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>At Gusto, we rely heavily on the ACH network. For example, when a company runs payroll, we’ll use the ACH network to debit the company’s account to fund their
by TACIXAT 9y ago
>At Gusto, we rely heavily on the ACH network. For example, when a company runs payroll, we’ll use the ACH network to debit the company’s account to fund their employee’s pay. Once we’ve received these funds from the company, we’ll again use the ACH network to initiate credits into each of the employee’s accounts to pay them for their hard work.
Can you use ACH to initiate a transfer between two (third) parties (i.e. you not being one of them)? If not, what are the requirements to be a broker / escrow in between them?
- mjcl 9y ago> Can you use ACH to initiate a transfer between two (third) parties (i.e. you not being one of them)? No, the closest you could come is what you quoted. You could issue the debit & credit actions together, but you'd be taking on the risk that the debit fails and the credit succeeds, leaving you short. > If not, what are the requirements to be a broker / escrow in between them? The Federal Reserve is the entity that is between all inter-bank ACH transactions. Essentially US banks hold an account with the Federal Reserve. When they send ACH payments for their customers, their Fed account is debited (and the other bank is credited). When they receive ACH payments for their customers, their Fed account is credited (and the other bank is debited).