Cash Management ACH Help

Business Solutions Support
844.238.3838

Monday – Friday 8 a.m. — 5 p.m.

From direct deposit to sending or receiving payments, Cash Management helps take your business to the next level.

What you’ll find on this page:

• Standard Entry Codes Overview
• Consumer PPD Transaction Details
• Commercial CCD and CTX Transaction Details
• Unauthorized Return Time Limits
• Correcting ACH Mistakes or Duplicates
• WEB Debits – Account Validation Requirement
• Same Day ACH
• Additional Resources and Training Guide

Standard Entry Codes

Use the correct SEC Code to ensure that your company complies with ACH rules established by NACHA, the electronic payments association and limit your exposure to unauthorized returns.

Consumer Transactions	Commercial Transactions
PPD: Prearranged Payment & Deposit Use PPD for deposits and/or withdrawals to or from consumer accounts such as direct deposit of payroll, pension, dividends, or payment of utility bills, mortgages, rent, membership dues, loans and other recurring payments.	CCD: Corporate Credit or Debit Use this code for deposits and withdrawals to corporate accounts such as consolidating and sweeping funds between your business accounts, or to make or collect payments to or from other corporate entities. CTX: Corporate Trade Exchange Use this code to make or collect payments to or from other corporate entities when you want to include more than one Addenda Record.  An Addenda Record is used to supply payment-related information to the receiving company; i.e. invoice information.
Unauthorized Returns Window 60 calendar days	Unauthorized Returns Window 24 hours (2 banking days)

• Printable ACH Entry Class Codes (PDF)
• Printable ACH Return Entries (PDF)

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Consumer Transactions — PPD

Use PPD for deposits and/or withdrawals to or from consumer accounts such as direct deposit of payroll, pension, dividends, or payment of utility bills, mortgages, rent, membership dues, loans and other recurring payments.

PPD	Prearranged Payment and Deposit Entry
Definition	An entry initiated by an Organization to a Consumer Account of a Receiver based on a standing or Single Entry authorization from a Receiver
Type of Entry	Single OR Recurring EntryCredit OR Debit Entry
Authorization Requirements	Authorizations must be readily identifiable as an authorization and: Have clear and readily understandable terms Provide that the Receiver may revoke the authorization only be notifying the Originator in the time and manner stated in the authorization Credit entries to Consumer accounts: Authorization is not required to be in writing Debit entries to Consumer accounts: Authorization must be in writing and signed or similarly authenticated Similarly authenticated: The standard permits signed, written authorizations to be provided electronically To satisfy requirements of Reg E and NACHA Operating Rules, the authentication process must evidence both the consumer’s identity and the assent to the authorization Electronic authorizations: Must be visually displayed in a manner than enables consumer to read the communication Writing and signature requirements are satisfied by compliance with the E-sign Act Electronic signatures include, but are not limited to digital signatures and security codes
Special Rules	Notice of change in dollar amount: If the amount of a debit Entry to a Consumer account differs from the amount of the immediately preceding debit Entry relating to the same authorization, or differs from a preauthorized amount, an Originator must send the Receiver written notification of the amount of the Entry The Originator must send this notice at least 10 calendar days prior to the date on which the entry is scheduled to be initiated Notice of change in scheduled debiting date: If the Originator changes the scheduled date on or after the entries are scheduled to be initiated to a Receiver’s account, the Originator must send the Receiver written notification of the new date. If the Originator must send this notice at least 7 calendar days before the first entry is scheduled to be debited to the Receiver’s account
Addenda Records	Addenda Records are OPTIONAL for PPD entries: Maximum number of Addenda records is one Used by Originator to supply additional information about the entry detail record Must contain payment-related information only — any other use is prohibited ANSI ASC X12 data segments or NACHA endorsed banking conventions (i.e. tax payment/child support)
Retention	Originator must retain the original or a copy of each authorization (signed, written or similarly authenticated) of a Receiver for 2 years from the termination or revocation of the authorization Upon receipt of an RDFI’s written request — ODFI must provide a copy at no charge within 10 banking days
Exception Return Reason Codes	R07 Authorization Revoked 60 calendar days Need Written Statement of Unauthorized Debit R08 Payment Stopped 24 hours R10 Customer Advises Not Authorized 60 calendar days Need Written Statement of Unauthorized Debit

