Nacha Rule Changes

Any ACH payment used to pay wages, salaries or similar compensation must now include the word "PAYROLL" in the Company Entry Description field.

• If you use ACH for payroll, you may need to update your ACH file setup, payroll software or Bank template

• "PAYROLL" must:

  • Appear at the start of the description

  • Be left-justified

  • May include up to three added characters after it (example: PAYROLL 426)

If your payroll entries currently use descriptions such as "ACH," Direct Deposit," "Weekly Pay," "Commission," or "ACH Batch," they must be changed to include "PAYROLL" before March 20, 2026.

Please note: Using the word "Payroll" does not confirm or guarantee employment status. It is strictly a standardized description requirement.

Businesses that sell goods or merchandise online or via text (typically using ACH WEB entries) must now include the word "PURCHASE" in the Company Entry Description.

This requirement applies only if your business:

• Sells goods or merchandise online or through text-based payments

• Uses ACH to collect those payments

It does not apply to:

• Utility payments

• Rent payments

• Services paid online that are not merchandise-based

If you're unsure whether this applies to your business, your Cape Cod 5 team can help you determine next steps.

Your business must:

• Have risk-based processes designed to detect:

  • Unauthorized ACH transactions

  • Transactions authorized under false pretenses (such as email or payment scams)

• Review and update these procedures at least once per year. Your annual review should be documented and dated to demonstrate compliance.

• Keep procedures in writing

These procedures may be reviewed by Cape Cod 5 as part of our responsibility as your ACH provider.

For many businesses, this documentation already exists as part of:

• Internal controls

• Accounting procedures

• IT or payment approval workflows

In many cases, it simply needs to be formalized or labeled to include ACH activity.

Failure to comply with these Nacha requirements could result in:

• Delays in ACH processing

• Requests for additional documentation

• Possible restrictions on ACH origination services

Our goal is to work with you well in advance to avoid any disruption.

We recommend that ACH users:

• Review your current ACH descriptions for payroll and online payments

• Talk with your payroll provider or software vendor about required updates

• Confirm whether your business sells goods online using ACH

• Ensure you have written fraud monitoring procedures in place

• Contact Cape Cod 5 with any questions or for guidance