Terms & Conditions ACH

Processing Agreement For Electronic Financial Transactions

This  Agreement,  dated  as  of  ____/____/____  is  between  _______________________________________  (“Company”)  and Atlantic-Pacific Processing Systems, Inc. (“APPS”).


  1. Company wishes to initiate Credit and Debit Entries by means of the Automated Clearing House Network, Electronic Check Clearing House and other transaction processes, networks or systems pursuant to the terms of this Agreement and the rules of the National Automated Clearing House Association (the “Rules”), and APPS is willing to act as a Third‐Party Sender with respect to such Entries.
  2. Unless otherwise defined herein, capitalized terms shall have the meanings provided in the Rules. The term “Entry” shall have the meaning provided in the Rules and shall also mean the data received from Company hereunder from which APPS initiates each Entry.


  1. Transmittal of  Entries  by    Company  shall  transmit  credit  and  debit  Entries through  APPS, unless otherwise agreed  upon. Company agrees that its ability to originate entries  under this agreement is subject to exposure limits in accordance with the Rules and as set forth in the ACH Addendum, to be determined after credit and background check on the Company and its Principals.
  2. Security Procedures.
  • Company and APPS shall comply with the security procedures requirements described in The Rules hereto with respect to Entries transmitted by Company to APPS. Company acknowledges that the purpose of such security procedures is for verification of authenticity and not to detect an error in the transmission or content of an Entry. No security procedures for the detection of any such error has been agreed upon between APPS and Company.
  • Company is strictly responsible to establish and maintain the procedures to safeguard against unauthorized transmissions. Company warrants that no individual will be allowed to initiate transfers in the absence of proper supervision and safeguards, and agrees  to  take  reasonable  steps  to  maintain  the  confidentiality  of  the  security  procedures  and  any  passwords,  codes,  security devices and related instructions provided by Financial Institution in connection with the security procedures described in The    If  Company  believes  or  suspects  that  any  such  information  or  instructions  have  been  known  or  accessed  by unauthorized  persons,  Company  agrees  to  notify  APPS immediately  followed  by  written  confirmation.  The  occurrence of unauthorized access will not affect any transfers made in good faith by APPS prior to receipt of such notification and within a reasonable time period to prevent unauthorized transfers.
  1. Compliance with Security Procedures.
  • If an Entry (or a request for cancellation or amendment of an Entry) received by APPS purports to have been transmitted or authorized by Company, it will be deemed effective as Company’s Entry (or request) and Company shall be obligated to pay APPS the amount of such Entry even though the Entry (or request) was not authorized by Company, provided APPS accepted the Entry in good faith and acted in compliance with the security procedures referred to in The Rules with respect to such entry.
  • If an  Entry  (or  request  for  cancellation  or  amendment  of  an  Entry)  received  by  APPS  was  transmitted  or  authorized  by  Company, Company shall pay APPS the amount of the Entry, whether or not APPS complied with the security procedures referred to in The Rules with respect to that Entry and whether or not that Entry was erroneous in any respect or that error would have been detected if APPS had complied with such procedures.
  • APPS and the OFDIs reserve the right to routinely analyze and audit Company’s compliance withthis Agreement and the Rules, including Company’s transactional and return activity. In the event the Company exceeds its established threshold parameters, or is not in compliance with the Rules, APPS and the ODFIs reserve the right to take any action deemed necessary, including, but not limited to, modifying limits or thresholds, hold times, pricing, suspension. or termination of the this Agreement.
  1. Recording and Use  of    Company  and  APPS  agree  that  all  telephone  conversations  or  data  transmissions between them or their agents made in connection with this Agreement may be electronically recorded and retained by either party by use of any reasonable means.
  2. Processing, Transmittal and Settlement by APPS.
  • APPS shall (i) process Entries received from Company to conform with the file specifications set forth in the Rules, (ii) transmit such Entries as a Third‐Party Processor to the Originating Depository Financial Institution (ODFI), and (iii) settle for such Entries as provided in the Rules.

