New ACH Rules


If your company uses ACH (Automated Clearing House) to bill your customers, it's crucial to prepare for the upcoming changes to NACHA regulations. The association plans to cut its unauthorized return rate threshold in half, lowering the limit to 0.5 percent on September 18, 2015.  The new rules will also establish a process to monitor and evaluate “administrative” return rates that exceed 3% for returns marked as Account Closed, Unable to Locate Account, and invalid account structure. NACHA will also be monitoring overall return rates levels that exceed 15% (excluding RCK entries).  This means that your business could face an inquiry and penalties if your return rates exceed the new standards.  


Although companies don't incur immediate fines when they exceed the threshold, these violations trigger a NACHA review. The organization evaluates a firm's business practices and takes a range of factors into consideration, such as consumer complaints and recent lawsuits. If it decides to impose penalties, the consequences range from fines to expulsion from the network. Companies with high return rates may lose the ability to accept ACH payments.


The good news is that business owners can avoid unsuccessful transactions by using a funds confirmation solution. This allows you to instantly determine if a customer's account contains adequate cash for a specific payment. When you know that a client has insufficient funds, you'll have a chance to cancel the transaction before it affects your overall return rate. This also prevents you from supplying products or services without being paid.


An ACH verification system provides valuable customer details that can help you avoid many types of returns including fraudulent transactions. It will warn you if a buyer's bank account has been frozen, exhibits a high return rate or repeatedly submits payments with insufficient funding. An identity authentication service can also deliver great benefits. It will rapidly confirm a customer's personal details and ensure that he or she has permission to use a particular account.


Although it expects all ACH users to benefit from the new rule, NACHA acknowledges that some returns are unavoidable. Automated recovery services provide a fast, simple way to re-present payments that have previously failed. They can electronically recover both ACH and check transactions; there's no need for customers to initiate new transfers. Fortunately, NACHA will exclude a re-presentment from your return rate if it specifies the same amount of money as the returned item.

Choosing a Solution

Automated confirmation, authentication and recovery services can help businesses avoid NACHA fines and fraudulent transactions. When choosing a provider, look for a solution that has the greatest coverage and the most current data. Insist on an easy to use interface or integration path. Be wary of large setup fees and minimums. You should be able to try the solution for a reasonable period of time to make sure you are comfortable with the results and are confident that you have a long-term partner.

What if accepting ACH payments could be as easy as accepting credit or debit cards?  GIACT can make that happen and your customers will love you for it. Let us help you design the right solution and offer you a free evaluation. There's no reason not to give it a try. To learn more, please contact us online or call 866-918-2409.