How are ACH payments used?
Direct Deposit (PPD) is the most common format. Used to disburse funds to consumer accounts. Examples would be payroll, pension benefits, interest, commissions, expense reimbursements and child support disbursements. Direct Payment (PPD) is used to collect funds from consumer accounts. Examples would be insurance premiums, mortgage payments, subscriptions, membership dues, monthly pledges and rents/leases. Cash Concentration and Disbursement (CCD) is used to collect funds deposited locally by branches or sales outlets to a central operating account. This format can replace expensive wire transfers between same ownership accounts in different institutions. It is also the required format for state and local tax payments mandated to be paid electronically. (TAX) Corporate Trade Exchange (CTX) is used to collect and disburse funds between 2 different companies. Business use CTX payments to pay one another for goods and services.