APPS ACH Processing Agreement Rev1-04.20

  • APPS shall transmit  such Entries  to  the ODFI  by  the  deadline of the  ODFI, provided (i)  such Entries  are  received  by APPS’ related cut‐off time, and (ii) the ODFI is open for business on such business day.
  • If any of the requirements of clause is not met, APPS shall use reasonable efforts to transmit such Entries to the ODFI by the next deposit deadline of the ODFI.
  1. Rejection of Entries. APPS may reject any Entry which does not comply with the requirements of Section 1, Transmittal of Entries By  Company,  or  Section  2,  Security  Procedures.  APPS  may  reject  any  entry  if  Company  does  not  adhere  to  security  procedures as described in The Rules. APPS shall notify Company by electronic transmission of such rejection no later than the business day such Entry would otherwise have been transmitted by APPS to the ODFI. Notices of rejection shall be effective when given. APPS shall have no liability to Company by reason of rejection of any such Entry or the fact that such notice is not given at an earlier time than that provided for herein.
  2. Cancellation or Amendment by Company. Company shall have no right to cancel or amend any Entry after its receipt by APPS. However, if such request complies with the security procedures described in The Rules for the cancellation of Data, APPS shall use reasonable efforts to act on a request by Company for cancellation of an Entry prior to transmitting it to the ODFI, but shall have no liability if such cancellation is not affected. Company shall reimburse APPS for any expenses, losses, or damages APPS may incur in effecting or attempting to effect the cancellation or amendment of an Entry.
  3. Notice of Returned Entries and Notifications of Change. APPS shall notify Company by electronic transmission of the receipt of a returned  entry  from  the  ODFI  no  later  than  one  business  day  after  the  business  day  of  such    Except  for  an  Entry  retransmitted by Company in accordance with the requirements of Section 1, Transmittal of Entries By Company, APPS shall have no obligation to retransmit a returned Entry to the ODFI if APPS complied with the terms of this Agreement with respect to the original Entry.

APPS  shall  provide  Company  all  information,  as  required  by  the  NACHA  Operating  Rules,  with  respect  to  each  Notification  of  Change (NOC) Entry or Corrected Notification of Change (Corrected NOC) Entry received by APPS relating to Entries transmitted by Company. APPS must provide such information to Company within two banking days of the Settlement Date of each NOC or Corrected  NOC  Entry.  Company  shall  ensure  that  changes  requested  by  the  NOC  or  Corrected  NOC  are  made  within  six  (6)  banking  days  of  Company’s  receipt  of  the  NOC  information  from  APPS or  prior  to  initiating  another  Entry  to  the  Receiver’s account, whichever is later.

  1. Payment by Company for Entries; Payment by ODFI for Entries.
  • Company shall pay APPS the amount of each credit Entry transmitted by Financial Institution pursuant to this Agreement at such time on the Settlement Date with respect to such credit Entry as APPS, in its discretion, may determine.
  • Company shall promptly pay APPS the amount of each debit entry returned by an RDFI that was transmitted by APPS pursuant to this Agreement.
  • APPS shall pay  Company the  amount  of  each  debit  Entry  transmitted  by APPS  pursuant  to  this Agreement  at such time  as may determine.
  • APPS shall  promptly  pay  Company  the  amount  of  each  credit  Entry  returned  by  an  RDFI  that  was  transmitted  by  APPS pursuant to this Agreement.
  1. Substitute Checks (Check 21). APPS hereby agrees to provide a check conversion software solution (Software) to the Company to image and capture payment information from Items for the purpose of electronic clearing under the Check 21 Act. Consumer checks, corporate checks, money orders, cashier’s checks, government checks and third party checks may be cleared as allowed by Check 21 legislation.
  • Receipt of Items Submitted for Deposit as Check 21 Items. The Company must receive Items that the Company uses to create a Check 21 Item, in person, by U.S. mail, courier or deposit to the Company’s drop box.
  • Eligible Items. All Items deposited by the Company at the Bank as Check 21 Items must be eligible for Check 21 clearing pursuant to Federal and State law.
  • Image Quality. The Company shall be responsible to complete proper scanning of the front and back of each Check 21 Item.

The Company must insure that a full image is displayed and aligned properly complying with the requirements of the Check 21

