Where ACH is the customary method of payment.
ACH is suited to obligations that are known in advance, owed by a party with whom the originator already has a relationship, and collected on a recurring or scheduled basis. The sections below set out how it is applied in the industries Embank serves.
Application by industry
The Standard Entry Class code applicable to an entry follows from the account type and the manner in which authorization was obtained, not from the industry itself. The table below indicates the codes most commonly used in each.
| Industry | Typical entries | Direction | Common SEC codes |
|---|---|---|---|
| Property management | Rent, deposits, owner distributions | Debit and credit | PPD, CCD |
| Education | Tuition plans, program fees, refunds | Debit and credit | PPD, WEB |
| Membership | Dues and periodic assessments | Debit | PPD, WEB |
| Business services | Invoices on terms, retainers | Debit | CCD, CTX |
| Nonprofit | Recurring contributions | Debit | PPD, WEB |
| Professional services | Payment plans, scheduled billing | Debit | PPD, CCD |
Selection of the correct SEC code, and satisfaction of the authorization requirements attaching to it, remain the responsibility of the originator and its ODFI.
Considerations by industry
Rent, deposits and owner distributions
Rent is collected on a fixed day against an amount established in a signed lease, which satisfies the written authorization contemplated for PPD entries. Owner distributions are originated as credits on the same schedule. Trust accounting obligations in some jurisdictions govern how collected funds are held and disbursed.
Tuition plans and program fees
Payment plans run for a term or an academic year against amounts set at enrollment. Because plan instalments are scheduled well in advance, standard settlement is generally sufficient, and returns are worked as a receivables matter rather than at the point of transaction.
Dues and periodic assessments
Membership terms are typically long, and account information collected once tends to remain valid across the life of the membership. Where a member revokes an authorization, entries must cease within the period the rules allow, and the revocation is recorded against the mandate.
Invoices on terms and retainers
Entries to business accounts are originated as CCD, or as CTX where structured remittance information is carried in addenda records for automated reconciliation by the receiver. Business accounts frequently carry debit filters, which must be authorized by the receiver before entries will post.
Recurring contributions
Recurring contributions are authorized once and continue until revoked. Where authorization is obtained through a web or mobile channel, the WEB account validation requirement applies to the first entry to a given account.
Payment plans and scheduled billing
A balance paid down over several months is a standing authorization for a defined series of entries. The authorization should state the amount or amount range, the frequency and the number of instalments, and that record is retained against the mandate.
Origination on behalf of your customers
A software platform serving one of these industries may originate entries on behalf of the businesses that use it. Each of those businesses is established as a separate originator, with its own identity, limits, reporting and settlement, under a single integration maintained by the platform.
The allocation of responsibility between the platform and the underlying businesses — for authorization, for return exposure and for funding — is set out in the agreements entered into at onboarding.
Separate originator identities
Each business onboarded through the platform holds its own originator record, limits and settlement reporting.
One integration
The platform maintains a single API integration and submits on behalf of any originator it has onboarded.
Commercial terms
Participation in the economics of volume originated through the platform is established per partner.
Where ACH is not the appropriate method
ACH is a batch settlement network with a delay between submission and settlement, and a return period that extends beyond it. Certain transaction types are poorly served by those characteristics, and a card or real-time method is the correct choice for them.
Discuss your application
Describe how you bill and we will indicate whether ACH is the appropriate method before quoting on it.