ABA NUMBER – See Routing/Transit Number.

ACH – An acronym used to identify the Automated Clearing House Network.

ACH AUTHORIZATION – Agreement by a receiver to allow an ACH credit or debit entry to its account. Authorizations for credit transactions may be oral, but consumer debit transactions must be authorized in writing or similarly authenticated by other means (e.g., by digital signature or PIN if by computer).

ACH CREDIT – A transaction through the ACH Network originated to pay a receiver (deposit into an account).

ACH DEBIT – A transaction through the ACH Network originated to remove funds from the receiver (withdrawal from an account).

ACH NETWORK – Funds transfer system governed by the rules of the National Automated Clearing House Association, which provides for the interbank clearing of electronic entries for participating financial institutions.

ACH OPERATOR – The ACH operator processes entries between an originator and receiver. There are currently two ACH operators -- the Federal Reserve Bank and EPN (Electronic Payments Network).

ACQUIRER – A financial institution or Merchant Service Provider (MSP) that facilitates and manages credit card processing on behalf of a merchant customer.

ACQUIRER BANK – The bank or financial institution that holds the merchant's bank account that is used for collecting the proceeds for credit card processing.

ACQUIRING PROCESSOR – The credit card processing entity with which an acquirer partners in order to provide merchants with transaction clearing, settlement, billing and reporting services.

ADDENDA RECORD – An ACH record type that carries supplemental data needed to completely identify an account holder(s) or provide information concerning a payment to the RDFI or receiver.

ANSI – The American National Standards Institute.

AUTHENTICATION – A critical data security technique used to prevent the alteration of data as the data are exchanged between the participants in an ACH transaction.

AUTOMATED DEPOSIT – A deposit made directly to an account at a DFI through the
ACH network (i.e. payroll deposits, social security payments, and retirement benefits).

BANK IDENTIFICATION NUMBER (BIN) – A BIN is the first six digits of the credit card, debit card, charge card, etc. These digits identify which network the card belongs to as well as which bank issued it.

BANKING DAY – Any day on which a Depository Financial Institution (DFI) is open to the public during any part of the day for carrying on substantially all its financial functions. With reference to ACH, any day on which the ACH operator is open and processing ACH transactions.

BATCH – A group of records or documents considered as a single unit for the purpose of data processing.

BUSINESS DAY – A day on which a financial institution is open and performing substantially all of it operations.

CLEARING HOUSE – A voluntary association of DFIs that facilitate the clearing of checks or electronic items through the direct exchange of funds between members.

COMMERCIALLY REASONABLE – A system, technology, practice or procedure frequently practiced among originators conducting similar types of business.

DATA ENCRYPTION STANDARD – A technique by which a message is scrambled into an indecipherable stream of bits for transmission.

DATA TRANSMISSION – The electronic exchange of information between two data processing points (computers).

DESCRIPTIVE STATEMENT – A bank account summary that contains information concerning one or more entries for which no separate item is enclosed. ACH entries necessitate some form of descriptive statement unless a substitute enclosure document is produced by the financial institution. Minimum reporting requirements are defined by Regulation E.

DFI – Depository Financial Institution.

DIRECT DEBIT – A method of ACH collection used where the debtor gives authorization to debit his or her account upon the receipt of an entry issued by a creditor.

EFFECTIVE ENTRY DATE – The date placed on an ACH transaction by the originator of the transaction or the ODFI – it is normally the date the originator or ODFI intends the transfer to take place.

ELECTRONIC FUNDS TRANSFER – A generic term used whenever money is moved without the use of a check or draft.

ELECTRONIC FUNDS TRANSFER ACT – The United States federal law that governs the use and administration of electronic funds transfer services.

ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT (E-SIGN) – A United States federal law that defines and governs the use of digital signatures and records in electronic commerce.

FILE HEADER – The first record of an ACH file containing information necessary to route, validate and track the ACH transactions contained within the file.

FUNDS AVAILABILITY – The time at which funds associated with ACH, cash or check deposits are made available to the account holder.

INTERCHANGE – The process by which all parties involved in a credit card transaction (i.e., processors, acquirers, issuers, etc.) manage the processing, clearing and settlement of credit card transactions, including the assessment, collection and/or distribution of fees between parties. Also known as Credit Card Interchange.

ISSUING BANK – A financial institution that issues credit cards to consumers on behalf of the card associations. Also know as Card Issuing Bank or "Issuer."

MEMO POSTING – A notation posted to an account that indicates a credit has been received, but has not yet been posted to the account.

MERCHANT ACCOUNT – A financial institution or bank account that is used by a merchant specifically for the purpose of collecting proceeds consumer bank account or credit card payment transactions. A Card Present (CP) merchant account is used by merchants that receive payments in a physical location where payment is physically presented to the merchant by the customer at the time of the transaction. A Card Not Present (CNP) merchant account is where payment is not physically presented to the merchant by the consumer at the time of the transaction.

MERCHANT ACCOUNT PROVIDER – A financial institution or bank that provides a financial account to a merchant for the purpose of collecting proceeds from consumer bank account or credit card payment transactions.

MERCHANT IDENTIFICATION NUMBER (MID) – An identification number assigned to each member merchant of an acquiring organization, such as a financial institution, Independent Sales organization (ISO), Merchant Service Provider (MSP) or processor.

