Accredited ACH Professional (AAP) Practice Exam

What method describes how ACH payment transactions are processed and transmitted?

1. Real-time processing

2. File-based processing

3. Batch process, store-and-forward system

4. Single-entry processing

The correct answer is: Batch process, store-and-forward system

The correct answer, the batch process, store-and-forward system, accurately describes how ACH payment transactions are processed and transmitted. In this method, ACH transactions are collected over a period of time and grouped into batches for processing. This helps optimize efficiency and reduce the load on processing systems, as multiple transactions can be handled simultaneously instead of one by one. Once the batches are created, they are transmitted to the Federal Reserve or another ACH operator, where the store-and-forward aspect comes into play. The transactions are held temporarily and then forwarded to the receiving financial institution for posting to customer accounts. This system is designed to effectively manage the volume of transactions typical in the ACH network, ensuring that payments are processed in a timely and organized manner. Real-time processing refers to transactions being processed immediately as they occur, which does not align with the batch-oriented nature of ACH. File-based processing might sound similar but does not encapsulate the bulk processing aspect specific to ACH transactions. Similarly, single-entry processing is limited to one transaction at a time and does not reflect the overall methodology of ACH, which is based on batch processing.