ACHs process large volumes of credit and debit transactions in batches. ACH
credit transfers are initiated by the payer and include payments such as: direct deposits, payrolls, retail payments and vendor payments.
Operations This section describes in a generic way the typical operation of an ACH system. Each ACH system has its own specifics; see, for example, quick facts for the
Nacha ACH Network in the
United States and its terminology. • The ordering customer makes a transaction initiation, which can be either manually or by sending a file of initiation requests to a bank. • The bank gathers all transaction initiations for an ACH that arrive from different customers (combining manual and file-based). • On a periodic basis, the bank creates a file that it dispatches to the ACH either at the end of day or in cycles throughout the day. • The ACH operator combines the information submitted by the banks within each cycle (generally ACHs have several cycles throughout the day). • The ACH operator informs each bank of the net settlement amount for which they are responsible for the cycle. • The ACH operator ensures that the settlement amounts are received from all participants for the cycle, so that the cycle can be executed. • The ACH operator informs the destinator's bank of the transaction details. • When transaction arrives in the destination bank, the bank executes the transaction: such as crediting the payment to the beneficiary, while the ordering customer's bank debits the ordering customer's account. ==Existing systems==