NACHA - (NATIONAL AUTOMATED CLEARING HOUSE ASSOCIATION) –
A body that develops, maintains the NACHA Operating Rules and oversees all ACH activities and procedures. NACHA is also responsible for the sale and distribution of payment-related publications and providing national education.

NON-SUFFICIENT FUNDS – A type of ACH return indicating that a receiver's bank account does not have sufficient funds to cover a specific transaction.

NOTIFICATION OF CHANGE – Notification to a merchant from a receiver's bank indicating that bank account information provided with a specific transaction was incorrect and includes correct information.

ODFI (ORIGINATING DEPOSITORY FINANCIAL INSTITUTION) – A participating DFI that is responsible for the origination of ACH transactions. This institution may deposit items directly with an ACH operator or may work through a third-party processor that is the actual Sending Point.

ORIGINATOR – An organization or company that produces an ACH file and delivers it to an ODFI for introduction into the ACH Network.

PARTICIPATING DEPOSITORY FINANCIAL INSTITUTION – Any DFI that is authorized by the ACH operator to originate or receive ACH entries.

PAYMENTS GATEWAY – A system of technologies and processes that allow merchants to electronically submit payment transactions to the payment processing networks (i.e., the Credit Card Interchange and the ACH network). Payments Gateways also provide merchants with transaction management, reporting and billing services.

PRENOTIFICATION (PRENOTE) – A zero dollar entry that must be sent through the ACH Network at least six calendar days prior to any live entries affecting an account at a RDFI. The prenote allows the RDFI to validate entry information.

RECEIVER – A term used when referring to the clearing of ACH transaction to describe the person or corporate entity that has authorized an originator to initiate a refund or charge transaction to their bank account.

RDFI (RECEIVING DEPOSITORY FINANCIAL INSTITUTION) – A participating DFI that is responsible for the receipt of ACH transactions. This institution may receive items directly with an ACH operator or may work through a third-party processor that is the actual Receiving Point.

RECEIVING POINT – A processing site that receives entries from an ACH operator on behalf of an RDFI.

REGIONAL PAYMENTS ASSOCIATION – An organization formed by DFIs to regulate and support the exchange of electronic transactions.

REGULATION CC – This regulation, published by the Federal Reserve Bank Board of Governors, implements the Expedited Funds Availability Act and the Check Clearing for the 21st Century Act.

REGULATION E – This regulation, published by the Federal Reserve Bank Board, establishes the rights, liabilities and responsibilities of consumers who use electronic fund transfers and financial institutions that offer electronic fund transfer services.

RETURNED ITEM – An ACH entry that has been rejected by a RDFI because it cannot be posted (i.e. account closed, no account, NSF, etc.).

REVERSING ENTRY – A file created by a Sending Point to cancel a previous file or entry because the previous file or entry was sent in error or is a duplicate.

ROUTING/TRANSIT NUMBER – A nine-digit number, also known as the ABA number, which is used within the banking system to identify a financial institution. The number is used on items (checks, ACH transactions, etc.) that belong to a specific financial institution so that they can be routed through the banking system to the proper institution.

SENDING POINT – A processing site that sends entries to an ACH operator on behalf of an ODFI.

SETTLEMENT – The process of accounting for transactions processed through the ACH operator. Settlement occurs daily.

SETTLEMENT DATE – The day on which settlement occurs, i.e., funds actually change hands as a result of an ACH entry.

SIMILARLY AUTHENTICATED – An authentication standard that allows written and signed authorizations to be obtained in electronic form. To meet the requirement of "in writing," an electronic authorization must be viewable on a computer screen or other display method that will allow the consumer to be able to ready the authorization.

SOURCE DOCUMENT – A check or share draft used to create an ACH entry.

STANDARD ENTRY CLASS CODE (SEC) – A three-character code within an ACH Company/Batch Header Record to identify the payment types contained within an ACH batch. (i.e. CCD, CIE, CTX, MTE, POS, or PPD).

THIRD-PARTY SENDER – A third-party service provider is considered to be a third-party sender when there exists an agreement with an ODFI or another third-party sender to originate transactions and also has an agreement with an originator to initiate transactions into the ACH Network on their behalf. In this situation, there is no agreement between the originator and the ODFI. A third-party sender is a subset of the third-party service provider.

THIRD-PARTY SERVICE PROVIDER – An originator, an ODFI, or an RDFI may use a third-party service provider during the process of originating or receiving ACH transactions. Third-party service providers can include data processors, correspondent banks, or financial institutions providing ACH services to other financial institutions.

UNIFORM COMMERCIAL CODE ARTICLE 4A (UCC 4A) – Uniform Commercial Code (UCC) is a comprehensive body of state law governing commercial transactions. Article 4A covers certain funds transfers, including ACH credit transactions not subject to the Electronic Funds Transfer Act.

UPIC (UNIVERSAL PAYMENT IDENTIFICATION CODE) – Developed by the Electronic Payments Network, the ACH business of The Clearing House Payments Co. L.L.C., a UPIC is a unique bank account identifier that allows companies to receive electronic payments without divulging their sensitive banking information. UPICs are for credits payments only and are portable from one institution to another.

WAREHOUSING – The ability of an ODFI to receive a file from an originator prior to the Effective Entry Date and hold it for release to the ACH operator or for a RDFI to receive entries ahead of the Settlement Date and hold them without posting until the Settlement Date.

WHOLESALE CREDIT – A credit transaction originated or received by a non-consumer; i.e. a credit transaction to a "business account.”