Posted August 22, 2016
Registration Requirements Will Support Financial Institutions’ Risk Mitigation Efforts and NACHA’s Efforts to Maintain Quality of the ACH Network
HERNDON, Va., Aug. 22, 2016 - NACHA —The Electronic Payments Association® announced today that a new rule was approved that will require Originating Depository Financial Institutions (ODFIs) to identify and register their Third-Party Sender customers. The registration process will promote consistent customer due diligence among all ODFIs, and serve as a tool to support NACHA’s continuing efforts to maintain ACH Network quality.
“Third-parties serve a valuable role in the ACH Network, supporting many of the users of ACH payments,” said Janet O. Estep, president and CEO of NACHA. “Third-Party Sender Registration builds upon other recent rules that enable the ongoing growth of the ACH Network while implementing appropriate risk management monitoring.”
In the ACH Network, a Third-Party Sender is a processing intermediary between a financial institution and an end-user of ACH payments. The Third-Party Sender Registration Rule, which becomes effective Sept. 29, 2017, will require ODFIs to provide a limited set of initial, basic registration information, such as name of business and contact information, for each Third-Party Sender with which it maintains a relationship. ODFIs that do not maintain any Third-Party Sender relationships will be required to provide a statement to that effect.
To help support the industry with managing and identifying Third-Party Sender relationships, NACHA has developed a number of tools and resources, including a Third-Party Sender Identification Tool, as well as an Operations Bulletin that provides examples to help ACH participants properly categorize the parties in payment scenarios involving payment intermediaries, many of which are Third-Party Sender relationships. NACHA will continue to educate the industry with other tools and resources to better understand third-parties and their roles.
For more information about the Third-Party Sender Registration Rule, visit https://www.nacha.org/rules/third-party-sender-registration. For more information about third-parties, visit https://www.nacha.org/third-party-sender-identification-tool.