The Nacha File Format is a standard format specified by National Automated Clearing House Association (Nacha) to facilitate capturing debit or credit transactions against bank accounts.
Financial institutions that need to perform monetary transactions, such as paying bills, crediting or depositing money, typically use the Nacha standard. Those transactions are typically performed against bank accounts for individuals or organizations.
The Nacha standard captures these transactions in a consistent and standard manner.
Billions of transactions are performed using the Nacha standard every year.
The Nacha format allows for the standardization of transactions across banks and financial institutions. This standardization allows for the seamless processing of transactions and better security of sensitive information.
Automated Clearing House (ACH) has become the go-to network for B2B transactions and moves billions of transactions a year.
Nacha format guide is available on the Nacha website.
An ACH return file is a notification sent by a bank indicating that an ACH payment transaction has failed and is being returned. This file includes details about the reason for the return, such as insufficient funds or incorrect account information.
Click here to learn about ACH Return Codes
An ACH reversal file is a specific type of file used to reverse an erroneous ACH payment. It must follow certain formatting rules, including marking the Company Entry Description as “REVERSAL” and ensuring that other key fields match the original entry to facilitate proper processing.
A prenote or prenotification is a zero dollar payment to validate the account and routing details of a bank account before debiting or crediting it.
SEC codes are essentially the descriptors of the NACHA file, defining the type of transactions involved. Each SEC code has a specific purpose, and including the correct code is essential to avoid rejections and errors.
Below are a few examples of SEC codes:
