Accredited ACH Professional (AAP) Practice Exam

Who is responsible for obtaining authorization for ACH entries?

1. Receiver

2. Originator

3. RDFI

4. ODFI

The correct answer is: Originator

The responsibility for obtaining authorization for ACH entries lies with the originator. The originator is the entity that initiates the ACH transaction, whether it be a business or an individual, and is required to ensure that proper authorization is obtained from the receiver, who is the account holder that will receive the payment or transaction. This authorization is crucial for compliance with the NACHA Operating Rules, which govern ACH transactions. It serves as proof that the receiver has agreed to the transaction, protecting both parties legally and ensuring that consumers' rights are respected. While the receiver may have a role in the process by providing their account information and permissions, it is ultimately the originator's obligation to secure that authorization before any ACH entry is initiated. The RDFI (Receiving Depository Financial Institution) and ODFI (Originating Depository Financial Institution) are involved in processing the transactions but do not have the responsibility for obtaining the necessary authorization.