What is ACH?
ACH stands for Automated Clearing House. It is a secure, electronic network used in the United States to transfer funds between different banks and credit unions. It is the underlying system used to process everyday electronic payments like direct deposit paychecks and recurring bill payments.
What is NACHA?
NACHA is the National Automated Clearing House Association is the non-profit organization that governs and develops the operating rules for the U.S. ACH Network. The ACH system processes billions of electronic payments annually, including direct deposits.
NACHA News & Updates
Understanding the 2026 ACH Rules Update for Corporate Originators and Third-Party Senders
by Shelly Sipple, AAP, AFPP, APRP, NCP, Director, Certifications & Continuing Education, EPCOR, 2026
Several important ACH Rules amendments take effect beginning in 2026 that will impact how companies originate ACH payments. Additional amendments, effective in 2027 and 2028, may require additional preparation time. It’s essential for companies to understand these changes to maintain compliance and ensure efficient payment-processing operations.
Standard Company Entry Description
Effective March 20, 2026, companies must use standardized Company Entry Descriptions for certain transactions. While the 10 character field typically allows flexibility, the ACH Rules now require that Prearranged Payment and Deposit (PPD) credits related to employment compensation use PAYROLL, and WEB debits for e-commerce or online retail purchases use PURCHASE. These standardized descriptions help ensure consistent identification of these transaction types across the ACH Network.
Origination Fraud Monitoring
Starting in 2026, companies will be required to have risk-based fraud monitoring practices in place for all ACH payments they originate, regardless of payment type. Phase 1 is effective March 20 for companies originating 6M+ transactions in 2023, and Phase 2 is effective June 19 for all companies, regardless of annual origination activity. The goal is to reduce successful fraud attempts by identifying payments that may be unauthorized or authorized under false pretenses. Unauthorized payments occur when a fraudster gains access to online banking credentials, while payments authorized under false pretenses result from social engineering schemes—such as business email compromise or vendor or payroll impersonation—where an employee is tricked into sending a payment.
Although the ACH Rules do not require automated transaction screening or review of every payment, companies must implement reasonable, documented procedures to detect suspicious activity. While they are not expected to prevent all fraud, companies must make a good faith effort to identify questionable payments before they reach the ACH Network.
To help you prepare for these changes and future amendments, please download the 2026 ACH Rules Update for Corporate Originators and Third Party Senders document.