Where does the employer send electronic pay transactions for deposit after authorization for EFT is given?

The correct answer is related to the process of electronic funds transfers (EFTs) in the context of payroll transactions. When an employer processes electronic pay transactions, these transactions must go through specific entities in the banking system.

The Originating Depository Financial Institution (ODFI) is responsible for initiating the EFT. After the employer authorizes the payroll transactions, the ODFI is the entity that actually sends these electronic transactions to the appropriate financial institutions for deposit into employees’ accounts. The ODFI serves as the point of entry for these transactions into the Automated Clearing House (ACH) network, which facilitates the electronic transfer of funds.

The other options represent different components of the EFT process:

• The ACH refers to the network used for processing electronic payments and could encompass various institutions within this system, but it does not specifically indicate the institution responsible for sending the transactions.

• The Receiving Depository Financial Institution (RDFI) is the bank that receives the transactions on behalf of the employee, meaning they hold the employee's account and are responsible for posting the funds.

• NACHA, the National Automated Clearing House Association, is the organization that manages the ACH network and sets the rules for electronic payments but does not directly mediate transactions.

In summary