Getting Started with ACH

Did your boss ask you to find out about electronic payments—and now you are searching the Internet—not even sure what questions to ask?

ACH Universal™ will enable you to electronically:

• Pay Direct Deposit to your employees
• Collect from customers
• Pay vendors and governmental agencies
• Consolidate funds between accounts at different banks

Two-step process to getting up and running

1. Obtain ACH service from your bank
2. Create an ACH file - also referred to as a NACHA formatted file. This is a standardized format that contains your transaction information.

Obtain ACH service from your bank

We typically recommend calling vs. walking into your local branch. By calling the number on your bank statement, you are more likely to get a customer service representative familiar with business services. The department responsible for ACH services is often called business banking or treasury management services.

Underwriting

When the bank signs you up for ACH service, in essence they are giving you a line of credit.

To protect themselves and minimize fraud costs and losses for all of their clients - banks will walk you through an underwriting process. This will enable them to provide you with a limit as to how much you can have in the ACH network at any given time.

Your best bet for underwriting is always with your current bank.

Your account history with the bank, offsetting balances and your credit history all come into play during the underwriting process.

Create an ACH file

Obtain a list of sample transactions from your internal accounting, payroll or other system.

Use our free trial software to convert your list of transactions into an ACH file. Then, send the ACH file to your bank for approval.

An ACH file is a standard file format - specified by NACHA - the National Automated Clearing House Association.

Once your file is approved, you are ready to pay employees and vendors, and collect from customers.

To create transactions, simply enter them into ACH Universal, create the ACH file, and then transmit it to your bank. All of this can be automated with our Automation features.

FAQ's

What about ACH processors?

ACH processors play a role identical to those of banks, in that they will accept your ACH transactions, and pass them through the ACH network. However, as these processors typically do not have the same advantages as your bank in minimizing fraud risk - such as account history and offsetting balances - the fees on ACH processors can be significantly higher.

ACH service through banks averages 12 cents per transaction, while service through a processor will typically be higher.

What costs can I expect?

Bank ACH service is fairly competitive and averages a flat 12 cents per transaction.

Processor ACH service costs vary significantly and are typically 30 - 40 cents per transaction. Costs may be on a sliding scale and can be significantly higher for low volume users.

In addition, many charge a monthly fee for the service - whether used or not - and a per file fee.

Notes:

--There are no volume or transaction fees associated with ACH Universal.

--See pricing note below for additional information

When we start sending transactions, how do we know if they went through?

Sending ACH transactions is exactly like depositing traditional paper checks.

Now when you deposit checks received from customers, the bank will issue you a credit for the total amount. Subsequently in the clearing process, if a check fails to clear - ie. Insufficient Funds, the check will be returned and a debit will be issued against your account for the amount of the check.

The ACH process works in a similar manner.

Typically, the bank will credit/debit your account on the effective date of the transaction. If the transaction is returned, for example Insufficient Funds, your account will be debited/credited for the transaction amount. The number of days it takes to return an item varies, but it is typically within two - three business days.

What is the difference between an EFT, echeck and an ACH?

All three terms are very closely related - EFT's (Electronic Funds Transfer) encompass ACH's plus other types of transactions, while eChecks typically represent a subset of ACH's.

An Electronic Funds Transfer is a fairly general term and refers to any computer-based system used to perform financial transactions electronically. It would include bank wire transfers, debit card activity, ATM initiated transactions - as well as ACH transactions.

An eCheck is an ACH transaction that involves electronically processing a check - commonly referring to by the Standard Entry Class codes of ARC, BOC, TEL, WEB, CCD and PPD. While not everyone includes CCD and PPD classes, it is a philosophical difference.

If I switch banks or processors, can I still use ACH Universal?

Yes. ACH Universal creates a NACHA standard formatted file. Any bank or processor that accepts ACH files will accept ACH Universal files.

Need additional information or help getting started?

Please call us at 866 226-5732.

Pricing notes:

Pricing is based upon our conversations with providers of bank and processor ACH services. Pricing can even vary within a financial institution based on factors including relationship history, risk, industry and volume.

Sliding scale pricing for processors are processor specific. Example - Intuit charges 99 cents per transaction, but this decreases based on volume (http://payroll.intuit.com/payroll_services/direct_deposit/index.jsp).