What Your Business Needs to Do
Nacha has introduced new requirements that will affect how ACH Originators process transactions in early 2026. These changes are intended to reduce fraud, improve transaction transparency, and support safer electronic payments. United Community is here to help you prepare.
Rule 1: Fraud Monitoring by Originators
What’s Changing
All non‑consumer ACH originators must have risk‑based procedures designed to detect and prevent fraudulent ACH activity. These procedures must be:
- Implemented in your ACH processes
- Reviewed at least once per year
- Updated as fraud threats evolve
Organizations that do not currently use fraud‑monitoring tools may need to implement new systems or processes. Contact our Treasury Management support team for assistance. Call 1-866-270-6100 or email t[email protected].
Fraud Monitoring Scope and Effective Date
- June 19, 2026:
Applies to all non‑consumer ACH Originators.
How to Prepare to Take Action
- Implement fraud detection processes if your business does not already use them.
- Review available fraud‑prevention resources, including United Community’s webinar on Preventing Business Email Compromise (BEC). Access the recorded session here.
Rule 2: New Standard Company Entry Descriptions
What’s Changing
Nacha is introducing two mandatory Company Entry Descriptions:
“PAYROLL”
Must be used for ACH credits using the PPD Standard Entry Class Code that represent compensation (wages, salary, bonuses, etc.). This update helps institutions better identify payroll-related fraud attempts.
“PURCHASE”
Required for consumer‑authorized e‑commerce WEB debit entries for online purchases of goods when utilizing the WEB SEC Code. If you are processing transactions using only PPD, CCD, or CTX, this update does not apply to you.
Effective Date
These descriptions may be used immediately but must be implemented no later than March 20, 2026.
How to Prepare to Take Action
- Update payroll files to include the Company Entry Description PAYROLL.
- Update applicable consumer‑authorized e‑commerce WEB debit entries for online purchases of goods to include the Company Entry Description PURCHASE.
We’re Here to Help
If you have questions or would like assistance preparing for these upcoming requirements, contact our Treasury Management support team by calling 1-866-270-6100 or emailing t[email protected].
Frequently Asked Questions
- Direct deposits
- Bill payments
- Vendor payments
- B2B electronic transfers
- Creating and enforcing the ACH Operating Rules
- Setting standards for originating, processing, and receiving ACH payments
- Implementing updates such as the 2026 fraud monitoring requirements
- Fraud Monitoring by Originators
- Standard Company Entry Descriptions – PAYROLL and PURCHASE
Absolutely. Our team is ready to support you in meeting these requirements and ensuring a seamless transition.
View the Digital Demo for sending an ACH Payment.
Contact our Treasury Management support team by calling 1-866-270-6100 or emailing[email protected].
The Nacha update specifically requires documented fraud prevention policies and procedures related to ACH transactions.
- Applies to entities that originated more than 6 million ACH entries in 2023.
- Applies to all remaining non consumer Originators.
- Evaluate and implement fraud-monitoring tools or processes.
- Conduct annual reviews of fraud related procedures.
- Review educational materials, such as United Community’s Preventing Business Email Compromise (BEC) webinar.
It appears on the receiver’s bank statement and helps them understand why the transaction occurred.
PAYROLL
Required for PPD credits used for:
- Wages
- Salaries
- Bonuses
- Commissions or similar compensation
Required for consumer‑authorized e‑commerce debit entries for online purchases of goods when utilizing the WEB SEC Code. If you are processing transactions using only PPD, CCD, or CTX, this update does not apply to you.
To update the Company Entry Description to reflect PAYROLL, follow the formatting instructions in the United ACH Guide.
The update is made in the Batch Header Record (5 Record).
- Instructions begin on page 15
- A completed example appears on page 16
View the Payment from File Demo here.
New/Existing ACH Templates:
For templates used for compensation (e.g., payroll, bonuses, or any payroll related item):
- Add or update the Company Entry Description to show PAYROLL
- Apply this update each time you create or modify an ACH template
View ACH Template Demo here.
New ACH Batch or Payment:
If you submit payroll using ACH Batch or ACH Payment, include PAYROLL in the Company Entry Description with every payroll submission.
A demo link is available for guidance: View ACH Batch/Payment Demo.
These providers automatically adjust their formatting to meet new Nacha regulations.
- PAYROLL: Helps financial institutions more easily identify payroll payments and reduce payroll redirection fraud.
- PURCHASE: Helps distinguish e-commerce transactions within ACH activity.
- Update payroll systems so ACH files reflect PAYROLL as the Company Entry Description.
- Update e-commerce systems so applicable transactions use PURCHASE.
- Article Two, Subsection 2.2.4 – Fraud Monitoring
- Appendix One, Part 1.2 – Standard Company Entry Descriptions
