Note: Narmi cannot reverse ACH transactions. In cases where a transaction needs to be reversed, such as a rejected transaction or customer request, your institution is responsible for reversing the transaction and removing any holds from the core.
ACH (Automated Clearing House) is an electronic network and system in the United States used for the secure and automated transfer of funds between financial institutions, offering a cost-effective and efficient alternative to paper-based methods. The ACH Network is run by NACHA, the National Automated Clearing House Association. ACH is used for financial transactions such as direct deposits, bill payments, and electronic transfers. There are two main types of ACH transactions—ACH credits (such as paychecks) and ACH debits (such as auto-payments for bills).
Narmi supports two ACH transaction use cases:
ACH transfers – Me-to-me transfers to or from a verified external account. For example, a customer moving money from their checking account at Bank A to their savings account at Bank B. We support push (credit) and pull (debit) ACH transfers.
ACH payments (businesses only) – Push (credit) payments to third parties that are not verified external accounts. For example, a business payer pushes funds to the recipient’s account, such as direct deposit payroll. Note: We do not support pull (debit) ACH payments at this time.
The ACH network is not a real-time system. Transactions are processed in batches at specific times and only when the Federal Reserve's settlement service is open. This is why ACH transactions may take days to settle.
There are two schedules for processing ACH transactions: Regular (Next Day) ACH and Same Day ACH. Additionally, Narmi offers a feature called Real-Time Posting (RTP). All three are explained in this article.
Regular (Next Day) ACH
For Regular ACH, the Effective Entry Date for each transaction in the generated NACHA file is set to the next business date. This instructs the Federal Reserve to settle those transactions on the next business date as long as the file is received by them before the next-day cutoff time. The transaction is then processed on the next business date, and funds are made available if there are no returns.
Narmi only generates a NACHA file once per business day. This process is governed by the ACH Cutoff Time specified in Narmi Command under Configurations > Institution settings. Both institution settings below must be configured in Narmi Command for Regular ACH functionality:
ACH Cutoff Time –The cutoff time used for automated NACHA file generation, if configured. The value entered must be a whole integer representing the start of the hour in your financial institution's timezone. This setting only accepts integers from
0to23, representing a 24-hour day. For example, if your desired cutoff time is 6:00 pm, the value entered should be18. There is no default value.ACH File SFTP Delivery URL – The URL of the SFTP server to automatically deliver the NACHA file shortly after the ACH cutoff time. Please contact your Narmi Relationship Manager to configure this URL.
ACH Payment File SFTP Delivery URL – The URL of the SFTP server to automatically deliver the Unverified ACH Payment NACHA file shortly after the ACH cutoff time. Please contact your Narmi Relationship Manager to configure this URL.
Narmi AO ACH File SFTP Delivery URL – For institutions with Narmi AO ACH Service enabled, this is the URL of the SFTP server to automatically deliver the Narmi AO NACHA file shortly after the ACH cutoff time. Please contact your Narmi Relationship Manager to configure this URL.
Same Day ACH
For Same Day ACH, the Effective Entry Date for each transaction in the generated NACHA file is set to the current day instead of the next business date. This instructs the Federal Reserve to settle those transactions on the same day, provided it receives the file before the ACH cutoff time. The transaction is then processed the same business day, and funds are made available if there are no returns.
Narmi only generates a NACHA file once per business day. This process is governed by the ACH Cutoff Time specified in Narmi Command under Configurations > Institution settings. This setting must be configured in addition to the Same Day settings listed below.
Please note that NACHA imposes a higher per-item cost and, as of March 18, 2022, there is a $1,000,000 limit per transaction on Same Day ACH entries. Transactions over this limit will still be processed if permitted by the user’s segment limits in Narmi, but will be processed as a regular (next-day) ACH by the Federal Reserve.
Future scheduled ACH payments will be processed Same Day on the chosen date.
The following institution settings must be configured in Narmi Command for Same Day ACH functionality:
ACH Use Same Day – This determines whether ACH transfers and loan payments originating in Narmi Banking should be sent via Same Day ACH. The default value is
false. Set this value totrueto enable Same Day ACH.ACH Payments Use Same Day – This determines whether ACH payments originating in Narmi Banking should be sent via Same Day ACH. The default value is
false. Set this value totrueto enable Same Day ACH.AO Narmi ACH Use Same Day – Determines whether ACH for funding newly-opened accounts using the Narmi AO ACH Service should be processed as Same Day ACH. The default value is
false. Set this value totrueto enable Same Day ACH.ACH Cutoff Time –The cutoff time used for automated NACHA file generation, if configured. The value entered must be a whole integer representing the start of the hour in your financial institution's timezone. This setting only accepts integers from
0to23, representing a 24-hour day. For example, if your desired cutoff time is 6:00 pm, the value entered should be18. There is no default value.ACH File SFTP Delivery URL – The URL of the SFTP server to automatically deliver the NACHA file shortly after the ACH cutoff time. Please contact your Narmi Relationship Manager to configure this URL.
ACH Payment File SFTP Delivery URL – The URL of the SFTP server to automatically deliver the Unverified ACH Payment NACHA file shortly after the ACH cutoff time. Please contact your Narmi Relationship Manager to configure this URL. Note: If your institution supports a mix of Same Day and standard ACH (i.e. for expedited bulk ACH payments), the same day files will be delivered to the “ACH Payment SFTP Delivery URL” and the file name appended with
_same_day.Narmi AO ACH File SFTP Delivery URL – For institutions with Narmi AO ACH Service enabled, this is the URL of the SFTP server to automatically deliver the Narmi AO NACHA file shortly after the ACH cutoff time. Please contact your Narmi Relationship Manager to configure this URL.
Please contact your Narmi Relationship Manager with questions about enabling Same Day ACH.
Option to Choose Same Day ACH for Bulk Payments
Your institution can control whether to offer users the choice to use Same Day ACH for bulk ACH payments. Please contact your Narmi Relationship Manager to enable this choice. This requires that your institution is operationally prepared to process same-day ACH. For more information, go to Make a Bulk ACH Payment.
To enable Same Day ACH for ALL transactions, use the ACH Use Same Day, ACH Payments Use Same Day, and/or AO Narmi ACH Use Same Day institution settings mentioned above.
NACHA Cutoff Times
The cutoff time for Narmi ACH processing (specified by the “ACH Cutoff Time” setting described above) is separate from the system-wide ACH cutoff times defined by NACHA. For NACHA cutoff times, visit ACH Schedules and Funds Availability on NACHA's website.
Real-Time Posting (RTP)
We offer a feature called Real-Time Posting (RTP) in Narmi Banking that allows users to see the activity in their Ledger much faster. RTP is the process of posting the ACH transaction to the user's account after an ACH push or pull request is initiated, but before the NACHA file is generated. When an external ACH pull request is made, Narmi places a hold on the transaction, posts it to the user's account, and offsets it to a General Ledger (GL) account in the financial institution's core banking system. For instructions, go to Use ACH Manager for Real-Time Posting.
Your institution must request the RTP feature, as it is not enabled by default.
For additional information, go to ACH Best Practices.
Notification of NACHA File Delivery Failure
When the NACHA file successfully generates, but SFTP fails, we send an email to the designated staff at your institution. This email notifies them of the failure and provides a link to the ACH Manager in Narmi Command, where they can download the NACHA file or contact support. To configure recipients for this email, go to Narmi Command under Configurations > Institution settings > NACHA SFTP Failure Email Recipients.