Online ACH Origination

Transmissions Lessons Online ACH Origination

This document provides technical guidance for credit unions utilizing the FLEX system’s Online ACH Origination module. This feature empowers members to initiate their own ACH transfers directly through online banking.

1. Prerequisites

To enable Online ACH Origination for your members, your credit union must have:

  • The ACH Origination module purchased and integrated with your FLEX system.
  • Internet Banking services enabled.

For assistance with setup, please contact the FLEX Training Department.

2. Member Access and Navigation

Members will access the Online ACH Origination functionality via their online banking portal.

2.1. Access Steps

  1. Login: Members must first log in to their account through the internet banking portal.
  2. Navigate to Accounts Menu: Once logged in, members will click on the “Accounts” menu located at the top of the online banking screen.
  3. Select ACH Origination: From the “Accounts” menu, members will select the option for “ACH Origination”.
    • Note: The menu name for “ACH Origination” can be customized by the credit union if desired.

3. Linking an External Account

Before members can initiate transfers, they must link their external accounts.

3.1. Required Information for Linking

Members will be prompted to enter the following details for the external account:

  • Routing Number: This field is subject to real-time validation during the setup process.
  • Account Number: The external account number.
  • Description: A user-defined description for the external account.

3.2. Important Considerations

  • Primary Account Holder: This option is specifically designed for setting up external accounts that belong to the primary account holder of the FLEX system account. It is not intended for linking accounts owned by other individuals.

4. External Account Verification Process

To ensure the security and accuracy of external account linkages, a verification process is implemented.

4.1. Initial Records Creation

When a member initiates the linking of an external account, the FLEX system automatically generates four records within the credit union’s ACH Origination Processing:

  • Two Credit Records: These records contain random deposit amounts, each under $1.00. These are sent to the external financial institution for the member to verify.
  • Two Debit Records: These records are processed one business day after the credit records.

4.2. Verification Status and Timeline

  • Pending Status: The member’s external account will display a “Pending” status for approximately two business days. This duration allows for the deposits to be made into the external account.
  • Verification Requirement: Members will not be able to verify the account until these small deposits have cleared at their external financial institution.
  • Post-Deposit Status: Once the deposits have been successfully made and cleared, the external account’s status will change from “Pending,” allowing the member to proceed with the verification.

4.3. Completing Verification

  • Members will need to enter the exact amounts of the two small deposits received in their external account on the “External Account” page within the online banking portal.

5. Initiating a New Transfer

After successful verification, members can proceed to create new transfers.

5.1. Transfer Creation Process

  • Members will be guided through a transfer interface where they can specify:
    • From Account: The internal account from which funds will be transferred.
    • To Account: The verified external account.
    • Amount: The desired transfer amount.
    • Frequency: The recurrence of the transfer (e.g., one-time, recurring).
    • Next Run Date: For recurring transfers, the date of the next scheduled transfer.

5.2. Transfer Record Management

  • Multiple Records: Members can create multiple transfer records as needed.
  • One-Time Verification: The initial verification process for an external account does not need to be repeated for subsequent transfers to or from that same linked account.
  • Editing and Cancellation: Members retain the ability to edit or cancel existing transfer records.

6. ACH Processing Workflow

Once a member creates an external transfer, it integrates seamlessly into the credit union’s existing ACH Origination processing.

6.1. Inclusion in Transmission File

  • The newly created external transfer will appear in the credit union’s ACH Origination processing queue.
  • It will be included in the transmission file based on its specified frequency (e.g., daily, weekly).

6.2. Consolidated Processing

  • These member-generated ACH files are processed concurrently with the credit union’s other internally generated ACH Originations.
  • There is no requirement to run these files separately or twice. The system handles their inclusion automatically.