• Printable ACH Entry Class Codes (PDF)
• Printable ACH Return Entries (PDF)

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Commercial Transactions

CCD CTX	Corporate Credit or Debit Corporate Trade Exchange
Definition	CCD: An entry initiated by an Organization to or from the account of that Organization or another Organization CTX: An entry originated by an Organization to ro from the account of that Organization or another Organization and accompanied by one or more Addenda Records
Type of Entry	Single OR Recurring EntryCredit OR Debit Entry May be non-monetary
Agreements	The Receiver has an agreement with the Originator under which the Receiver has agreed to be bound by the ACH Rules. This agreement is sometimes referred to as a Trading Partner Agreement. Both parties, Originator and Receiver, should retain a copy of this Agreement. An ODFI may request a copy of this agreement from the Originator.
Special Rules	CCD and CTX entries are contractually bound between two entities for transfer of funds to or from an account that is not primarily used for personal, family or household purposes. Return timeframes for unauthorized CCD and CTX entries are different than unauthorized consumer entry returns. Return timeframe for ALL CCD and CTX entries is 24-hours: Each Return Entry must be made available to the ODFI no later than the opening of business on the second banking day following the Settlement Date of the original entry. Exceptions to return timeframe for CCD and CTX entries: RDFI contacts ODFI, requests and receives Explicit Permission BEFORE returning outside the 24 hour return timeframe (see Return Reason Codes below).
Addenda Records	Addenda Records are OPTIONAL for CCD entries: Maximum number of Addenda records is one Addenda Records are OPTIONAL for CTX entries: Maximum number of Addenda records is up to 9,999 Addenda Records for both CCD and CTX: Used by Originator to supply additional information about the entry detail record. Commonly used for invoice information from company to company. Must contain payment-related information only — any other use is prohibited. ONLY — ANSI ASC X12 data segments or NACHA endorsed banking conventions (i.e. tax payment/child support). Upon request of the Receiver, an RDFI MUST provide to its Receiver all Payment Related Information contained within the Addenda record(s). Payment-related information MUST be provided within 2 banking days.
Specific Return Reason Codes	R08 Payment Stopped 24 hours. R29 Corporate Customer Advises Not Authorized 24 hours. No Written Statement of Unauthorized Debit needed R31  Permissible Return Entry (CCD & CTX only) No time limit — determined by the ODFI and RDFI. RDFI MUST request and receive explicit permission from ODFI BEFORE returning
Exception Return Reason Codes	R05 Unauthorized Debit to Consumer Account using Corporate SEC Code 60 calendar daysNeed Written Statement of Unauthorized Debit from receiver/account holder of consumer account. NOTE: Consumer Account as defined by Regulation E.

Abbreviations:

RDFI: Receiving Depository Financial Institution
ODFI: Originating Depository Financial Institution

• Printable ACH Entry Class Codes (PDF)
• Printable ACH Return Entries (PDF)

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Unauthorized return time limits

PPD transactions have a longer window for unauthorized returns than CCD and CTX transactions.

• CCD and CTX transactions have an unauthorized return time frame of 24 hours. There is one exception; the Receiver may receive permission from the Originator to return an unauthorized transaction.
• PPD transactions have an extended unauthorized return time frame of 60 calendar days.

As the Originator, if you are debiting a corporate customer’s account to collect payments, use the CCD or CTX SEC Code to limit your exposure to unauthorized returns.

If you use the wrong SEC Code (i.e. PPD), you expose your company to a longer unauthorized return window.  Even though you are debiting a corporate account, the return time frames are based on the SEC Code used. So, the corporate customer would have 60 days to return an unauthorized transaction versus the 24-hour time limit for CCD or CTX transactions.

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Correcting Mistakes or Duplicates

What happens if I find an error or duplicate ACH file?

Once an entry or file of entries has been transmitted in the ACH Network, it cannot be recalled; however, an erroneous or duplicate file can be reversed.  A reversal file should only reverse those batches that were duplicate or contained errors.

