NACHA Announces Approval of Rule that Establishes Third-Party Sender Registration Requirements

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Registration Requirements Will Support Financial Institutions’ Risk Mitigation Efforts and NACHA’s Efforts to Maintain Quality of the ACH Network

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Third-Party Sender Registration builds upon other recent rules that enable the ongoing growth of the ACH Network while implementing appropriate risk management monitoring.

The Electronic Payments Association® announced today that a new rule was approved that will require Originating Depository Financial Institutions (ODFIs) to identify and register their Third-Party Sender customers. The registration process will promote consistent customer due diligence among all ODFIs, and serve as a tool to support NACHA’s continuing efforts to maintain ACH Network quality.

“Third-parties serve a valuable role in the ACH Network, supporting many of the users of ACH payments,” said Janet O. Estep, president and CEO of NACHA. “Third-Party Sender Registration builds upon other recent rules that enable the ongoing growth of the ACH Network while implementing appropriate risk management monitoring.”

In the ACH Network, a Third-Party Sender is a processing intermediary between a financial institution and an end-user of ACH payments. The Third-Party Sender Registration Rule, which becomes effective Sept. 29, 2017, will require ODFIs to provide a limited set of initial, basic registration information, such as name of business and contact information, for each Third-Party Sender with which it maintains a relationship. ODFIs that do not maintain any Third-Party Sender relationships will be required to provide a statement to that effect.

To help support the industry with managing and identifying Third-Party Sender relationships, NACHA has developed a number of tools and resources, including a Third-Party Sender Identification Tool, as well as an Operations Bulletin that provides examples to help ACH participants properly categorize the parties in payment scenarios involving payment intermediaries, many of which are Third-Party Sender relationships. NACHA will continue to educate the industry with other tools and resources to better understand third-parties and their roles.

For more information about the Third-Party Sender Registration Rule, visit https://www.nacha.org/rules/third-party-sender-registration. For more information about third-parties, visit https://www.nacha.org/third-party-sender-identification-tool.

About NACHA—The Electronic Payments Association
Since 1974, NACHA – The Electronic Payments Association has served as trustee of the ACH Network, managing the development, administration and rules for the payment network that universally connects all 12,000 financial institutions in the U.S. The Network moves money and information directly from one bank account to another. Through its collaborative, self-governing model, education, and inclusive engagement of ACH Network participants, NACHA facilitates the expansion and diversification of electronic payments, supporting Direct Deposit and Direct Payment via ACH transactions, including ACH credit and debit payments, recurring and one-time payments; government, consumer and business transactions; international payments, and payments plus payment-related information. Through NACHA’s expertise and leadership, the ACH Network is now one of the largest, safest, and most reliable systems in the world, creating value and enabling innovation for all participants. Visit nacha.org for more information.

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Kendra Beasley
NACHA - The Electronic Payments Association
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