# Overview

## What is ACH?

ACH (Automated Clearing House) is a batch-based electronic funds transfer system used in the United States. It facilitates transactions between financial institutions, including direct deposits, bill payments, and business-to-business payments.

### Key Participants

- **ODFI (Originating Depository Financial Institution):** The bank initiating the ACH transaction.
- **RDFI (Receiving Depository Financial Institution):** The bank receiving the ACH transaction.
- **Originator:** The entity initiating the payment.
- **Receiver:** The entity receiving the payment.

### Settlement vs. Funds Availability

- **Settlement:** The process of transferring funds between financial institutions.
- **Funds Availability:** The process of making funds accessible to the receiver.

### Why Sequencing Matters

Proper sequencing ensures:

- Accurate settlement
- Compliance with NACHA rules
- Prevention of errors and fraud