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Questions and Answers
Which financial institution is the payer in a typical ACH credit transaction?
Which financial institution is the payer in a typical ACH credit transaction?
Who authorizes the deposit of their paycheck through direct deposit in a typical ACH credit transaction?
Who authorizes the deposit of their paycheck through direct deposit in a typical ACH credit transaction?
Which financial institution verifies the direct deposit payroll ACH files in a typical ACH credit transaction?
Which financial institution verifies the direct deposit payroll ACH files in a typical ACH credit transaction?
Which financial institution routes the ACH transaction to the payee's financial institution in a typical ACH credit transaction?
Which financial institution routes the ACH transaction to the payee's financial institution in a typical ACH credit transaction?
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Which financial institution settles the transaction between the participating financial institutions in a typical ACH credit transaction?
Which financial institution settles the transaction between the participating financial institutions in a typical ACH credit transaction?
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Study Notes
ACH Credit Transaction Overview
- The payer in a typical ACH credit transaction is often the employer or party initiating payment, typically a bank or credit union.
- Employees authorize the deposit of their paycheck through direct deposit, allowing employers to automatically transfer wages into their bank accounts.
- The employer’s financial institution verifies direct deposit payroll ACH files, ensuring accuracy and compliance before submitting them to the ACH network.
- The ACH operator routes the transaction to the payee's financial institution, which is where the employee holds their account and receives the deposited funds.
- The settlement of the transaction between participating financial institutions occurs through the ACH network, which facilitates the netting of debits and credits between banks.
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Description
Test your knowledge on ACH credit transactions and the roles of employers and employees in the direct deposit process.
