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Frequently Asked Questions

What is ACH?

ACH stands for the Automated Clearing House (ACH) Network:

The ACH Network is a highly reliable and efficient nationwide batch-oriented electronic funds transfer system governed by the NACHA OPERATING RULES which provide for the interbank clearing of electronic payments for participating depository financial institutions. The Federal Reserve and Electronic Payments Network act as ACH Operators, central clearing facilities through which financial institutions transmit or receive ACH entries.

ACH payments include:

  • Direct Deposit of payroll, Social Security and other government benefits, and tax refunds;
  • Direct Payment of consumer bills such as mortgages, loans, utility bills and insurance premiums;
  • Business-to-business payments;
  • E-checks;
  • E-commerce payments;
  • Federal, state and local tax payments.

The number of ACH payments originated by financial institutions increased to 16 billion in 2006, up 14.5 percent from 2005. These payments were valued at $30.3 trillion. The annual ACH payment volume has continually doubled every 5 years. NACHA estimates that there were over 8 billion consumer bills were collected via the ACH Network in 2007 which included pre-authorized debits, Internet and telephone payments, and checks converted into ACH payments.

Who are the parties to an ACH transaction?

 

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Compare Credit Cards to ACH

Credit Cards
Sale of $100
Discount Rate - 3%
Per Transaction - 30¢
- - - - - - - - - - - -
Your Cost for Credit
$3.30

ACH
Sale of $100
Discount Rate - 0%
Per Transaction - 25¢
- - - - - - - - - - - -
Your Cost for ACH
$0.25

Savings - $3.05
ACH Secure = More Money in Your Account
 

Originator
Any individual, corporation or other entity that initiates entries into the Automated Clearing House Network

Originating Depository Financial Institution (ODFI)
A participating financial institution that originates ACH entries at the request of and by (ODFI) agreement with it's customers. ODFI's must abide by the provisions of the NACHA Operating Rules and Guidelines.

Receiving Depository Financial Institution (RDFI)
Any financial institution qualified to receive ACH entries that agrees to abide by the NACHA Operating Rules and Guidelines.

Receiver
An individual, corporation or other entity who has authorized an Originator to initiate a credit or debit entry to a transaction account held at an RDFI.

What is involved in the application and setup process?

For every merchant that would like to use our ACH service we require that you complete a formal processing agreement. The first step is to complete our online application worksheet on this website. What we will do is transfer this information to the original application and then email or fax it to you for your signature. Once you fax the application back to us along with a blank voided business check your application will be submitted to our underwriters. This approval process normally takes one or two business days. Within 24 hours you will receive your Sage Virtual Terminal log-in user name and temporary password as well as your Real-Time Reporting log-in user name and temporary password. You can then immediately begin submitting your ACH transactions. In addition, if you have signed up for our optional but recommended Virtual Terminal tele-training we will arrange this for you.

Do you approve every business that applies?

The underwriters will normally approve the vast majority of what we consider to be low risk businesses with good credit. If you think that you are a high risk business then chances are you probably are not a candidate for ACH Secure. However, feel free to email us with your individual situation.

What are the Terms and Conditions?

Please click here to read and print the Terms and Conditions.

Why must I complete an application when other ACH companies have an online 15 minute instant approval?

The ACH system has very strict rules when it comes to who has access to their system. Otherwise the system would be subject to great compromise. So to think that one could simply fill out an online form and begin to transfer funds between checking accounts in our opinion is just silly. Even though you may get an online approval doesn’t mean that your funds would in fact be transferred to your account in a timely manner. Instead funds being delayed while the real approval occurs is just a recipe for problems with your funds.

How long does it take to receive my funds?

The normal timeframe to receive the funds in your checking account from the time that you submit an ACH file is 2 business days.

Can I perform both single payment and recurring ACH payments?

Absolutely. In fact the ACH Secure program includes both single and recurring payments within the same module. Where other ACH processors charge an additional monthly fee for recurring payments we include this feature in our standard monthly pricing.

What authorizations are required in order to perform ACH transactions?

Transactions processed through the Automated Clearing House are strictly controlled by Government Regulations and monitored by the Federal Reserve. There are two major methods of entering data:

Merchant Initiated Method (Where you the merchant keys in the data)

1. Merchant receives order
2. Merchant enters data
3. On-screen transaction confirmation
4. Federal Reserve directs the debit and credit process
5. Money moves from consumer account to merchant account

Federal Reserve Rules Governing Merchant Initiated Transactions

  • Merchants must have written authorization from the customer to debit the customer’s bank account, or
  • Customer has given the merchant oral authorization to debit his/her checking account and has either initiated the telephone call or has an existing relationship with the merchant.

Customer Initiated Merchant (Used by Internet merchants)

1. Consumer enters data via website
2. Transaction confirmation emailed
3. Federal Reserve directs the debit and credit process
4. Money moves from the consumer account to the merchant account

Federal Reserve Rules Governing Consumer Initiated Transactions

  • Consumers can only initiate check payments from their own personal or business checking accounts – no third party initiators!
  • Consumer identity must be authenticated (standard feature with ACH Secure)
  • Since 2002, any Internet merchant not properly authenticating consumers for non-recurring Web transactions will be liable in class action lawsuits under Federal Regulation E. Sage Electronic Check Services outperforms other virtual check programs by authenticating consumers through unique information (such as a social security number, date of birth, or driver’s license number) and verifying the information provided against Equifax, the leading national information service and an authority on consumer credit issues.


Do you have a sample ACH Authorization form that I can provide to my customers?

Yes, please click here for a sample authorization form.

Can I do a batch upload of my ACH transactions?

Yes, in fact this is another standard feature of your ACH Secure program at no additional monthly cost. The batch upload option allows you to create a batch file from your database and then upload it directly in the Virtual Terminal so that all of the transactions in the file can be processed. Files are processed hourly and you will receive an email with a results file that would be detail which transactions were approved and declined. Batches can be imported through a variety of normal import formats.

Is this program available for international merchants or customers?

No. At the current time your company must be physically located within the United States and your customers must have a checking account issued by a U.S. bank that is part of the Federal Reserve system.

I have a question about your program but can’t find the answer on my website.

Please email us and we will answer your question as quickly as possible.

     

Today is
It is the perfect day to select ACH Secure
for your ACH processing service.

Sage

Credit Card Processing Services, Inc. is a
Registered ISO/MSP of Wells Fargo Bank, N.A., Walnut Creek, CA

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