Effectively managing third-party sender risk in the ACH Network

Jeanette A. Fox

Journal of Payments Strategy & Systems, 2012, vol. 5, issue 4, 338-346

Abstract: The Automated Clearing House (ACH) Network offers many options for financial institutions and third-parties to provide transaction processing. In one example, a third-party acts as a sender of ACH transactions by originating debits for its originators through its banking relationship with a financial institution. This role introduces unique opportunities, as well as obligations, for all parties in maintaining diligent risk management processes. This paper focuses on the role of the third-party sender, its unique relationships with other Network participants and application to global transactions, appropriate due diligence processes for engaging a third-party sender, and sound business practices for risk management with third-party senders on the ACH Network.

Keywords: ACH Network; NACHA Operating Rules; third-party sender; risk management; originator; ODFI (search for similar items in EconPapers)
JEL-codes: E5 G2 (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:aza:jpss00:y:2012:v:5:i:4:p:338-346

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