Accredited ACH Professional (AAP) Practice Exam

Who is the individual or company that authorizes an originator to initiate an ACH entry?

1. Originator

2. Payee

3. Receiver

4. Cardholder

The correct answer is: Receiver

The entity that authorizes an originator to initiate an ACH entry is referred to as the Receiver. In the context of ACH transactions, the Receiver is the person or organization that will ultimately receive the funds. They provide consent for the originator to initiate a debit or credit transaction on their behalf, typically through a written authorization. This consent is crucial because it ensures that the transaction is legitimate and that the Receiver is aware of and agrees to the processing of their account. In contrast, the Originator is the one who initiates the ACH entry but does so with the approval of the Receiver. The Payee typically refers to the party that is to receive payment, which is often the same as the Receiver in many contexts. The Cardholder is more relevant in debit or credit card transactions rather than ACH transactions. Thus, the Receiver is the right choice, as they are the key authorizer in the initiation of ACH entries.