Glossary of ACH Terms

ACH

• Automated Clearing House. This is a payment system that allows electronic transfer of funds between banks/participating financial institutions.

ACH operator:

• An organisation that processes all the ACH transactions which move between banks on the ACH network. It acts as the central financial clearing facility which receives all ACH entries from ODFIs and then distributes these to the relevant RDFIs. In Trinidad and Tobago, the ACH operator is TTIPS.

Originator:

• An organization or company that produces an ACH file and delivers it to an ODFI for introduction into the ACH network.

ODFI:

• A Participating Depository Financial Institution is an ODFI with respect to entries (1) it transmits directly to the ACH Operator for transmittal to an RDFI, and (2) on which it is designated as the ODFI.

Receiver:

• A person that has authorized an Originator to initiate (1) a credit entry to the Receiver’s account with an RDFI, or, if the Receiver is also the RDFI, to such Receiver, or (2) a debit entry to the Receiver’s transaction account or general ledger account with an RDFI, or, if the Receiver is also the RDFI, to such Receiver.

RDFI:

• Receiving Depository Financial Institution. A Participating Depository Financial Institution is an RDFI with respect to entries (1) it receives from its TTIPS Operator for debit or credit to the accounts of Receivers, and (2) on which it is designated as the RDFI.

TTIPS:

• The Central Bank and all of the Major Commercial Banks in Trinidad and Tobago have created a separate company, the Trinidad and Tobago Interbank Payments System to centralize processing of all ACH transactions that move between these banks.