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How Direcy Payment Works

1. Sign Up

Your individual customers authorize the companies that send them bills to debit recurring payments through Direct Payment, providing their routing and account numbers. Download sample authorization forms »

How it works from the consumer perspective

2. Test

Your business customers may send your institution a pre-notification test through the ACH Network to verify the accuracy of individuals' account information. If any specific individual's account information cannot be posted, or changes need to be made to the account information, you alert your business customer.

3. Notify

If the amount of the recurring payment varies, your business clients will send their customers notification of the payment amount at least 10 days prior to the payment transaction, or receive permission from their customers to waive their rights to notification. Similarly, if the date of the debit varies or is not specified in the authorization, business clients must notify their customers at least 7 days prior to the debit date.

4. Post

Your business customers transmit an ACH file to your institution for live processing, providing that six banking days have passed between the pre-notification entry and the first live entry.

5. Process

Your financial institution processes the ACH file, extracting any transactions for individual accounts at your institution, and delivering the remaining transactions for distribution through the ACH Network. This occurs one or two days prior to the Direct Payment date.

6. Transact

On the Direct Payment date, you credit your business customers' accounts for the total amount of the Direct Payment transactions that were on the ACH file. If your financial institution is receiving Direct Payment transactions, you debit specific individual accounts and report the transaction on the customer's monthly account statement.

7. Confirm

The account statements you provide to your customers will list details of the ACH transactions, including the date and amount of debit or credit.

Did You Know

The volume of electronic payments processed through the ACH network has more than doubled in the last 10 years, as consumers and businesses become familiar with the convenience and cost savings associated with Direct Payment.

What People are Saying

"With Direct Payment, you know in advance which days each month your accounts will be debited. With payments mailed by check, there's some uncertainty. Your monthly bank statement will note the date and amount of each automated transaction. In the case of varying payments like a monthly utility bill, you can expect to receive a statement 10 days before the transaction date, providing time to question a charge.

Federal law prohibits unauthorized debits, including premature ones. Besides, automatic processing eliminates the risk of payments or deposits getting stolen in the mail."

- Russ Wiles,
The Arizona Republic