What Are ACH Company ID Listings Used For?

Listings of ACH company IDs have several purposes, but the most common is as a white list of authorized company IDs that are permitted to debit the account for which the list was provided. ACH company IDs are used for identifying entities that initiate ACH Debits.

An ACH, or Automated Clearing House, system is an electronic inter-bank network set up to allow for payment processing. The ACH system is administered by the United States Federal Reserve and the National Automated Clearing House Association. The ACH provides an electronic network through which banks can send money to each other.

The NACHA defines the protocols for how accounts at different banks can be addressed and how debits should be formatted, communicated, transmitted and processed. An ACH debit consists of a list of information, including the requesting account number, institution, name of the account holder and the sending account information. Among this list of information is the company ID. The company ID is a unique identifier issued to each depository institution so that it may be addressed on the network. Functionally, the Company ID is like a mailing address; it allows the ACH debit to be routed directly to the right location so that it may be delivered to the correct account holder.