The perfect P2P pithy primer

As more and more credit unions start offering (or think about offering) new services to their members, it is vital to understand the obligations and risks involved with those services. One common service being added or expanded is person-to-person (P2P) transfers. This service allows members to send or receive money from other individuals and allows credit unions to compete with popular app-based services that also provide P2P transfer services.

Many P2P services are provided via online banking or a mobile app and use the ACH network to process the transfers. In that case, a credit union is providing ACH origination services to its members and has two options for doing so: ACH debit or ACH credit transfers. Today’s post covers some of the basic compliance differences between the two options.

ACH Debit Transfers

An ACH debit transfer works like this: Harry owes Sally $50. Sally logs on to her online banking platform at The NYC Credit Union and initiates a P2P transfer for $50 from Harry’s account. Harry’s account at Manhattan FCU is debited $50 and the funds are credited to Sally’s account.

 

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