Nacha: New Rule Providing Clarity on Definition of IATs Takes Effect Sept. 18
September 1, 2026 / Source: Nacha
A change to the Nacha Operating Rules intended to provide greater precision around International ACH Transactions (IATs) takes effect Sept. 18, 2026.
The new Rule replaces the existing definition of an IAT to help ACH Network participants more easily determine when an ACH payment should be classified as an IAT.
The new definition describes an IAT as the U.S. ACH Network component of an international payment transaction. An international payment transaction is a transfer of funds or monetary value that originates with, transits through or is delivered to an account at an office of a financial agency outside the United States or is otherwise received from a sender or delivered to a receiver through a facility of a financial agency outside the United States.
Although the language is being updated for clarification, the purpose of the IAT Standard Entry Class Code remains the same: identifying international ACH payments so financial institutions and other ACH Network participants can fulfill their compliance obligations.
Who Should Pay Attention?
Originators, Third-Party Service Providers, Third-Party Senders and ODFIs should review the new definition and determine whether it changes how they identify IAT payments.
The new definition could result in some payments previously treated as domestic being identified as IATs, or vice versa, if parties were unclear about the previous definition. Organizations with newly identified IAT activity may need to consider IAT Originator onboarding, agreements, due diligence and Receiver information requirements.
RDFIs should also be aware of the change. A change in how payments are identified could affect the volume of IAT Entries they receive and, consequently, compliance screening volumes. This accuracy will provide benefits to ACH Network participants that utilize IATs. As the updated definition provides better clarity about when the IAT SEC Code must be used, received entries should be more accurate and aid in RDFI compliance efforts.
The change is one of several IAT-related Nacha Operating Rules changes taking effect over the next two years. Beginning Jan. 1, 2027, financial institutions will be required to maintain IAT contacts in the ACH Contact Registry; financial institutions may add their IAT contact into the Registry now. Additional changes follow in March 2027 and March 2028, including a new return reason code for sanctions compliance obligations.
With Sept. 18 approaching, now is a good time for organizations to review the IAT definition and determine whether any changes to their processes, procedures or agreements are needed as a result of this clarification.
Learn more about the Definition of IAT Entries Rule, including details, impacts and FAQs.