ACH Processing Return Codes and NACHA Rules
The company identification number provided is invalid or incorrect. Large payment processors will face mandatory fraud monitoring requirements including real-time transaction pattern analysis and automated risk scoring. Receiving Depository Financial Institutions must respond to R06 (ODFI Requested Return) within two banking days, accelerating dispute resolution timelines. For transactions initiated Accounting Periods and Methods through online banking or e-commerce platforms. Used for consumer transactions including direct deposit, loan payments, and recurring bill payments. Modern Treasury makes it really easy to initiate a return with the appropriate return code and automates linking the return to the original payment.
Less common ACH return reason codes
Global ACH can help companies move money from US-domiciled accounts across borders using local rails. Payment rails are the underlying systems and networks that facilitate the movement of funds between parties in financial transactions. For help with ACH functionality specific to Ramp, visit Ramp Support for more details. For example, if you make an ACH payment by mistake and want to reverse it, reading about ACH returns won’t be helpful.
List of All ACH Return Codes and Time Frames
- Knowing what each return code means helps businesses fix problems fast and stay out of trouble.
- At that point, collections must be settled outside of the ACH Network.
- When this happens, the requesting business will submit outdated information, but the updated information will be sent back to them.
- If you believe the transaction was authorized, refer to your user agreement / customer contract to see what recourse you have.
For complex or unclear return codes, work directly with your bank’s ACH support team to clarify the issue and next steps. The transaction was initiated with a corporate standard entry class (SEC) code but was posted to a consumer account without proper authorization. The originator must use the appropriate SEC code for consumer accounts.
Description
An ACH reversal refers to an erroneous ACH payment that a payment originator requests to take back, or reverse. This list will be continually updated as ach return NACHA updates their operating rules. Welcome to Learn, where we provide straightforward, easy-to-understand definitions of the payments industry.
ACH Return Codes: The Complete List
The foreign RDFI does not participate in the International ACH Transactions (IAT) program. The originator should use an alternative payment method or contact the receiver for a different bank. The representative payee indicator provided is incorrect or invalid. A stop payment was placed on the source document of the transaction. The source document for the transaction was presented for payment. The corporate receiver claims the transaction was not properly authorized.
If that money is later returned, the merchant is out for the amount of the transaction as well as the return fee. Companies selling physical goods or services may deliver purchases in good faith, only to be left unpaid if the ACH transaction is returned. There is one looming challenge with ACH payments, however—ACH returns.
This code means that the recipient of a recurring debit transaction has set a stop payment order. This code means that the customer who approved the ACH payment has already revoked authorization. Reach out to the customer to settle any issues causing the disputed payment. Nacha is an independent organization responsible for administering the ACH network, enforcing guidelines related to ACH payments, and driving the adoption of ACH systems. Businesses can set customized risk profiles based on their customers or industry. Using Plaid Signal can help reduce fraud and lower https://www.bookstime.com/ return risk by as much as 50%, allowing businesses to scale their ACH offering while managing risk.
Similar to bounced checks, there are fees and risks involved in ACH returns. For starters, ACH returns typically cost between $2 and $5, depending on the ACH processor. An end user may incur fees from their bank if an ACH transaction is returned due to insufficient funds or results in an overdraft to the bank account. The originating depository financial institution (ODFI) requests that a transaction be returned because it contains incomplete, erroneous, or incorrect data. This can also occur if a stop payment order was requested on a recurring debit entry.