So, You Want to Originate ACH?

Amy Donaghue

By: Matthew Wade, AAP, APRP, CPA, Senior Manager, Advisory Services

So, you want to originate ACH? Your clients are asking for it! All your competitors are doing it! It’s faster, safer, cheaper and more efficient than checks. It can’t be that difficult, right? Just sign a few contracts, push a few buttons and you’re off and running! Well…. maybe it’s not quite that simple. Let’s take a look and see what needs to be done before you begin ACH origination.

To begin ACH origination for your financial institution it takes more than a snap of the fingers and pulling a program off the shelf. There are a number of things to consider including policies, procedures, client agreements, vendor/third-party agreements, risk assessments, ACH Rules compliance, regulatory compliance, risk management, due diligence, data security, Standard Entry Class (SEC) codes, exposure limits, warranties, authorization forms, record retention, File formatting, reporting to Nacha, internal controls and increased audit considerations. Whoa! Did you get all that? And that’s just for starters!

As an Originating Depository Financial Institution (ODFI), you are primarily responsible for ACH Entries that enter the Network. These responsibilities include ensuring all Entries are properly authorized, all Entries comply with the ACH Rules, Originators and Third-Party Senders are permitted to originate Entries, Entries include the appropriate information, banking information is securely transmitted and various other warranties related to the timing of Entries and specific authorization formats. Finally, while the ACH Rules are over 650 pages long, there are some facets to ACH origination that are optional. Understanding those options, and determining their usefulness and applicability to your clients, is an important task for ACH origination as well.

If you’re now thinking, “ehh maybe we should hold off on this whole ACH origination plan.” don’t be discouraged! ACH origination can seem like a daunting task, but with the right preparation and planning, your financial institution can easily join the thousands of other participants in the ACH Network as an ODFI. And the best part is, you’re not alone! EPCOR has a long history of assisting financial institutions just like you with ACH education, regulatory guidance, and audits and risk assessments. While there are a lot of considerations to wade through, it really comes down to understanding how it all fits in with your organization and the services you plan to offer. That’s where we come in. We have a long history… We KNOW the ins and outs of ACH Origination and can help you bring all the puzzle pieces together - without the headache.

Our Advisory Services team is equipped to assist financial institutions prepare and plan for ACH origination with our comprehensive ACH Origination Support Service. The ACH Blueprint service will walk you through the establishment of an ACH origination program for your financial institution in a step-by-step plan that includes education and guidance, along with sample documents, tools and outlines which you can then customize to your financial institution’s desires and goals. So, whether you want to begin with internal ACH origination, delve into corporate ACH origination or incorporate new ACH services or products to your existing ACH origination program, EPCOR can help! Contact us today at advisoryservices@epcor.org for a free, no-obligation quote!