It’s the responsibility of the company who originated a duplicate or erroneous file to reverse the file.

How much Time do i have to Correct the error or duplicate?

Once you find an error or duplicate, transmit the file to Bank Midwest within 24 hours.

You only have 5 banking days after the Settlement Date to initiate a reversing file.

If a duplicate or error is discovered past the 5 day post-settlement date, please contact Business Support, 844.238.3838, for assistance.

What do I do differently for file origination?

You must enter the word, REVERSAL, in the field called “Batch Name.” If a reversal file is intended to reverse an erroneous file, initiate a corrected file as well. If the file is reversing a duplicate, no additional step is needed.

How does the receiver know there was an error?

You, as an Originator, must make a reasonable attempt to notify the Receiver of, and the reason for, the reversing entry no later than the Settlement Date of the reversing entry. How you reach out to the receiver is up to you — phone, email, etc. Use your best judgment.

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WEB Debits – Account Validation Requirement

Businesses that accept payments via a web portal and process the transactions via ACH will be required to implement account validation as part of a commercially reasonable fraudulent transaction detection system.

The new rule requires businesses to verify that the routing numbers and account numbers submitted for an ACH transaction are valid.

The ACH rules do not define ‘validate’ but NACHA has provided clarification of the meaning of ‘validate’:

At a minimum, the Originator must use a commercially reasonable means to determine that the account number to be used for the WEB debit is for a valid account – that is, that the account to be used is a legitimate, open account to which ACH entries may be posted at the [consumer’s bank].

This rule is intended to help reduce fraud and reduce the number of returns for invalid account numbers entered by the customer.

What does this mean for your business? If you accept ACH payments on your website and the customer manually enters their account and routing number you will need to have a method for verifying the account information before processing a payment.  If you rely on a software provider or shopping cart solution, the provider of that service must implement a solution to comply with the account validation rule.

What are your options for validating an account?

• Manual check: Usually requires a conference call between you, the customer, and their bank
• Micro deposits:–You or your system would make one or two small deposits into the customer’s account.–The customer then confirms the amounts deposited. Since these microdeposits are sent via ACH it could take 2-3 days for the customer to confirm. Customers often fail to complete the verification process.
• Prenotes:–Similar to microdeposits, however prenotes do not require the customer’s verification.–You, the originator would send a $0 transaction via ACH.–Must wait 2 banking days before initiating a live transaction to allow for return of entry.–Seldom used because some 3rd party processors don’t support them.
• Bank network database – commercially available account validation database service–Compares account and routing number information entered by the customer to a database of previously validated accounts.–This method is virtually instant, but not all customer accounts will be in the database
• Instant account verification–Uses application program interfaces (APIs) and a secure digital connection to banks to retrieve the account and routing number from the customer’s online banking interface.–This method is virtually instant; however, it requires the customer to share their online banking login credentials which they may not be willing to do.

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Same Day ACH

Having the flexibility to move funds faster is nice to have in your back pocket — just in case you need it. Access Same Day ACH through Cash Management with no additional fees. There are any number of reasons why you may need to move money faster including:

• Missed payroll
• Urgent payment requests
• Time-sensitive fund transfers

processing times

There are two processing windows for Same Day ACH transactions:

• Eligible payments initiated by 11 a.m. CT will be processed so payees receive funds by 5 p.m. that afternoon.
• Other eligible payments initiated by 1:30 p.m. CT will be posted no later than the end of the receiving bank’s processing day.

Transaction limitS

The limit for Same Day ACH transactions is $1,000,000 per transaction (this limit will not exceed or override your organization’s daily limit).

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Additional Resources

• ACH Originator Training Guide
• Detailed Banking and Cash Management User Guides
• ACH Debit Authorization Form (PDF)
• ACH Credit Authorization Form (PDF)
• Printable ACH Entry Class Codes (PDF)
• Printable ACH Return Entries (PDF)

Learn more about ACH payments at NACHA’s site: nacha.org

Access to the ACH Rule Book is online and free access is available to all Cash Management customers. Contact the Business Solutions Support team to request your credentials to log in for access to the most current ACH guidance and regulations.

 

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