Manage Nacha Compliance & Rules with Axway Solutions

NACHA

NACHA, the Electronic Payments Association, was formed in 1974 as a non-profit organization to establish operating rules for Automated Clearing House (ACH) payments. By 1978, any two financial institutions in the U.S. could exchange ACH payments under the same set of rules and procedures. By 1988 the number of ACH payments per year exceeded 1 billion, and the growth rate continues – the number of total payments in 2012 is estimated at nearly 17 billion.

Today, the ACH Network is one of the largest, most efficient, secure payment systems in the world, handling consumer, business and government direct deposits and direct payments. NACHA manages the administration and governance of the ACH Network, via the NACHA Operating Rules – a guide for risk management and payment certainty for all those using the Network.

NACHA compliance, rules, and regulations

NACHA Rules are formally enforced through a system of warnings and fines called the National System of Fines. It is critical that all institutions using the ACH Network for payments follow NACHA regulations, not only to avoid fines, but also to protect the integrity of the Network.

As of 2009, NACHA rules require every ACH payment entering or exiting the United States to be identified and formatted as an International ACH Transaction (IAT), and every transaction must be reviewed for the U.S. Dept. of the Treasury’s Office of Foreign Assets Control (OFAC) compliance.
All U.S. financial institutions are affected by this rule, even those that do not currently send or receive IAT ACH payments, since any financial institution could potentially receive an IAT transaction.

The corporate trade exchange

Corporate trade exchange, or CTX, is a type of ACH transaction used by corporations and government agencies through the ACH Network. Corporate trade exchange is used to pay trading partners via ACH CTX format. CTX format allows for payment to several parties with a single fund transfer using ANSI X12 EDI format to provide remittance details, which enables the recipient to automatically post payments to their accounting systems.

Axway can help

All companies and financial institutions that move money electronically via ACH must be NACHA compliant. Axway enables banks and corporations to streamline, consolidate and manage their secure integration platforms, and apply sound policy and governance, simplifying compliance and providing the ability to transform non-standard formats into NACHA compliant files and vice versa. Thus corporate banking clients have no need for additional NACHA software or NACHA file software.