What document allows the Originator to convert a Receiver's source document into an ACH debit?

What document allows the Originator to convert a Receiver's source document into an ACH debit?

• A. Pre-printed Check Serial Number
• B. Electronic Funds Transfer Agreement
• C. Bank Account Verification Form
• D. ACH Authorization Notice

Answer: (A)

The correct answer is the ACH Authorization Notice. This document is essential in the ACH process because it provides explicit consent from the Receiver (the account holder) to the Originator (the entity initiating the transaction) to debit their account. The ACH Authorization Notice details the terms of the transaction and ensures that the Receiver is aware of and agrees to the transfer of funds. In the context of converting a source document into an ACH debit, this authorization is necessary to comply with the National Automated Clearing House Association (NACHA) rules. Without such authorization, the Originator does not have the legal right to initiate a debit to the Receiver's account, which could lead to disputes or compliance issues. The other options do not serve this specific purpose. Pre-printed Check Serial Numbers simply identify checks and do not provide authorization for ACH transactions. An Electronic Funds Transfer Agreement outlines the rights and responsibilities related to electronic transactions but does not specifically address the consent needed for debiting an account. A Bank Account Verification Form is typically used to confirm account details but does not serve to authorize ACH debits.

The correct answer is the ACH Authorization Notice. This document is essential in the ACH process because it provides explicit consent from the Receiver (the account holder) to the Originator (the entity initiating the transaction) to debit their account. The ACH Authorization Notice details the terms of the transaction and ensures that the Receiver is aware of and agrees to the transfer of funds.

In the context of converting a source document into an ACH debit, this authorization is necessary to comply with the National Automated Clearing House Association (NACHA) rules. Without such authorization, the Originator does not have the legal right to initiate a debit to the Receiver's account, which could lead to disputes or compliance issues.

The other options do not serve this specific purpose. Pre-printed Check Serial Numbers simply identify checks and do not provide authorization for ACH transactions. An Electronic Funds Transfer Agreement outlines the rights and responsibilities related to electronic transactions but does not specifically address the consent needed for debiting an account. A Bank Account Verification Form is typically used to confirm account details but does not serve to authorize ACH debits.