MIAMI BEACH, Fla.—The popularity of ACH is growing, but for companies either dipping a toe in the water or looking to expand ACH use, there’s a lot to consider—and it’s tough to go it alone.

“In the last 18 months we’ve definitely seen more players within the ACH Network reach out for support and guidance to bring their ACH processing in-house. Whether it’s a financial institution, corporate end user, or a fintech that’s offering payment services, we’ve seen more interest, and they’re coming to us looking to expand their role in the ACH Network, build out new ACH capabilities, or reduce reliance on outside parties for onboarding and processing,” said Samantha Carrier, Associate Managing Director, Nacha Consulting. 

Examples include RDFIs looking to become ODFIs, companies wanting to add Same Day ACH capabilities, and—in a case study highlighted at Smarter Faster Payments 2024—QuickFee, a company that went from being a third-party service provider to a Third-Party Sender doing their own origination. 

“It was a little tough to have to work through another party for our ACH processing,” said Kerrie Kulak, AAP, APRP, Vice President, ACH and Settlement Operations, at QuickFee, which processes payments for legal and accounting firms. Clients wanted better reconciliation, which QuickFee’s processor did not provide. It led QuickFee to decide it was time to “own our ACH processing,” said Kulak. In September 2022 they began doing their research on how to proceed, never expecting that a few months later it would become significantly more urgent.

“Come March of 2023, that’s when the Silicon Valley Bank failed. And we didn’t know at the time that the vendor we were using went through Silicon Valley—and it was the only bank that they used,” said Kulak. “It was a very stressful situation. Fortunately, we were able to get back on track, but that really pivoted our mindset” to not only own their ACH processing but also ensure redundancy by having more than one bank. 

At that point, QuickFee enlisted Nacha Consulting to assist in its transformation, and worked with Kerry Sellen, AAP, APRP, Senior Consultant at Nacha Consulting. Sellen said there are many reasons why firms like QuickFee want to handle processing themselves.

“One of the drivers is cost savings, because if they have another intermediary like QuickFee did you’re paying that organization for your ACH processing, the ACH fee, so you have additional costs there,” said Sellen. “They want to eliminate the third-party service providers and be able to process their transactions directly to an ODFI.”

Sellen said organizations considering such a move should look at their business case and “make sure they can explain the project’s benefits, the cost, and why it should be executed. And then understand the value,” including objectives and expenses, and decide whether to proceed. 

Another motivator: Control of product features—and keeping them out of the hands of rivals.

“A lot of times they’ll go to the processor and say, ‘We’d like to add this,’” said Sellen. The processor will develop whatever is needed, and then turn around and “offer that service to other clients, so that one organization paid for the development, because they asked for it, but the processor is actually offering it to other organizations for a fee.” 

Other things that Nacha Consulting advises clients like QuickFee to consider include whether they have the in-house expertise to do all that is necessary to comply with the ACH Rules, because, as Sellen noted, “A Third-Party Sender, if you think about it, they’re almost stepping into the shoes of the ODFI. There’s a lot of warranties of the ODFI that you’re taking over.”

Organizations also need to think about whether they need new policies and procedures, and/or updates to existing ones, as well as whether additional staffing is necessary. Other necessities include ACH risk assessments and ACH origination agreements.

When launch time came for QuickFee, Kulak said they began with an early adopter pilot program, which enabled them to “figure out what the kinks are and get rid of them” before a full rollout. 

QuickFee found the expertise provided by Nacha Consulting was invaluable, and Kulak said other companies considering taking charge of their ACH processing should seek out their expertise.

“I really found value to it. It was great working with Kerry,” said Kulak. “One of the banks that we’re processing with is requiring us to do our Nacha audit. Even though we have little transactions in the last couple of months to base our audit off of, I know I have comfort, I’m in a good position.”

Learn more about Nacha Consulting and how to request a complimentary 15-minute consultation.