Understanding ACH Participants
straddle
An ACH transaction involves several participants working together to move funds. In Straddle, you work with two of them.
The two roles you work with
Accounts send payments. They are the Originator in ACH terms, and usually that is you.
Customers receive funds or get charged. They are the Receiver in ACH terms.
Straddle and its bank handle every other participant on your behalf.
How ACH roles map to Straddle
| ACH participant | Straddle role | What it means for you |
|---|---|---|
| Originator | Account | The business or person sending the payment |
| Receiver | Customer | The person or business receiving the funds or being billed |
| ODFI (originating bank) | ACH Facilitating Bank | Facilitates ACH file origination on behalf of the Account |
| RDFI (receiving bank) | ACH Facilitating Bank | Handles final posting of transactions for the Customer |
| ACH Operator | Network Entity | Central clearing facility for transaction flow |
| Third-Party Sender | Third-Party Sender | Entity transmitting files without a direct Originator-to-ODFI agreement |
The Originator, which Straddle calls an Account
- What it is
- The business, company, or individual who starts an ACH transaction.
- Example
- A company paying employees by direct deposit, or billing a customer for goods or services.
- In Straddle
- The Originator is called an Account. The Account represents whoever is initiating the ACH payment or charge.
The Receiver, which Straddle calls a Customer
- What it is
- The person or company who gets the funds for credits, or approves a withdrawal for debits.
- Example
- An employee receiving their paycheck, or a business receiving payment.
- In Straddle
- The Receiver maps to a Customer. The Customer is the one receiving funds or being charged, depending on the transaction type.
The ODFI, or originating bank
- What it is
- The bank that sends ACH entries into the network on the Originator's behalf.
- Example
- The bank that transmits a payroll file into the ACH Network.
- In Straddle
- Straddle's bank acts as the ODFI, handling the technical side of sending ACH files into the network. Your business does not need its own ODFI relationship.
The RDFI, or receiving bank
- What it is
- The bank where the Receiver holds their account. This bank processes incoming ACH transactions.
- Example
- The employee's bank receiving their paycheck.
- In Straddle
- The RDFI supports the Customer by posting the funds or withdrawals to their account.
The ACH Operator
- What it is
- The intermediary that sorts and delivers ACH files between banks.
- Example
- The central clearinghouse that ensures ACH transactions get where they need to go.
- In Straddle
- This role operates behind the scenes and requires no direct action from Accounts or Customers.
The Third-Party Sender
- What it is
- A third-party company that sends ACH transactions on behalf of an Originator but without a direct agreement with the bank.
- Example
- A payroll processor managing ACH files for businesses.
- In Straddle
- Straddle is the Third-Party Sender, and processes ACH entries on behalf of Accounts.
What this means for you
Straddle reduces the ACH participant model to two roles you interact with:
- Accounts are those who send payments, known as Originators in ACH terms.
- Customers are those who receive payments, known as Receivers in ACH terms.
Whether you are managing payroll, billing customers, or receiving funds, those two roles are the only ones you work with directly.