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ACH and Check21 are incredibly cost effective methods to receive payments, saving your customers approximately 2.50% of the transaction amount compared to credit cards.
Best of both worlds
There are two main protocols for bank to bank transfers. Since both protocols involve the exchange of money but require different rules they are typically managed as two separate systems within the bank. Accordingly, ACH deposits are split from Check21 deposits and will appear as separate entries on a bank statement.
The PiConnect ACH21 API is configured to allow us to manage both as a single workflow even though the rules and file formats differ.
ACH is an acronym for the “Automatic Clearing Housing”. ACH provides a standard file format that allows banks to exchange payment information through an exchange or the US Federal Reserve. The rules for exchanging files and the file format are published and maintained by the National Automated Clearing House Association (NACHA), thus providing a common foundation for the exchange of all files. The system operates on the basis of trust backed up by “inspect what you expect”. Accordingly, depending on the information comprising a file and a determination of how the file is “originated” it falls under different classifications and different sections of the rules. The classifications are referred to as Standard Entry Classification or SEC. If a transaction does not fall within the rules it is not allowed and will be rejected. Some types of bank accounts are also excluded.
Check21 refers to a law passed by congress and effective in 2004 that allows banks to electronically exchange checks using images of the checks (Check Clearing Act of the 21st Century). Since this is a federal law the rules are set under the rule making authority of the Federal Reserve and have the force of law.
The Check21 method allows any paper instrument(except cash) that would be eligible to deposit at a bank teller window, to be deposited or cleared using the rules and law governing Check21. Accordingly, many items excluded by ACH are allowed under Check21.
PiConnect ACH21 features Smart Routing
Because PiConnect ACH21 manages ACH and Check21 into a single workflow, we have the ability to route to the most effective option, minimizing risk and costs for your customers.