Federal Reserve System. It contains a certain numbers of characters and lines for the universal computer language to read.
ODFI - Originating Depository Financial Institution
The Bank that initiates the ACH entry.
Origination (originating)
The company/Bank that initiates the ACH entry.
PIN - Personal Identification Number
The secret number that is used to access your accounts at an ATM machine or a POS machine. The PIN should be kept in a safe place since anyone who has the debit card and PIN can access (ei. withdrawal) the account.
PIN Based
A transaction done at either an ATM machine or POS machine, which requires your Personal Identification Number to be inserted in order to complete the transaction. This type of transaction can NOT be done without the PIN.
POS - Point Of Sale
The machine that is typically seen at the counter of a merchant which a customer can swipe their debit or credit card through to pay for their purchase. A PIN is required to complete the purchase (PIN based transactions). They are also the machines that are used by the merchant behind the counter that the debit or credit card is swiped. These transactions would typically require a signature to complete the purchase (signature based transactions).
Recurring Debit
An automatic debit that will be deducted from the specified account on a specified day, time after time.
Revocation (Revoke, Revoked)
A customer request to the company originating the ACH entry that the authorization previously provided is null and void.
RDFI - Receiving Depository Financial Institution
The Bank that receives an ACH item for a customer.
Routing number
A nine-digit bank identifying number. The beginning number of a routing number will never be greater than 3.
Sightdraft
In reference to the ACH system, this is an order from one financial institution to another financial institution to pay them as part of a correction or adjustment to a customer account that had been credited or debited incorrectly.
Signature Based
A POS transaction, which does not include inserting the PIN to complete the transaction.
Surcharge
The amount that a customer may have to pay to use an ATM machine. The customer's bank cannot regulate this charge and the customer must have it deducted from their account if they choose to use that ATM machine. It is illegal in the State of Iowa to surcharge a customer for using an ATM machine. Iowa is one of two states that still will not allow surcharging within the State. If the customer is outside the State of Iowa they will find that they are subject to surcharging. POS machines do not have a surcharge in any state in the United States.
Tran Code
The Bank identifying code that determines the type of account the entry is to post to and whether the item is a credit or a debit.
Unauthorized
In reference to automated transactions, this is a transaction that the customer did not want or did not give their O.K. to have debited from their account