  • The Company shall be responsible for verifying the accuracy of the MICR capture by visually viewing the Item displayed on the screen and comparing it to the MICR field. The Company shall be responsible for insuring the MICR is captured accurately by rescanning the item or making necessary edits.
  • The name of the payee on each Check 21 Item shall be only that of the Company, and shall not include an additional payee(s) or be a third‐party that endorsed the item to the Company.
  • The Company shall enter the amount written on the original Check 21 Item and shall not alter the amount or cause entry of the amount to vary from the portion of the Check 21 Item where the amount of said Item is written in text. If the numeric amount on the original Check 21 Item is inconsistent with the amount on the portion of the Check 21 Item where the amount of said Check 21 Item is written in text, the Company shall not submit said Item as a Check 21 Item.  If the Company nonetheless submits for deposit a Check 21 Item where the number amount varies from the portion of the Check 21 Item where the amount of said Item is written in text, the Company acknowledges and agrees that it will be liable for any claims resulting from the inconsistency of the amounts.
  • All Check 21 Items must bear the drawer’s signature or indicate the drawer’s name on the original check before the Company submits said Checks for deposits as Check 21 Items.
  • The Company shall retain the original Item used to create a Check 21 Item for a period of at least 14 days in a secure location and be able to produce the original item if requested by WCC. On the 14th day, the Company may destroy an original Item used to create a Check 21 Item. In determining Company’s retention schedule for the original item, Company should consider its indemnification obligation under Section 10.h of this Agreement.  The amount subject to this obligation to indemnify may be reduced should Company retain the original check or a sufficient copy as defined in Regulation CC.  In some cases that retention period could exceed 120 days (CC 229.55).
  • APPS will maintain a record and image of each Item saved by the Company using APPS Software.
  1. Representation, Warranties, and Indemnification Regarding Substitute Check Transactions.
  • The Company warrants to APPS that no Item will be duplicated for deposit either through use of the Software or deposited separately as a physical deposit of the original Item for any Item submitted to the Bank as a Check 21 Item.
  • The Company warrants to APPS that no disclosure or opt‐out is required for any Check 21 Items the Company submits to

Bank to be cleared using the Check 21 Act.

  • The Company warrants to APPS and the Company will indemnify and reimburse all damages claimed against the Bank as to any alleged violation of the Check 21 Act relating to any transaction subject to this Agreement.
  • Company warrants to APPS that all Substitute Checks meet all the requirements for legal equivalence described in

Regulation CC §229.51(a)(1‐2).

  • The Company shall indemnify the APPS for any loss incurred as a result of Company’s use of a Substitute Check instead of the original check,  including  but  not  limited  to  any  claim  made  for  the  expedited  re‐credit  by  a  consumer  (CC  229.54)  or  the  indemnification of a bank (CC §229.53 and 225.55).
  1. Company Representations and Agreements; Indemnity.
  • With respect to each and every Entry transmitted by Company, Company represents and warrants to APPS and agrees that (a) each person shown as the Receiver on an Entry received by APPS from Company has authorized the initiation of such Entry and the crediting or debiting of its account in the amount, (b) such authorization is operative at the time of transmittal or crediting or debiting by APPS as provided herein, (c) Entries transmitted to APPS by Company are limited to those types of credit and debit Entries set forth in Section 1, Transmittal of Entries By Company, (d) Company shall perform its obligations under this Agreement in accordance with all applicable laws, regulations, and orders, including, but not limited to, the sanctions laws, regulations, and orders administered by OFAC; laws, regulations, and orders administered by FinCEN; and any state laws, regulations, or orders applicable to the providers of ACH payment services, and (e) Company shall be bound by and comply with the provision of the Rules (among other provisions of the Rules) making payment of an entry by the RDFI to the Receiver provisional until receipt by the RDFI of final settlement for such entry. Company specifically acknowledges that it has received notice of the rule regarding

APPS ACH Processing Agreement Rev1-04.20

provisional  payment  and of  the  fact  that,  if  such  settlement  is not  received, the  RDFI shall  be  entitled  to  a  refund  from  the  Receiver of the amount credited and Company shall not be deemed to have paid the Receiver the amount of the entry. Company shall indemnify APPS against any loss, liability or expense (including attorneys’ fees and costs) resulting from or arising out of any breach of any of the foregoing warranties, representations, or agreements.

