Greater Milwaukee Chapter of the APA Presented by WACHA The Premier Payments Resource Luann S. Kohlmann, AAP, NCP Vice President 262-345-1245 or 800-453-1843 www.wacha.org info@wacha.org 2012

Disclaimer This material is not intended to provide any warranties or legal advice, and is intended for educational purposes only NACHA owns the copyright for the NACHA Operating Rules & Guidelines The Accredited ACH Professional (AAP) is a registered service mark of NACHA © 2012 WACHA All rights reserved This material is derived from collaborative work product developed by NACHA ─ The Electronic Payments Association and its member Regional Payments Associations

WACHA The Premier Payments Resource Wisconsin Automated Clearing House Association Not for Profit Trade Association Membership Driven (FIs and Corporations) Specialize in training and education for electronic payments 17 similar associations in US Help Desk New Compliance arm called Payments Advisory Resource (PAR) Covers Audit and Compliance For membership info contact us at info@wacha.org or go to our website.

Level Setting How many of you use Direct Deposit? Do you mandate Direct Deposit? How many of you use ACH for Payroll Taxes? How many companies use Direct Payment for bill payments? Promote 1-2 times per year. Promote financial goals by putting $$ into savings Save over 3 days per years by not going to the bank

Direct Deposit SIMPLE SAFE SMART Direct Deposit can simplify the labor and time processes involved in payroll processing because it requires less manual handling such as the account reconciliation process Direct Deposit uses the ACH Network, a safe and secure payment network used by banks, credit unions, and the U.S. government to send and receive payments each day, so payments are never lost or stolen Less likelihood of fraud, because there is less potential for counterfeit or stolen checks, altered amounts, and forged signatures The potential for error is reduced because Direct Deposit requires less manual handling than a check. Problems with Direct Deposit are rare. If there is a problem, the dispute resolution process is simple and straightforward. The transaction has an electronic trace from start to finish. Employees spend between 8.5 and 24 hours per year going to the bank or credit union to cash or deposit their paychecks, an activity which accounts for an estimated $3-$5 billion loss in productivity annually. Smart way to help the environment. Each year, checks use more than 674 million gallons of fuel and add 3.6 million tons of CO2 to the environment as they travel through the payment cycle. Reduces the reliance on paper checks and administrative costs associated with producing payroll checks-less check stock to buy and store, less wear-and-tear on printers, fewer envelopes, etc.

Direct Deposit Savings Calculator http://www.electronicpayments.org/c/bus_ddep_calculator.cfm?hp=bus Typically, it costs more to process a paper check than a Direct Deposit transaction. Usually between $2.87-$3.15 per payments Find out how much you could save using the Direct Deposit Calculator

Authorizations Give a copy Reversal clause DFI request for proof Retention 2 years after final payroll settlement date

Reversals In case of error a “Reversal” file or entry can be sent Reversal is not guaranteed! NACHA is working on an initiative to tie the reversal to the original entry

IAT International ACH Transactions Transaction Type codes-Reason for the payment ANN (Annuity) DEP (Deposit) LOA (Loan) MIS (Misc) MOR (Mortgage) PEN (Pension) REM (Remittance) RLS (Rent Lease) SAL (Salary) TAX (Tax)

IAT International ACH Transactions Authorization and entry needs many more details Foreign Payment Amt /Receiver’s Name Originator’s Name /Street/ City / State/ Country/ Postal Code ODFI Name / ID/ Branch Country Code RDFI Name / ID / Branch Country Code Receiver’s ID Number / Street /City / State / Country/ Postal Code OFAC Compliance

Payroll cards How many of you use payroll cards? You can use Direct Deposit to fund payroll cards Used for employees without bank accounts

Availability Payroll needs to be available by 9am Consumer credits available to the RDFI by 5pm the day before Settlement Date must be available for cash withdrawal by opening of business on settlement date Effective Date vs Settlement Date The opening of business is the later of 9:00 am local time or when teller facilities (including ATMs) are available for customer account withdrawals Not midnight…

Corporate Account Takeover How do you get you payroll files to your financial institution? Security agreements between you and your FI? Security in your office? Security with your service providers?

Retirees Social Security Direct Deposit mandate Pensions Reclamations

Expedited Processing & Settlement (EPS) NACHA Rules initiative to enable a premium ACH processing and settlement window Faster and more flexible settlement ACH Network-wide solution All endpoints participating Same-day processing and settlement, not “real-time” Vision in Current Rules Proposal Consumer & commercial ACH debit, credit, reversing, and return entries Originated, processed, settled and made available same-day Addition of an afternoon window, with participation from both ACH Operators, for EPS premium clearing Could extend the submission window

Resources WACHA- The Premier Payments Resource PAR- Payment Advisory Resource HELP DESK Phone: 262-345-1245 Toll Free: 800-453-1843 Fax: 262-345-1246 info@wacha.org info@paymentadvisoryresource.com