With the payments landscape evolving rapidly and fraud threats becoming increasingly sophisticated, Nacha has introduced significant updates to its rules, set to take effect in 2026. These changes aim to enhance fraud prevention, improve standardization, and ensure the continued reliability of the ACH network.
Preparing for these changes is not just about compliance, it is also an opportunity to strengthen systems, improve operational workflows, and stay ahead of fraud risks. Early preparation will be critical to ensuring a seamless transition and avoiding disruptions in payment processing.
Key 2026 Nacha rule changes
1. Fraud monitoring requirements
One of the most significant updates focuses on strengthening fraud detection capabilities across the ACH network. Nacha is addressing the growing threat of credit-push fraud, including schemes such as business email compromise and unauthorized account access.
What’s changing?
1. “Nacha is requiring ODFI, and each non-Consumer Originator, Third-Party Service Provider, and Third-Party Sender to establish and implement risk-based processes and procedures reasonably intended to identify ACH Entries initiated due to fraud”.1
2. “The Nacha proposal will require RDFIs to establish and implement risk-based processes and procedures designed to identify credit Entries initiated due to fraud”.1
Why does this matter?
Participants in the ACH Network play a critical role in ensuring the security and reliability of ACH transactions. To address the evolving fraud landscape, they must focus on strengthening fraud controls and risk management practices, enhancing fraud detection processes, and investing in advanced fraud monitoring technologies. These efforts will help safeguard the ACH network against emerging threats and maintain its integrity.
2. Standardization of entry descriptions
To promote consistency and improve transparency, Nacha is standardizing the use of the "Company Entry Description" field in ACH transactions.
What’s changing?
Nacha is standardizing the use of the company entry description for the following use cases:
- “PAYROLL” must be used in the Company Entry Description field for Prearranged Payment and Deposit (PPD) credits to clearly identify payment for wages, salaries and similar types of compensation. The rule change requires the standardized description for PPD credit entries to clearly be identified in payroll transactions.
- “PURCHASE” must be used in the Company Entry Description field for online or e-commerce purchases.
Why does this matter?
Standardizing these descriptions will help financial institutions and the ACH network better monitor transaction volumes, identify risks, and enhance fraud prevention efforts.
Key takeaways
To prepare for the 2026 Nacha rule changes, businesses should consider the following actions:
1. Evaluate and enhance current systems
Ensure processes are reviewed and strengthened to mitigate fraudulently initiated ACH transactions. It is vital your businesses’ systems are equipped to meet Nacha’s risk-based fraud detection requirements.
- Adopt advanced fraud detection tools by exploring technologies, such as AI-driven solutions, to strengthen your ability to identify and mitigate risks.
- Update your businesses’ internal systems by reviewing all systems such as ERP or payment processing systems to ensure they can support the new standardized entry descriptions for “PAYROLL” and “PURCHASE”.
2. Collaborate with financial institutions
Align compliance strategies by working closely with your ODFI or RDFI to understand their approach to compliance and ensure alignment with your internal processes.
3. Conduct Internal training
Provide training for internal teams on the new Nacha rules, focusing on compliance requirements, fraud prevention best practices, and the importance of standardized entry descriptions.
4. Ensure that your organization is aware of the Nacha rule implementation timeline
- Phase 1 - March 20th, 2026: Phase 1 applies to ODFIs and non-consumers originators, as well as Third-Party Service Providers and Third-Party Senders, that originated 5 million or more ACH transactions in 2023. This phase also includes RDFIs that received 10 million or more ACH transactions in 2023. This is the effective Date to comply with Nacha “Standardization of Company Entry Descriptions.”
- Phase 2 - June 19th, 2026: Extends the requirements to all remaining non-consumer originators, third-Party participants and RDFIs.
The 2026 Nacha rule changes represent a significant step forward in enhancing the security and efficiency of the ACH network. By focusing on fraud prevention and standardization, these updates aim to address the challenges of an evolving payments landscape while ensuring the continued reliability of the network.
The time to act is now. By preparing early, businesses can ensure a seamless transition to the new rules, positioning themselves for success in a more secure and standardized ACH network.
1. Risk management topics – (Fraud Monitoring Phase 2) | Nacha