ACH Automated Clearing House is one of the Federal Reserve Board's mechanisms for the Interbank electronic transfer of funds.

ARC Accounts Receivable Truncation (SEC Code) is used when converting checks received in the mail to electronic items for settlement through the Automated Clearing House. ARC requires the use of a MICR reader to enter the account information and ABA to the submission software.

Business Account An account at a depository financial institution owned by other than a natural person, that is, a legally organized business entity, and used for the purchase of goods and services, and payment of business obligations.

Consumer Account An account at a depository financial institution owned by a natural person and used for the purchase of household goods and payment of household obligations.

CCD Corporate Concentration or Disbursement (SEC Code) is used when debiting a remote business account to concentrate funds in a corporate account, or crediting funds to a vendor, supplier, service provider, or other account as payment for products or services received.

Direct Deposit The use of the Automated Clearing House to initiate credits from a company payroll account to an employee's personal account for the net amount of the period's paycheck, or similarly for expense reimbursement, bonuses, or other needed transfer of funds. Direct Deposit payroll transactions are always PPD.

ECC Electronic Check Conversion. A paper check presented for purchase of goods or as payment for services rendered, converted to an electronic item for settlement through the Automated Clearing House.

MICR Magnetic Ink Character Recognition. The magnetic ink character recognition line at the bottom of a paper check.

NACHA National Automated Clearing House Association.

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

ODFI Originating Depository Financial Institution.; A participating Depository Financial Institution that initiates ACH entries at the request of and by agreement with its customers. ODFIs must abide by the provisions of the NACHA Operating Rules and Guidelines.

POP Point-Of-Purchase (SEC Code) debit or credit entry through the Automated Clearing House to a consumer account as defined by NACHA operating Guidelines.

PPD Pre-arranged Payment and Deposit (SEC Code) is the code used for Direct Deposit and Pre-authorized Bill payments through the Automated Clearing House system.

R Codes Returned Item Codes are used by ACH Participants (DFI's) to specify the reason an item is being returned by the receiver's Financial Institution. Click here for a list of the codes.

RCK Re-presented Check Entry (SEC Code), also known as RCK LockBox Truncation, is used to re-present a returned paper check item to the receivers bank through the Automated Clearing House as an electronic item. Items presented as RCK may only be re-presented twice.

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

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

SEC Codes Standard Entry Class Codes are the codes assigned to transactions to identify the type of transaction submitted to the ACH. Each SEC Code has its own set of rules and operating requirements that govern the use and application of such SEC code.

Truncation The conversion of an item from a paper check to substitute check for deposit or an electronic item for submission through the ACH for settlement.

TEL Telephone Initiated Entries (SEC Code) are for items where authorization to debit the account is received during a telephone conversation. There are rules regarding the method and contents of authorization (available in our WebCheck Reference Manual) for TEL transaction.

WEB Internet Initiated Entry (SEC Code) is used for transaction that are 100% Internet based, and have no other human interaction involved in the transaction than the receiver entering their data to a Web page.