In Growth Mode? Consider These Things Before Choosing an ACH Processor

By Brandon Orr, Regional Manager

In today’s world of payroll, choosing the right ACH processor can be a time consuming and tedious task. If your company is in growth mode, here are 3 questions to ask your sales representative before making a decision:

1.      Do you have dollar volume limitations? - Many banks and third party ACH processors have certain guidelines in place to help mitigate risk. One of the most common stipulations a bank or other third party processors will impose is a daily dollar volume limitation. Whereby, the Service Bureau has a cap on the dollars that can be processed on a daily basis. As you are in growth mode, whether by acquisition or traditional sales, the dollar volume you will process as a result of bringing on new business will increase as well - resulting in hitting a daily threshold.

2.     How well do you know my industry? - Many payroll service bureaus seek out ACH processors who are the least expensive. From time to time you will need assistance or have questions regarding the processing of your transactions. As the processing of ACH transactions is a vital part of the services a payroll company provides, you should have a partner that has experts on board that can answer any and all questions you may have. To avoid being transferred from department to department, ask up front, how well do you know the payroll industry? Do you have a department or team of people that are solely dedicated to assisting your ACH clients when there is an issue or question?

3.      Are you bonded and insured? - We can all agree that the payroll industry is an extremely competitive market. Not only must service bureaus strive to maintain their competitive edge in the marketplace by staying up to date with the latest technology, but they must also give end user clients a sense of security. A bond will do just that. Partnering with an ACH processor that has a crime bond should be a requirement as you complete your due diligence process. A crime bond will protect client funds in the event the third party processor creates some sort of felonious activity while the client funds are in their possession. With a crime bond, you can promote and market that you’re bonded. This will help to drive more business and place the service bureau on an even playing field amongst much larger payroll companies. Keep in mind that ACH transactions processed by banking institutions are not insured through the FDIC.

      What other questions would you add to this list?

7 Things You Should Do In the Event of a Client NSF

1. Determine if you have time to redraft or must require an immediate wire.

2. Determine if you want to set-up a reserve (or larger reserve) account for a client who NSFs often.

3. Determine if permanent wire is necessary for the client.

4. Ensure you’re not absorbing NSF fees. If so, add your own service fees.

5. Determine if client is worth your company’s time and risk.

6. Require file sent to you earlier than regular deadline.

7. Ensure client’s business is succeeding and profitable.

The Ins and Outs of the NACHA Rule Making Process

NACHA- the Electronics Payments Association, is one of the largest, and most secure payment systems in the world.  It is the governance of the ACH Network for the United States and moves over 20 billion payments annually. In order for a network of this scale to function properly, it requires a standard set of rules and regulations.  The NACHA Operating Rules provide the legal base for the exchange of ACH payments and define the roles and responsibilities of financial institutions and other participants in the ACH Network.  The process of proposing rules and amendments involves a standard procedure with the final decision made by the NACHA voting membership, the decision makers for the NACHA Operating Rules.

The first step to proposing a new or editing an existing rule is to complete the Business Idea Submission Form.  The submission should include the business idea, define its objectives, and identify a project sponsor, potential participants, and a primary NACHA staff contact.  This streamlined process was created to encourage new business ideas and ensure that each proposal is given equal thought and consideration.  For more information about this process or to view the status of your submitted ideas, visit the NACHA Website.

When an idea is submitted, it then follows the standard NACHA Rulemaking Process.  The idea first goes through the steps shown below and if it passes through each committee it reaches the Request for Comment (RFC) stage.  This stage allows the proposal to be posted on the NACHA website and members are able to give their opinions on whether or not they think it should be made an official rule. 

Members’ comments are then compiled by NACHA staff and provide the Standard Rules Group (SRG) with an analysis. The SRG is a committee of appointed NACHA members that decide whether or not proposal is worth pursuing.  Once a few legal and administrative steps are taken, a ballot is created and sent to voters who make the final decision on whether or not the rule is passed. 

NACHA allows every member’s voice to be heard and ensure that all rules are focused on making the ACH system as efficient and safe as possible.  There are many ways to get involved in the rule making process, check on the NACHA website to learn more for details and open committee positions.

Material in this article was found on the NACHA website.  Please refer to the NACHA website directly for more information.