This course discusses the benefits and processes for using Automated Clearing House (ACH), the electronic network for financial transactions, for making international payments. ACH is a reliable, cost effective and predictable alternative to the traditional wire or a check for payments to recipients and other companies in other countries.
We’ll cover:
- What international ACH is, how it works, and the differences between U.S. and international ACH
- Customer benefits
- Different payment types, and the process flow
- When to use international ACH versus wire methods
We will also discuss the International Payments Framework Association (IPFA) and how it offers a potential solution for doing international ACH. Finally, statistics and information on the NACHA IAT (International ACH Transaction) will be covered.
This course will help corporate finance and treasury managers understand the advantages of making some of their payments via international ACH.
Learning Objectives
- Identify how your organization can save significant money by using international ACH for certain types of payments
- Recognize elements of the International Payments Framework as a possible for solution for implementing international ACH
- List the process flows for international ACH to understand the timing and how that impacts the payments being made
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Prerequisites
Prerequisite: Previous experience in corporate finance
Advanced Preparation: None
How is the FX rate determined in a transaction, or batch of transactions that involve(s) FX conversion?
Bill,
It is usually the sending bank that determines the FX rate. There may be some instances when other parties are involved (I believe in some cases the Fed uses a bank it selects to set the FX rate for banks utilizing their Global ACH service)....or in rare circumstances the receiving bank may set the rate. It most commonly is the sending bank that the corporate has a contract with to send transactions - rate based on customer profile, amount being sent etc.
Jane