Nacha

What Your Business Needs to Do

Nacha has introduced new requirements that will affect how ACH Originators process transactions in early 2026. These changes are intended to reduce fraud, improve transaction transparency, and support safer electronic payments. United Community is here to help you prepare.

Rule 1: Fraud Monitoring by Originators

What's Changing:

  • All non-consumer ACH originators must implement risk-based fraud detection procedures.
    • Implemented in your ACH processes
    • Reviewed at least once per year
    • Updated as fraud threats evolve
  • Organizations that do not currently use fraud-monitoring tools may need to implement new systems or processes. Please contact our Treasury Management department for more information.

Fraud Monitoring Scope and Effective Date

  • June 19, 2026 – Applied to all non-consumer ACH Originators

How to Prepare:

  • Implement fraud detection processes.
  • Review fraud prevention resources and training provided by N

Rule 2: New Standard Company Entry Descriptions

What’s Changing

  • Nacha is introducing two mandatory Company Entry Descriptions:
    • PAYROLL
      • Must be used for ACH credits using the PPD Standard Entry Class Code that represents compensation (wages, salary, bonuses, etc.). This update helps institutions better identify payroll-related fraud attempts.
    • PURCHASE
      • Required for consumer‑authorized e‑commerce WEB debit entries for online purchases of goods when utilizing the WEB SEC Code. If you are processing transactions using only PPD, CCD, or CTX, this update does not apply to you.
  • Effective Date:
    • Required by March 20, 2026.
  • How to Prepare:
    • Update payroll files to use PAYROLL.
    • Update applicable consumer-authorized e-commerce WEB debit entries for online purchases of goods to included the Company Entry Description PURCHASE.

We are here to help

If you have questions or would like assistance preparing for these upcoming requirements, contact our Treasury Management department by emailing XXXX.

Frequently Asked Questions (Condensed)

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What is Nacha?

Nacha (formerly the National Automated Clearing House Association) is the rule making body that oversees the ACH Network—the electronic payment system used for:

  • Direct deposits
  • Bill payments
  • Vendor payments
  • B2B electronic transfers

Nacha is responsible for:

  • Creating and enforcing the ACH Operating Rules
  • Setting standards for originating, processing, and receiving ACH payments
  • Implementing updates such as the 2026 fraud monitoring requirements

What changes are coming?

Nacha has announced two key amendments effective in 2026 that impact ACH Originators:

  • Fraud Monitoring by Originators
  • Standard Company Entry Descriptions – PAYROLL and PURCHASE

Both require businesses to update processes or systems by March 20, 2026, with additional fraud monitoring requirements applying on June 19, 2026 for some organizations.

What is the new Fraud Monitoring requirement?

All non consumer ACH Originators must implement risk-based fraud detection procedures designed to identify potentially unauthorized or fraudulent ACH entries. These procedures must be reviewed and updated annually.

Does Positive Pay satisfy the Nacha Fraud Procedure Requirement?

No. Although Positive Pay is an effective fraud prevention tool, it does not meet the Nacha rule requirement. The Nacha update specifically requires documented fraud prevention policies and procedures related to ACH transactions.

Why is Nacha implementing this change?

The purpose is to reduce fraud attempts and improve early detection of suspicious activity across the ACH Network.

Who must comply?

Non-consumer Originators, Third-Party Service Providers, and Third-Party Senders.

What should businesses do?

Review processes, update systems, and implement fraud monitoring.

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