  • Company shall  provide  a  working  customer  service  telephone  number  in  which  the  Receiver  may  reach  them  in  case  of  questions regarding the transaction initiated by Company. Company is responsible for all customer service to Receiver or RDFI which relates to the transactions initiated by Company. APPS will not be liable to discuss any transaction related questions with Company’s Receivers. If for any reason the customer service telephone number has been changed, disconnected or no longer in service,  APPS  has  the  right  to  place  a  hold  of  the  release  of  Company’s  settlements  until  corrective  action  is    If  no  corrective action is taken, the funds will be held for a maximum of ninety (90) days of the last initiated transaction by Company.
  1. APPS Responsibilities; Liability; Limitations on Liability; Indemnity.
  • In the  performance  of  the  services  required  by  this  Agreement,  APPS  shall  be  entitled  to  rely  solely  on  the  information,  representations, and warranties provided by Company pursuant to this Agreement, and shall not be responsible for the accuracy or completeness thereof. APPS shall be responsible only for performing the services expressly provided for in this Agreement, and  shall  be  liable  only  for  its  negligence or  willful  misconduct  in  performing  those services.  Financial  Institution  shall  not  be  responsible  for  Company’s  acts  or  omissions  (including,  without  limitation,  the  amount,  accuracy,  timeliness  of  transmittal  or authorization  of  any  Entry  received  from  Company)  or  those  of  any  other  person,  including,  without  limitation,  any  Federal  Reserve  Bank,  ODFI,  ACH  Operator  or  transmission  or  communications  facility,  any  Receiver  or  RDFI  (including,  without limitation, the return of an Entry by such Receiver or RDFI), and no such person shall be deemed WCC’s agent. Company agrees to indemnify APPS against any loss, liability or expense (including attorneys’ fees and costs) resulting from or arising out of any claim of any person that APPS is responsible for any act or omission of Company or any other person described in this Section 11(a).
  • APPS shall be liable only for Company’s actual damages due to claims arising solely from APPS’ obligations to Company with respect to  Entries  transmitted  pursuant  to  this  Agreement;  in  no  event  shall  APP  be  liable  for  any  consequential,  special,  incidental, punitive or indirect loss or damage which Company may incur or suffer in connection with this Agreement, whether or not  the  likelihood  of  such  damages  was  known  or  contemplated  by  APP  and  regardless  of  the  legal  or  equitable  theory  of  liability which Company may assert, including, without limitation, loss or damage from subsequent wrongful dishonor resulting from APPS’ acts or omissions pursuant to this Agreement.
  • Without limiting the generality of the foregoing provisions, APPS shall be excused from failing to act or delay in acting if such failure or delay is caused by legal constraint, interruption of transmission or communication facilities, equipment failure, war, emergency conditions or other circumstances beyond APPS’ control. In addition, APPS shall be excused from failing to transmit or delay in transmitting an Entry if such transmittal would result in APPS’ having exceeded any limitation upon its intra‐day net funds position established pursuant to present or future Federal Reserve guidelines or in APPS’ reasonable judgment otherwise would violate any provision of any present or future risk control program of the Federal Reserve or any rule or regulation of any other U.S. governmental regulatory authority.
  • Subject to the foregoing limitations, APPS’ liability for loss of interest resulting from its error or delay shall be calculated by using a rate equal to the average Federal Funds Rate at the Federal Reserve Bank of New York for the period involved. At APPS’ option, payment of such interest may be made by crediting the Account.
  1. Inconsistency of Name and Account Number. Company acknowledges and agrees that, if an Entry describes the Receiver inconsistently by name and account number, payment of the Entry transmitted by APPS to the RDFI may be made by the RDFI on the basis of the account number supplied by the Company, even if it identifies a person different from the named Receiver, and that Company’s obligation to pay the amount of the Entry to APPS is not excused in such circumstances.
  2. Payment for Services. Company shall pay APPS the charges for the services provided in connection with this Agreement, as set forth in the ACH Addendum attached hereto. All fees and services are subject to change upon thirty (30) calendar days prior written notice from APPS to Company. Such charges do not include, and Company shall be responsible for payment of, any sales, use, excise, value added, utility or other similar taxes relating to such services, and any fees or charges provided for in the agreement between APPS and Company.
  3. From time to time APPS may amend any of the terms and conditions contained in this Agreement, including, without limitation, any cut‐off time, any business day, and any part of the ACH Addendum attached hereto. Such amendments shall become effective upon receipt of notice by Company or such later date as may be stated in APPS’ notice to Company.


  1. Notices, Instructions, Etc.
  • Except as otherwise expressly provided herein, APPS shall not be required to act upon any notice or instruction received from Company or any other person, or to provide any notice or advice to Company or any other person with respect to any matter.
  • APPS shall be entitled to rely on any written notice or other written communication believed by it in good faith to be genuine and to have been signed by an Authorized Representative, and any such communication shall be deemed to have been signed by such person. The names and signatures of Authorized Representatives are set forth in the merchant application. Company may add or delete any Authorized Representative by written notice to APPS signed by at least two Authorized Representatives other than that being added or deleted. Such notice shall be effective on the second business day following the day of APPS’ receipt thereof.
  • Except as otherwise expressly provided herein, any written notice or other written communication required or permitted to be given under this Agreement shall be delivered, or sent by United States registered or certified mail, postage prepaid, or by express carrier, and, if to Financial Institution, addressed to Atlantic-Pacific Processing Systems, Inc. 18350 Mount Langley Street, Suite 205, Fountain Valley, CA 92708.  Written  communication  may  also  be  sent  electronically  via  fax  to  (714)  965-2714  or  email  to  compliance@approcessing.com.

and, if to Company, addressed to the mailing address listed on the application or electronically via the fax or email address provided by the Company on the merchant application, unless another address is substituted by notice delivered or sent as provided herein. Except as otherwise expressly provided herein, any such notice shall be deemed given when received.

