ACH network terminology
Participants that are involved in electronic payments are the individuals or companies that request the payment transaction, the banks that are involved, and clearing houses. Clearing houses are central facilities through which the banks can send or receive the transaction information.
The following list introduces the specific terminology that NACHA
uses to define these roles.
- Originator. – The company or individual that initiates the transaction. The transaction can be either credit or debit.
- Originating Depository Financial Institution (ODFI). – This institution receives transaction information from the Originator and forwards the transaction information to ACH Operator.
- ACH Operator – Federal Reserve Bank (FRB) or private organization.
- Receiving Depository Financial Institution (RDFI). – Any financial institution that is qualified to receive ACH entries that agree to abide by the NACHA Operating Rules and Guidelines. The RDFI is responsible for posting entries and for providing funds availability, which are determined by the Settlement Date in the Company Batch Header Record.
- Receiver – The company or individual that authorizes the originator to initiate ACH to the receiver's account.
- Third Party Service Provider – The Third Party Service Provider provides services on behalf of the originator, ODFI or RDFI.