GLOBAL PAYMENTS KNOWLEDGEISO 20022 / SWIFT / SEPA / MT / MX
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US ACH Network — direct deposit

A US dollar ACH credit for payroll: a batch instruction that clears through an ACH operator and settles on a deferred, netted basis before the wage lands in the employee's account.

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Contributor Shubham Mathure

STEP 1 / 7MESSAGE

Asha Traders submits the payroll file

Asha Traders (Originator) → Bank Alfa (ODFI) · ACH payroll file (PPD credit entries)

The employer instructs its bank to pay wages. It sends a payroll ACH file of credit entries to Bank Alfa, its Originating Depository Financial Institution (ODFI). This is an instruction, not money.

Step 1 of 7: Asha Traders submits the payroll file

  1. 01Message
    Asha Traders submits the payroll fileAsha Traders (Originator) → Bank Alfa (ODFI) · ACH payroll file (PPD credit entries)
  2. 02Processing
    Bank Alfa validates and batches the entriesBank Alfa (ODFI)
  3. 03Message
    Bank Alfa transmits the batch to an ACH OperatorBank Alfa (ODFI) → ACH Operator (Fed / TCH) · ACH batch transmission
  4. 04Clearing obligation
    The ACH Operator sorts and delivers entries to NordbankACH Operator (Fed / TCH) → Nordbank (RDFI)
  5. 05Settlement
    Interbank positions settle, netted, in central bank moneyBank Alfa (ODFI) → Nordbank (RDFI)
  6. 06Posting
    Bank Alfa debits Asha TradersBank Alfa (ODFI)
  7. 07Posting
    Nordbank credits RiyaNordbank (RDFI)
MESSAGECLEARING OBLIGATIONSETTLEMENTPOSTING
Full step-by-step text (works without JavaScript)
  1. 01Message
    Asha Traders submits the payroll fileAsha Traders (Originator) → Bank Alfa (ODFI) · ACH payroll file (PPD credit entries)

    The employer instructs its bank to pay wages. It sends a payroll ACH file of credit entries to Bank Alfa, its Originating Depository Financial Institution (ODFI). This is an instruction, not money.

  2. 02Processing
    Bank Alfa validates and batches the entriesBank Alfa (ODFI)

    The ODFI checks the file against Nacha technical standards (routing numbers, formats, totals), screens the entries, and batches them for a submission window. Nothing has moved between banks yet.

    Screening checkpoint: ODFI originator and entry screening — The originating bank screens the batch against sanctions lists before it goes into the ACH network.

  3. 03Message
    Bank Alfa transmits the batch to an ACH OperatorBank Alfa (ODFI) → ACH Operator (Fed / TCH) · ACH batch transmission

    The ODFI sends the batched file to one of the two ACH Operators — the Federal Reserve or The Clearing House. Nacha writes and enforces the rules, but the operator is the party that processes the entries.

  4. 04Clearing obligation
    The ACH Operator sorts and delivers entries to NordbankACH Operator (Fed / TCH) → Nordbank (RDFI)

    The operator sorts every entry by routing number and delivers each one to the receiving bank. Delivery makes the entry an obligation for the settlement window — it is not yet a movement of money.

    Delivered entries are obligations to be settled in this window. ACH is a batch system: entries are grouped and processed together, not one-by-one in real time.

  5. 05Settlement
    Interbank positions settle, netted, in central bank moneyBank Alfa (ODFI) → Nordbank (RDFI)

    The operator nets each bank's total credits and debits and settles the net positions across the banks' Federal Reserve accounts at the scheduled window. Only now does money actually move between Bank Alfa and Nordbank.

    • DR Bank Alfa settlement account at the Federal Reserve — USD 2,000.00
    • CR Nordbank settlement account at the Federal Reserve — USD 2,000.00
  6. 06Posting
    Bank Alfa debits Asha TradersBank Alfa (ODFI)

    The ODFI books the debit against the employer's account for the wages it originated. The employer's money has left its account to fund the payroll run.

    • DR Asha Traders' account at Bank Alfa — USD 2,000.00
  7. 07Posting
    Nordbank credits RiyaNordbank (RDFI)

    The Receiving Depository Financial Institution (RDFI) posts the credit to the employee's account. For an ACH credit, Nacha rules require the funds to be available by 9:00 AM local time on the settlement date.

    • CR Riya's account at Nordbank — USD 2,000.00

What this simplifies: One payroll entry through one ACH Operator in a single settlement window; real ACH batches many entries across multiple daily windows, with Same Day ACH offering faster but still batched, netted settlement.

LEARN THE CONCEPTS BEHIND THIS FLOW

Sources for this flow2
  1. Official requirement

    ACH Network and Nacha Operating Rules ↗ — Nacha

    Governs the US ACH Network: batch credit and debit transfers between an ODFI and an RDFI, cleared by the two ACH Operators (the Federal Reserve and The Clearing House) and settled on a deferred, netted basis. Same Day ACH runs defined intraday windows with a per-payment limit of USD 1,000,000 (effective 18 March 2022; scheduled to rise to USD 10,000,000 on 17 September 2027). · Checked 2026-07-14

    Nacha writes and enforces the Operating Rules but does not itself process ACH payments.

  2. Simplified educational illustration

    Payments Signal editorial teaching models — Payments Signal

    This site's own simplified teaching models. · Checked 2026-07-12

    What this simplifies: A single entry, a single ACH Operator, and one clearing and settlement window are shown. Real ACH files carry many entries across multiple daily windows; Same Day ACH adds faster windows (submission ~10:30 AM ET settling ~1:00 PM ET, and ~2:45 PM ET settling ~5:00 PM ET) with a per-payment limit of USD 1,000,000, but it is still a batch, deferred-net system.

    Used wherever diagrams, scenarios, figures, or example values are didactic constructions rather than sourced facts; every such use carries a simplifications disclosure. All people, companies, banks, and list entries in examples are fictional.