ACH payments are electronic payments to third-parties that are not verified external accounts, such as a business paying a vendor. This differs from ACH transfers which are me-to-me transfers to or from a verified external account. ACH payments provide a secure, cost-effective, and efficient way to move funds, making them a popular choice for businesses handling payroll, vendor payments, customer billing, tax payments, and more.
ACH payments have several benefits to business users, including:
Lower costs – ACH transactions typically have lower fees than wire transfers and card payments.
Increased efficiency – Automating payments reduces the time and effort required for manual processing.
Security and reliability – ACH payments are processed through a regulated network, minimizing fraud risks.
Note: At this time, Narmi only supports ACH credit payments, meaning the payer pushes funds to the recipient’s account, such as direct deposit payroll. Narmi does not currently support ACH debit payments where the recipient pulls funds from the payer’s account with prior authorization, such as monthly utility bill payments.
ACH payments are only available to business users (not consumer users). ACH payments can be offered to all your business users or only to a specific segment. For more information on segments, go to Segmentation.
The Payments ACH Manager in Narmi Command allows staff members to view individual ACH payment details, as well as review ACH payments that have been flagged by risk settings and manually approve or reject them. Your institution can set ACH payment risk rules within Narmi Command in Risk Manager.
How ACH Payments Work
ACH payments are not instant. They typically take 1-3 business days to process, depending on the financial institutions involved and the timing of the payment submission.
Generally, ACH payments use the following process:
The payment originator (business) obtains authorization from the receiver (employee, vendor, or customer). The type of authorization depends on the transaction type.
The originator creates the payment via the banking user interface.
The transaction is analyzed according to risk rules. If it gets sent to “Review,” a staff member must manually approve or reject it. Transactions that clear the risk rules are included in the NACHA file that Narmi generates. This is a separate NACHA file specific to ACH payments that we generate the same way as the NACHA files for ACH transfers and Narmi AO ACH Service.
Narmi sends the NACHA file to your institution via SFTP or API.
Your financial institution receives the NACHA file and is responsible for submitting it to the Federal Reserve for processing.
Funds are released after your institution's hold period ends.
Note: When real-time posting is enabled, your institution can opt to have ACH payment funds credited to a different General Ledger account than the one used for ACH transfers. This applies to the IBS and DNA cores only at this time. Please contact your Narmi Relationship Manager if you would like this functionality supported for a different core.
Business User Permissions for Payments
Business banking users who have Collaborator access can be permitted to send ACH payments. To do this from Narmi Banking, go to Tools > Manage users > edit or add a new Collaborator. Under Permissions, select Send ACH payments.
If you have individual daily limits enabled, enter the individual's daily ACH payment limit. If you have a daily organizational ACH payment limit, the value entered must be less than or equal to that limit to continue. Please contact your Narmi Relationship Manager to enable individual daily limits for business sub-users. Once the individual daily limits are enabled, the default daily limit for new and existing users will be the organization's daily limit. If no organization limit is configured, the default daily limit will be blank.
For more details, go to Manage users.
Institution Settings for ACH Payments
Some payment settings can only be configured by Narmi Support, such as which SEC codes are available to your business users. Your institution can configure the following settings in Narmi Command under Configurations > Institution Settings.
ACH Payments Use Same Day – Determines whether ACH payments originated in Narmi Banking should be sent via Same Day ACH. Please note that NACHA imposes a higher cost per item and, as of March 18, 2022, has a $1 million per transaction limit. Transactions over this limit will still be processed if permitted by the user's segment limits in Narmi but will be processed as a next-day ACH by the Federal Reserve. You must also consider an appropriate cutoff time for Same Day ACH processing. For more information, go to Same Day ACH.
Institution Ach Payment Disclosure – ACH payment disclosure text for the business. This setting supports markdown formatting so that you can add links to additional documentation.
Admin users view this in Narmi Banking under Tools > Manage users > add or edit a Collaborator user > View limits > ACH payment.
All business users can view this disclosure in step 2 of the ACH payment flow > View your ACH limits and disclosures.
Ach Company Id Syntax – Syntax used to create an ACH company_id for a given organization, for the purpose of sending ACH payments. Options are
prepend_ein_with_0orNone. Ifprepend_ein_with_0is chosen, a newly created company with EIN 111111111 will be given an ACH company_id of 0111111111.Features Requiring Elevated Authentication > ach_payments – Determines whether a user must complete a two-factor authentication step prior to submitting a payment. After a user completes the two-factor authentication step, they remain in Elevated Authentication Mode for the length of time in seconds that is specified by Elevated Authentication Mode Duration setting. To ensure that a user has sufficient time to receive and enter their authentication code, this value is typically no less than 20 seconds.
ACH Payment Statuses
Go to Digital Banking ACH Statuses for complete information.