FedGlobal^® ACH Payments Frequently Asked Questions

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FedGlobal ACH Payments Frequently Asked Questions

1. Who can participate in FedGlobal ACH Payments?

   FedGlobal ACH Payments are open to all U.S. depository financial institutions (DFIs). DFIs interested in one or more services should contact their account executive who can lead them through the sign-up process.

2. Where are the foreign exchange rates and spreads located?

   FedGlobal ACH Payments offer competitive foreign exchange rates. The daily and historical data on country rates can be found on the FedGlobal Foreign Exchange rate page.

3. Are there a minimum number of transactions required to participate in FedGlobal ACH Payments?

   There is no minimum requirement of transactions to participate in the FedGlobal ACH Payments.

4. What is the deposit deadline and how are FedGlobal ACH Payments items to be handled?

   As with domestic transactions, the deposit deadline for FedGlobal ACH Payments items is 2:15 a.m. ET. Files are transmitted to the foreign gateway operators by 6:00 a.m. ET for further processing. Cross border entries can be contained in the same file as domestic ACH transactions, but must be batched separately.

5. Which NACHA standard entry class codes are used for FedGlobal ACH Payments items?

   International payments are formatted using the IAT (International ACH Transaction) Standard Entry Class (SEC) code. This SEC code and fields in the Company/Batch Header Record allow cross-border payments to be readily identified. The Company/Batch Header Record contains information specific to international payments, including data related to foreign exchange, origination and destination currencies, and destination country.

6. When does the foreign receiving financial institution receive settlement for the FedGlobal ACH Payments items from the gateway operator?

   • Canada Service:
     Fixed-to-Variable: On the U.S. settlement date
     Fixed-to-Fixed (USD): One day after U.S. settlement date for one-day items;
     on the U.S. settlement date for two-day items
   • Mexico Service:
     By 15:30 ET on the same day of the U.S. settlement date
   • Panama Service:
     One day after the U.S. settlement date
   • Europe Service:
     Fixed-to-Variable: One day after the U.S. settlement date
     Fixed-to-Fixed (USD): One day after U.S. settlement date
     Fixed-to-Fixed (local currency; F3X): On the U.S. settlement date
     

   
   
7. What paperwork does an institution need to complete to participate in FedGlobal ACH Payments?

   Prior to participation, a DFI should complete and return the Service Request Form (PDF) to the account executive. The form is available in the Part 6A of the FedACH Participation Agreement.

8. How does customer service work? Does the DFI need to contact the foreign gateway operator?

   Inquiries should be directed to Federal Reserve Bank staff that either answer the inquiry or contact the gateway operator on an institution's behalf. Institutions do not need to contact the foreign gateway operator. Once the gateway operator responds to the request, the Federal Reserve Banks contact the institution to provide the response.

   FedGlobal ACH customers can reach FedACH Customer Support at P: (877) 372-2457 or FedACHChecksCS@atl.frb.org.

9. Do the Federal Reserve Banks have standard Service Level Agreements for customer service with all gateway operators?

   Yes, the Federal Reserve Banks have executed standard service agreements with all gateway operators.

10. Do Office of Foreign Assets Control (OFAC) Rules apply to FedGlobal ACH Payments transactions?

    OFAC rules apply to all payments. DFIs and their customers should consult with their internal compliance officer on this issue. Further information can also be found on the OFAC web-site (Off-site).

11. What types of risk are associated with FedGlobal ACH Payments transactions?

    Federal Reserve Operating Circular 4 and the NACHA Operating Rules stipulate the rights, obligation and warranties with respect to the U.S. payments system. Differences in the U.S. and foreign systems may pose operational risk to an originating depository financial institution (ODFI). It is important that ODFIs understand the specific risks and requirements involved in originating international payments and should consult with risk management and legal staff before originating such payments. Credit risk also exists with respect to return items, including but not limited to return time frames, which may be extended due to differences in country return requirements. The originator will absorb extended temporal foreign exchange (FX) rate exposure and extended temporal credit risk. Originators should also note that the FX spread will be applied on both the originated item and the return.

12. Why is the Federal Reserve supporting FedGlobal ACH Payments?

    FedGlobal ACH Payments support the Federal Reserve System's strategic direction to improve the payments system and promote electronic payment services as an alternative to paper-based products. The services are intended to encourage the use of the ACH system for international payments by accelerating the clearing time and reducing the cost associated with these payments.

13. Where can an institution get information about the foreign bank numbers and foreign account numbers?

    Account number information for each service is outlined in the respective sections of the FedGlobal Service Origination Manual (PDF).

14. What is the difference between Directo a México and FedGlobal Mexico Service?

    Directo a México is the promotional name for the FedGlobal Mexico Service that DFIs can use to better communicate and promote FedACH payments to Mexico. A promotional kit is provided to all institutions that enroll in the service.

15. What is the difference between Canada Connection^® and the FedGlobal Canada Service?

    Canada Connection is the promotional name for the FedGlobal Canada Service that DFIs can use to better communicate and promote FedACH payments to Canada. A promotional kit is provided to all institutions that enroll in the service.

16. Should a DFI test with the Federal Reserve Banks?

    ODFIs are encouraged to test their ability to successfully send international transactions and are encouraged to test receiving returns. To schedule a test, institutions should complete and submit the FedACH Services Test Request Form (Off-site).

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