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Financial Institution

Any bank, savings and loan, credit union or other institution organized under either national or state banking laws capable of both accepting deposits and making loans.

FTC

Federal Trade Commission.

Hash

A mathematical calculation which creates a single number from critical fields in each transaction entry, as a check against inadvertent alteration of data contents due to hardware failure or program error.

Individual Identification Number

The number used in an ACH transaction by the originator to identify the receiver.

IT (Information Technology)

As defined by the Information Technology Association of America (ITAA) is: "the study, design, development, implementation, support or management of computer-based information systems, particularly software applications and computer hardware." In short, IT deals with the use of electronic computers and computer software to convert, store, protect, process, transmit and retrieve information.

Item

An electronic record representing the movement of funds.

IVR

Interactive Voice Response allows payment transactions to be originated through a telephone.

Lockbox

A financial institution, which facilitates rapid collection and posting of corporate receivables. Typically, customer payments are mailed to the bank's lockbox for collection, sorting, totaling and recording by the bank rather than by the company that issued the bill.

Machine Readable

Describes data in a form that is processable by a mechanical device without the need for further translation; magnetic tape, MICR, etc.

Magnetic Ink Character Recognition (MICR) Line

The preprinted bottom line of a paper check contains the routing transit number of the financial institution the check is drawn on, the account number of the drawee and the check number printed in machine readable magnetic ink.

MATCH

When consumers do not honor the terms of their credit card agreements, the issuing bank for the card may revoke the credit line. If the consumer applies for additional credit, the new creditor queries a credit reporting agency and may learn of the consumer's previous performance, including loss to a previous creditor. The merchant processing banks, also known as “acquiring” banks, do not have a similar credit-reporting agency available that can compile and report information about the way that a business handles its merchant processing responsibilities. The card associations, instead, use a file known as “MATCH.” The MATCH File is a database file, previously and most commonly known as the Terminated Merchant File “TMF.” It is maintained by MasterCard International and is the way by which MasterCard and Visa acquiring banks identify merchants, as well as the principals, which have been terminated for specific reasons.

Memo Posting

An interim procedure in which credits and debits are recorded in individual accounts in a manner that allows financial institutions to reflect deposit information prior to actual posting.

NACHA

National Automated Clearing House Association (NACHA) – The national trade association for the electronic payment associations, which establishes the rules, industry standards, and procedures governing the exchange of commercial ACH payments by depository financial institutions.

NACHA Format

The ACH record format specifications described in the NACHA Operating Rules and Guidelines, which are the accepted and warranted payment format standards for payments delivered through the ACH network.

NEACH

New England Automated Clearing House is one of 8 regional districts that help NACHA more effectively do their job. It is a non-profit association that helps its members originate and receive ACH (electronic) transactions and provides products, services, education and marketing to increase the acceptance, use and quality of electronic transactions. This is Innovative Payment Solutions regional provider.

Notification of Change

Information sent by an RDFI to notify the ODFI that previously valid information for a receiver has become outdated or that information contained in a pre-note is erroneous. These items have the standard entry class code COR.

On-Us

Entries within an ACH file destined to accounts held at the ODFI. These entries are removed from the file before the file is sent to the ACH operator and are posted internally to the appropriate accounts.

Operational Field

The inclusion or omission of an optional field is at the discretion of the Originator of an ACH transaction. While the omission of optional fields will not affect the processing of the item, the Originator must still fill optional fields with blanks or other characters if they do not fill the field with actual information.

Originating Depository Financial Institution (ODFI)

The financial institution, which delivers ACH entries directly or indirectly through a third party to its ACH operator.

Origination

The process of creating ACH entries for submission through an ODFI to the ACH operator.

Originator

The person or organization who has authorized an ODFI to transmit a credit or debit entry to the account of a Receiver with an RDFI, or if the Receiver is also the RDFI, to such Receiver. In some cases the ODFI may also be the Originator.

Payment System

A communication system having the provisions to provide financial settlement information.

PCI Certification

The Payment Card Industry Data Security Standard (PCI DSS) Program is a mandated security initiative that was created to offer merchants and service providers a complete, unified approach to safeguarding credit cardholder information for all card brands. The collaboration between Visa and MasterCard on the PCI DSS have created common industry security requirements to which all merchants and service providers who handle credit card data MUST comply with.

PPD (Pre-arranged Payment or Deposit)

An automated consumer payment application, usually in the context of a standing obligation, which debits or credits the consumer's account at their financial institution to satisfy that obligation. Examples of PPD transactions are Direct Deposit of payroll, Direct Payment of charitable contributions and so forth.

PPD+ (PPD PLUS)

An automated consumer payment application, which carries additional information about the transaction in the single attached addenda record.

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