  1. Data Retention. Company shall retain data on file adequate to permit remaking of Entries for fourteen (14) days following the date of their transmittal by APPS as provided herein, and shall provide such data to APPS upon its request. Without limiting the generality of the foregoing provision, Company specifically agrees to be bound by and comply with all applicable provisions of the Rules regarding the retention of documents or any record, including, without limitation, Company’s responsibilities to retain all items, source documents, and records of authorization in accordance with the Rules.
  2. Evidence of Authorization. Company shall obtain all consents and authorizations required under the Rules and shall retain such consents and authorizations for two years after they expire.
  3. Request for  Proof  of    APPS  may  request  proof  of  authorization  for  any  and/or  all  transactions  initiated  by

Company. Company must provide proof of authorization within three (3) business days from date of written request for proof. Should the authorization requested not be provided to APPS within the time‐frame, a $100.00 fee shall be charged to Company, and all pending settlements and transactions will be held. If determined termination of this agreement is necessary, all pending settlements will be held for a maximum of ninety (90) days.

  1. Cooperation in Loss Recovery Efforts. In the event of any damages for which APPS or Company may be liable to each other or to a third party pursuant to the services provided under this Agreement, APPS and Company will undertake reasonable efforts to cooperate with each other, as permitted by applicable law, in performing loss recovery efforts and in connection with any actions that the relevant party may be obligated to defend or elects to pursue against a third party.
  2. Termination. Company may terminate this Agreement at any time. Such termination shall be effective on the third business day following the day of APPS’ receipt of written notice of such termination or such later date as is specified in that notice. APPS reserves the right to terminate this Agreement immediately upon providing written notice of such termination to Company. Any termination of this Agreement shall not affect any of APPS’ rights and Company’s obligations with respect to Entries initiated by Company prior to such termination, or the payment obligations of Company with respect to services performed by APPS prior to termination, or any other obligations that survive termination of this Agreement.
  3. Entire Agreement. This Agreement (including the ACH Addendum attached hereto) is the complete and exclusive statement of the agreement between  APPS  and  Company  with  respect  to  the  subject  matter  hereof  and  supersedes  any  prior  agreement(s)  between APPS and Company with respect to such subject matter. In the event performance of the services provided herein in accordance  with  the  terms  of  this  Agreement  would  result  in  a  violation  of  any  present  or  future  statute,  regulation  or  government policy to which APPS is subject, and which governs or affects the transactions contemplated by this Agreement, then this Agreement shall be deemed amended to the extent necessary to comply with such statute, regulation or policy, and APPS shall incur no liability to Company as a result of such violation or amendment. No course of dealing between APPS and Company will constitute a modification of this Agreement, the Rules, or the security procedures or constitute an agreement between APPS and Company, regardless of whatever practices and procedures APPS and Company may use.
  4. Non‐Assignment. Company may not assign this Agreement or any of the rights or duties hereunder to any person without

APPS’ prior written consent.

  1. APPS may waive enforcement of any provision of this Agreement. Any such waiver shall not affect APPS’ rights with respect to any other transaction or modify the terms of this Agreement.
  2. Binding Agreement; Benefit. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective legal representatives, successors and assigns. This Agreement is not for the benefit of any other person, and no other person shall have any right against APPS or Company hereunder.
  3. Headings are used for reference purposes only and shall not be deemed a part of this Agreement.
  4. In the event that any provision of this Agreement shall be determined to be invalid, illegal or unenforceable to any extent, the remainder of this Agreement shall not be impaired or otherwise affected and shall continue to be valid and enforceable to the fullest extent permitted by law.
  5. Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of California.

IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed by their duly authorized officers.

____________________________________________ Company Name Atlantic-Pacific Processing Systems, Inc.
________________________________  ___/___/___ _______________________________  ___/___/___
Signature                                                           Date Signature                                                           Date
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