Nacha Adopts New Operating Rules to Modernize ACH Payments

8 new amendments will make it easier for consumers and organizations to use ACH payments.

To help modernize ACH payments, Nacha announced it had adopted eight new amendments to the Nacha Operating Rules last week. The updates to the nonprofit’s rules address infrastructure improvements, including the support of same day ACH and making automatic clearinghouse payments easier for consumers and organizations to use. Two of the new rules will provide businesses, financial institutions, payment providers and technology companies the ability to authorize consumer ACH payments via new channels and using new technologies that have become more popular with consumers.

Empowering businesses

“Nacha has worked with its membership to develop rules and guidelines that empower businesses, like subscription companies, to collect consumers payments using new technologies and channels,” said Brad Smith, AAP, Senior Director, Industry Engagement and Advocacy.

Subscription businesses and other businesses with recurring revenue will have additional authority under the Nacha rules to enroll customers in recurring or subscription ACH payments. Because consumers change bank accounts infrequently, and accounts and their numbers do not expire like debit or credit cards, ACH can be seamless for consumers and businesses.

Michael Herd, senior vice president of ACH Network Administration, commented on the changes.

Evolving payment ecosystem

“Nacha and our members work to evolve the ACH ecosystem as new business needs arise and as technology changes. These new rules should be useful to the many thousands of businesses and other organizations that enable consumers to conduct transactions using new technologies and channel,” Herd said.

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Additional changes include the following:

  • Several administrative requirements have been reduced, including requirements payment-related documentation requirements and adopting a specific timeline for financial institutions to handle unauthorized payment claims.
  • The rules explain the situations in which reversing ACH payments are invalid, which will help Nacha enforce their rules for violations.

“The modern ACH Network is thriving,” said Herd. “As these new rules take effect throughout 2021, along with the expansion of Same Day ACH, the ACH Network will remain a compelling and effective payment choice for consumers and businesses.”

As a nonprofit organization, Nacha works with hundreds of organizations to utilize ACH payments and provide for financial data exchange. Nacha has developed rules, standards, governance, education and advocacy to support the ACH Network, a payment system that connects all U.S. bank accounts and facilitates the movement of both money and information. Originally developed in 1974, Nacha’s Operating Rules direct how the ACH Network is operated, so that it remains safe and efficient. Last year, 24.7 billion payments and close to $56 trillion were moved via the ACH Network.

Insider Take

Many of us use ACH payments to pay recurring expenses like mortgages, rent, utility bills, insurance and credit card payments. ACH payments are a trusted, convenient payment type that subscription companies can offer as a payment option for their subscribers. The new rules will also expedite ACH payments for consumers and businesses, and make it easier for businesses to offer ACH payments as a payment option.