![]() The originator’s bank is known as the originating depository financial institution (ODFI) while the receiver’s bank is the receiving depository financial institution (RDFI). If you are a fintech looking to enable ACH payments for your end-users, you would be simply passing on instructions from your end-users, who would be originating the transaction. The originator of an ACH can be an individual, an organization, or a governmental organization. Specifically, you are authorizing the merchant’s bank to pull funds from your bank account. On the other hand, if you are making an online payment through a retailer and using your debit card to fund the transaction, you are initiating an ACH debit. ![]() As an example, if your employer is paying you through direct deposit or if the IRS is paying your tax refund via an ACH, that is an ACH credit because your employer or the IRS in that example is pushing funds from its bank account to yours. When an ACH credit is initiated, funds are pushed into an account whereas an ACH debit entails funds being pulled out of a directed account. Watch our webinar on transaction monitoring for compliance tips ACH debit vs ACH creditĪCH payments are categorized into two buckets: ACH debits and ACH credits. Want to transfer your Venmo balance to your bank account at no cost? Click on the little blue bank icon and send it via ACH. The payment method is indeed an extremely common feature in fintech and embedded banking apps. If you link your checking account to your Starbucks app, you are leveraging ACH rails to purchase your coffee. Paying your taxes online via “direct pay” from your bank account is another example of ACH. When you receive a direct deposit from your employer, payment is facilitated and completed through an ACH transfer.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |