ACH Origination

What are ACH transactions?

Automated Clearing House (ACH) transactions are electronic credits or debits sent by originating companies through the banking system to post against a checking, savings, or loan account of the recipient. If you're new to ACH, it may be helpful to know the roles different parties play. A simplified view of an ACH transaction flow includes five entities: The Originator, the Originating Depository Financial Institution (ODFI), the ACH Operator (usually the Federal Reserve), the Receiving Depository Financial Institution (RDFI), and the Receiver.

As a Receiver, you may experience ACH transactions as direct deposit of your salary or automated drafts to pay one or more of your monthly bills. As an Originator, you may be the organization sending the transactions to make payments to (or draft funds from) your customers. As an ODFI, you may be facilitating transmission of ACH transactions on behalf of your business or customers who act as Originators.

Types of ACH Transactions

ACH Transactions must conform to the rules published annually by the National ACH Association (Nacha®). Those rules require originating companies to act in good faith and to perform certain actions, like getting authorization from the recipients before posting ACH transactions to their account. Our solution helps by handling the technical lifting for you. We'll use the information you submit to determine the appropriate path for each transaction. To send ACH transactions through our APIs, you'll need to answer the following questions:

• Is this a single transaction or a scheduled recurring transaction?

  Nacha requires recurring transactions to be formatted in a specific way. Our platform automatically takes care of that for you; all you have to do is let us know whether a transaction is a one-time event or is a part of a set of transactions sent to the same Receiver.

• Is the Receiver of the transaction a consumer or a business?

  Consumer and commercial ACH transactions are governed by different rules and requirements. You'll need to indicate the type of Receiver and we'll take care of the details.

• How was the transaction originated?

  Was the transaction authorized via a signed or faxed form? Did the receiver authorize it verbally over the phone? Or maybe they authorized it on a web site or mobile app? Our APIs ask for the origin of the transaction, and that helps us determine how to format and send it correctly.

Whatever type of ACH transactions you send, we'll help you comply with the applicable rules and regulations.

Options for Storing Receiver Information

Keeping up with detailed information about transaction recipients can be cumbersome. There are also privacy issues involved, and these can make protecting a Receiver's customer and account information time-consuming and expensive. If you also use our platform to accept credit or debit cards, Payment Card Industry Data Security Standard (PCI DSS) requirements can compound your cost and commitment. Our solution can help simplify this task.

Our solution offers two APIs for ACH payments: The SmartPay Transaction Processing API and the SmartPay Payment Vault API. If your organization plans to maintain Receiver information in your system's databases, you should use the SmartPay Transaction Processing API. With Transaction Processing, you will include Receiver's information with each payment you submit. If you would like us to store the Receiver information in our secure database on your behalf, you should use the SmartPay Payment Vault API. With Payment Vault, you will send us information about a Receiver one time, after which you can delete any sensitive information instead of storing it. Our system will return any identifying number assigned to that Receiver. Each time you need to send a transaction to that Receiver's account, simply send us the identifying number and we'll take it from there. You can update Receiver information as often as you need to. Payment Vault can be a secure and efficient way to maintain Receiver information while eliminating many risk and compliance issues.

Other Tools and Resources

Originating an ACH transaction is only one step in the payment process. You may also need to manage subsequent events, monitor the transaction status, and retain transaction data to support future audits or analysis. Our solution provides the tools you need to manage the entire payment process.

• Account Validation

  When transactions are originated through a website or mobile application, Originators are required to take commercially reasonable steps to validate the Receiver's account information. When enabled, our Account Validation solution, JHA SmartDetect™, can automatically perform these steps during transaction processing. You can also validate a Receiver's account information outside the transaction process by sending a specific request to SmartDetect.

• Reporting

  Our SmartPay Transaction Reporting API allows you to pull back current day or historical reports as often as you like. These reports can contain summary and/or detailed information related to transactions that meet the criteria you present.

• Push Notifications

  Instead of repeatedly pulling reports to check transaction status, our push API option, JHA SmartWatch™, can provide push notifications that alert you immediately when the status of a transaction changes. By monitoring this webhook API, you can easily keep your systems up to date with the most recent transaction information.