PS-ACH is an Automated Clearing House solution developed by ProgressSoft, using today’s most advanced technologies. It is a flexible application, which can be readily configured to serve diverse banking communities with distinctive needs. It is deployed in several countries, and has received consistently excellent reviews from Central Banks, banks, corporations, utility companies and individuals.
PS-ACH can operate 24/7, providing a platform that exchanges retail payment instructions between participants using Straight-Through-Processing (STP). PS-ACH utilizes standard interfacing channels with ISO 20022 formatted messages. Built-in converters also enable PS-ACH to operate with SWIFT MT message formats.
PS-ACH processes credit transfers (also known in some countries as direct credits) and direct debits. It can also process truncated checks as direct debits.
The core of PS-ACH is the Central System, which handles clearing of payment orders along with payment routing. It also tracks participants’ balances in real-time throughout the clearing sessions, and interfaces with the RTGS system for final settlement.
Clearing involves both a sorting function and a netting function. Multiple settlement cycles can be implemented during the day based on each banking community needs. At the end of each settlement cycle, payments become final (i.e. irrevocable and unconditional) once participants’ net positions have been settled through RTGS.
PS-ACH can interface with any modern RTGS system designed according to international standards. The use of PS-RTGS, the RTGS system developed by ProgressSoft, provides additional advantages because the two systems have been developed with identical standards. Since ProgressSoft ACH and RTGS products are highly configurable, they can accommodate diverse requirements from Central Banks around the globe, with minimum customization. Therefore, the combination of PS-ACH with PS-RTGS creates a highly flexible payments infrastructure that is capable of achieving near-real-time settlement of payment transactions.
PS-ACH is capable of processing batches of payments as well as single payment instructions. Specific processing behaviors can be configured according to the purpose of each payment order (such as salary, tax, bill payment, dividends and others). Workflows can be defined to meet each payment's processing needs. PS-ACH also processes forward-dated payments (cleared on future dates), and standing orders (re-occurring payments, periodically scheduled).
To avoid errors, transactions that are not acknowledged quickly by the receiving banks (such as the failure in finding the final beneficiary) are rejected and the originator is informed. To further cope with errors, PS-ACH offers multiple options; all of which adhere to the principle of irrevocability of final settlements. For instance, payment orders can be cancelled by the originator before settlement; credit transfers can be returned by the receiving bank after settlement and direct debits can be reversed if the payer so requests.
In PS-ACH the Central Bank or Clearing House is able to define many parameters such as the management of the participants’ accounts (for example opening and closing of accounts, and maximum net debit positions), the number and timing of the clearing sessions (including cut-off times and settlement schedules), the charging schemes and the reporting arrangements. In addition, the system provides user-friendly tools helping the system administrator monitor real-time participants’ positions, both individually and aggregated.
The PS-ACH Participant System is a web-based system hosted at the Central Bank or Clearing House, which allows participants to make the best use of the Central System and to speed-up processing time. With its Participant System, ProgressSoft ensures that PS-ACH serves participants efficiently, avoiding risks and blockages. The Participant System allows participants to operate either centrally from the head office or from branches through a user-friendly web browser interface.
Key features of the Participant System include:
The Participant System extends open Application Programming Interfaces (APIs) for participating members to submit and receive payment messages as well as replies, cancellations, returns and reversals directly from/to their internal systems. Those APIs utilize ISO20022 and SWIFT MT message formats and they are exposed over a variety of communication channels including S/FTP, Message Queues, and Web Services.
The Participant System of PS-ACH also includes a Mandate Management System, which offers banks and billers the ability to initiate and manage e-mandates as a mean to pre-authorize direct debit transactions. It also offers real-time validation and matching between direct debit transactions and their corresponding mandates. These validations include checks on the validity of the mandate status as well as payment terms and conditions, such as scheduling options (including frequency and settlement date) and transaction amount limits. To provide even more flexibility, PS-ACH allows for configuring certain participants like the central bank as "Safe Senders" which are allowed to send direct debit transactions up to a certain limit without the need for a pre-authorization mandate.
PS-ACH can be implemented in three different configurations, depending on each country’s banking structure: the Centralized Model, the Distributed Model, and the Hybrid Model.
In the Centralized Model, the entire solution and all of its components, including the Central System and the Participant System, are deployed on the servers of the Central Bank or Clearing House, and no installation takes place on the Participant Banks’ side. Accordingly, the Participant Banks can access the system and use its functionalities through a network accepted by the Central Bank (often a private network).
In the Distributed Model, the Central System is deployed at the Central Bank or Clearing House, while the Participant System is deployed at each individual Participant Bank. Banks use the Participant System to process their outward and inward payments, as well as to access various system-generated reports. For this model, it is the duty of each bank to integrate the Participant System with its Core Banking System.
The Hybrid Model combines the Distributed and Centralized models by deploying the Central and the Participant Systems at the Central Bank or Clearing House where ASP access is given for smaller banks that process a low volume of transactions, while larger banks can use their own Participant System deployed at their premises.
Both components (Central and Participant) are interoperable with third party systems in order to achieve full Straight-Through-Processing (STP). The Central System can be easily integrated with the Real-Time Gross Settlement (RTGS) system while the Participant System can be integrated through standard interfaces with participants' Core Banking Systems.
In designing its PS-ACH, ProgressSoft focused on the vital need to protect participants against potential frauds. The use of encryption, digital signatures, Secured Socket Layer (SSL), hashing algorithms, and other technologies, provides a secure environment for end-to-end communication. In addition, Participant Systems work as standalone applications, which have their own security sub-systems operating in a decentralized manner. Each system administrator defines system users, groups, working hours, and other functions in a robust, scalable, and highly configurable manner, which ensures the protection, confidentiality, availability, and integrity of sensitive data.
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