Electronic Payments Network (EPN)

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Electronic Payments Network (EPN)

What is the EPN?

The Electronic Payments Network (EPN) is a private-sector automated clearinghouse (ACH) in the United States that processes electronic funds transfers. Along with the Federal Reserve’s ACH system, the EPN handles bulk credit and debit transactions between financial institutions for businesses and individuals.

Common uses

  • Payroll direct deposits
  • Government benefits and tax refunds
  • Dividend distributions
  • One-time and recurring bill payments (loan payments, insurance premiums, mortgage and utility payments)
  • Telephone and internet-initiated payments

How it works

  1. An originator (individual, business, or other entity) initiates an ACH credit or debit (e.g., payroll deposit or bill payment).
  2. The originating depository financial institution (ODFI) collects and formats the ACH entries and transmits them in batches at scheduled intervals.
  3. An ACH operator—the EPN or the Federal Reserve—receives and sorts the batches.
  4. The operator makes the entries available to the receiving depository financial institution (RDFI).
  5. The RDFI posts the credit or debit to the receiver’s account.

Timing and settlement

  • ACH credit transactions typically settle in one to two business days.
  • ACH debit transactions typically settle in one business day.

Ownership and history

The EPN is owned and operated by The Clearing House Payments Company, a private consortium of major commercial banks. Launched in 1981, the EPN introduced an evening processing cycle that enabled overnight delivery of time-sensitive corporate ACH debits and helped replace older paper-based transfer methods. It later supported the development of an all-electronic transfer environment, improving efficiency and timeliness across financial operations.

Why it matters

The EPN provides a secure, efficient, and cost-effective way to move funds electronically in bulk. Compared with checks and many card-based transfers, ACH via EPN reduces processing costs and supports reliable recurring payments for both businesses and consumers.

Key takeaways

  • The EPN is one of two ACH operators in the U.S., serving the private sector.
  • It processes bulk credit and debit transfers for payroll, benefits, refunds, and bill payments.
  • Transactions are batched through ODFIs, processed by an ACH operator, and settled by RDFIs, typically within one to two business days.
  • Owned by The Clearing House, the EPN played a pivotal role in creating an all-electronic ACH environment.