Question

Once an EE has given authorization for EFT and the ER creates electronic pay transactions for deposit, where does the ER send them?

A. ACH
B. RDFI
C. ODFI
D. NACHA

Answer 1

The employer sends the electronic pay transactions authorized by the employee for Electronic Funds Transfer to the Automated Clearing House (ACH), which is processed through banks participating as ODFI and RDFI.

Step-by-step explanation:

Once an employee (EE) has given authorization for Electronic Funds Transfer (EFT), the employer (ER) sends the electronic pay transactions for deposit to the Automated Clearing House (ACH). The ACH is the network that processes electronic financial transactions in the US, including direct deposits of paychecks.

This system is managed by the National Automated Clearing House Association (NACHA), although the actual transfers are made through an Originating Depository Financial Institution (ODFI) and received by a Receiving Depository Financial Institution (RDFI).

These institutions are banks that participate in the ACH network, with the ODFI sending the transaction information and the RDFI receiving it for the account of the EE.