NACHA Rule changes to prepare for in 2026

Effective March 20, 2026, NACHA will implement two rule amendments as part of a broader risk management initiative to reduce fraud and enhance fund recovery within the ACH Network.

1. Fraud Monitoring (Phase 1)

This amendment requires certain participants in the ACH Network to establish and implement risk-based processes and procedures to identify fraudulent ACH entries:

• Originating Depository Financial Institutions (ODFIs), along with non-consumer originators, third-party service providers, and third-party senders with annual ACH origination volumes of 6 million entries or more in 2023, must implement processes reasonably designed to detect fraudulent entries.

• Receiving Depository Financial Institutions (RDFIs) with annual ACH receipt volumes of 10 million entries or more in 2023 are required to develop procedures aimed at identifying potentially fraudulent credit entries.

These measures are intended to proactively detect and prevent fraudulent transactions within the ACH Network.

2. Standardization of Company Entry Descriptions

To enhance transparency and risk management, this rule introduces standardized Company Entry Descriptions for specific transaction types:

• PAYROLL: Originators must use the description “PAYROLL” for PPD credit entries related to wages, salaries, and similar compensation. This standardization assists RDFIs in monitoring incoming ACH credits, identifying new or multiple payroll payments to an account, and supporting decisions regarding funds availability.

• PURCHASE: The description “PURCHASE” is designated for e-commerce debit entries authorized by consumers for online goods purchases, including recurring transactions initially authorized online. This standardization aids in the identification and monitoring of e-commerce transactions.

By standardizing these descriptions, ACH Network participants can better identify, monitor, and manage risks associated with specific payment purposes.

Both amendments underscore Nacha’s commitment to strengthening the integrity of the ACH Network by reducing fraud and improving mechanisms for fund recovery when fraud occurs.

For more information, check out: Nacha - Risk Management Topics.