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Q: - Web Development - Banking ( Answered 5 out of 5 stars,   0 Comments )
Subject: - Web Development - Banking
Category: Computers > Internet
Asked by: speedymediagroup-ga
List Price: $100.00
Posted: 03 Nov 2006 05:56 PST
Expires: 03 Dec 2006 05:56 PST
Question ID: 779728
How does work?  Not like the terms, but how does Paypal
direct deposit money to thousands of accounts? is a
payment gateway but they can only deposit money into one account.   I
have searched for a payment solution that would allow me to take money
from people and deposit it into one of my hundreds of assigned
accounts.  Like I would need to assign new accounts via the
web as well.  Can someone point me in the right direction?
Subject: Re: - Web Development - Banking
Answered By: keystroke-ga on 03 Nov 2006 10:11 PST
Rated:5 out of 5 stars
Hello speedymediagroup,

Thank you for your question.

PayPal uses the Automated Clearing House (ACH) in order to make deposits.  

You can see this in their user agreement.

User Agreement for Paypal Service

"6.4 Electronic Transfers. When you make a payment through PayPal that
is funded with Instant Transfer or eCheck, and when you initiate an
"Add Funds" transaction you are requesting an electronic transfer from
your bank account. Upon such request, PayPal will make electronic
transfers via the Automated Clearing House (ACH) system from your U.S.
bank account in the amount you specify. You agree that such requests
constitute your authorization for such transfers. PayPal will never
make transfers from your bank account without your authorization."

ACH is governed by NACHA, the Electronic Payments Association. 


"NACHA is a not-for-profit association that represents more than
11,000 financial institutions through direct memberships and a network
of regional payments associations, and 650 organizations through its
industry councils. NACHA develops operating rules and business
practices for the Automated Clearing House (ACH) Network and for
electronic payments in the areas of Internet commerce, electronic bill
and invoice presentment and payment (EBPP, EIPP), e-checks, financial
electronic data interchange (EDI), international payments, and
electronic benefits services (EBS)."

What Is ACH?
Google Cache:

"ACH payments include:

    * Direct Deposit of payroll, Social Security and other government
benefits, and tax refunds;
    * Direct Payment of consumer bills such as mortgages, loans,
utility bills and insurance premiums;
    * Business-to-business payments;
    * E-checks;
    * E-commerce payments;
    * Federal, state and local tax payments."

It seems that ACH is only open to accredited financial institutions;
you may have to have a partnership with an institution that's already
accredited in order to use this system. You would have to be approved
by NACHA. I will give you a workaround for this later.


"New Payments Applications

NACHA develops new payments applications through an open and
disciplined process that measures the impact on all Network
participants, including originators and receivers, and is responsive
to the priorities of depository financial institutions."

Keep in mind that this would not automatically mean that you would
have to qualify as a bank.  Paypal is a "financial institution" that
does not call itself a bank. So, you would have to set up some kind of
financial institution in order to do this directly through NACHA. 
Companies that use direct deposit do it with a private system.  You
may want to try to set something up of that nature. (I elaborate on
this later in my answer.)

Here is how to reach NACHA:

  How to Reach Us

NACHA-The Electronic Payments Association
13665 Dulles Technology Drive, Suite 300
Herndon, Virginia 20171
Phone: 703/561-1100
Fax: 703/787-0996

Membership Inquiries: Anne Andrews.

Banks that want to use electronic payments have to hire a company to
use ACH to do it for them. The largest company of this kind is the
Electronic Payments Network.

Electronic Payments Network

"Electronic Payments Network Announces Industry?s First Centralized
OFAC Screening Service for Cross-Border ACH"$nocookies$/co-press-release.html?id=20051102WF243TNU

"The Electronic Payments Network (, a payments
business of The Clearing House Payments Company, is the only national
private-sector ACH operator in the United States. Its membership
consists of more than 1,600 commercial banks, credit unions and
savings banks. EPN processed more than 3.4 billion payments in 2004.
The Clearing House ( is a private-sector,
global payment systems infrastructure that clears and settles more
than 20 million payments for $1.5 trillion per day. The Clearing House
manages payment services that span the entire spectrum of paper,
paper-to-electronic and electronic payments."

The Clearing House

You will most likely not want to use these solutions unless you use
them directly through your bank.  You would want to sign up with a
private ACH company that can serve as a conduit for you to make

ACH Direct

ACH Direct will work between businesses and consumers or businesses to
other businesses to make electronic deposits.  They should be able to
fit your needs. And if not, Paybycheck will most likely work.


You should also be able to sign up for ACH direct transmission through
almost any bank. Here is an example.

Huntington ACH System


There is a Global ACH version that PayPal uses through JPMorganChase.

Global ACH with JPMorganChase

Search terms:
ach paypal
electronic payments network
ach direct

If you need any additional clarification, let me know and I'll be glad to help.

speedymediagroup-ga rated this answer:5 out of 5 stars
Great work - this person is a true asset

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