Why ACH returns are important in payment processing
ACH stands for Automated Clearing House – a nationwide fund transferring network. Inter-bank transfers happen through an ACH operator – a Federal Reserve Bank or a private organization used as the central clearing facility. Without a thorough understanding of the full ACH payment processing cycle, people often concentrate on the initial phase which includes processing and funding. Just like in the case of credit card transactions, ACH transaction approval is not the concluding phase of the processing cycle. To understand the full lifespan of ACH transactions, one needs to devote special attention to ACH returns.
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An ACH (Automated Clearing House) Return is essentially a bounced eCheck payment.
The ACH return is a reject generated by the receiving depository financial institution (RDFI) in response to an ACH transaction, requiring money transfer, because it cannot be processed. The most common reasons (return codes) behind this include:
- Insufficient Funds
- Account Closed
- Invalid Account Number
ACH Fraud Prevention Services
The most common services used by merchants against consumer fraud include:
- Geo-Location Verification: IP-address-based filtering of accounts (if an account comes from a high-risk geographical location, the transaction is not processed).
- Identity Verification: Against various blacklists (blacklists feature e-mails, addresses of potential fraudsters; if an account is on some blacklist, the transaction is declined, and there is no need for further time-consuming verification process).
- Check Verification: An ACH transaction is, in fact, an electronic check. Check verification services include verification of the bank routing number as eligible, as well as routing number status checks; with access to a list of all associated bank names with branch type.
- Bank Account Verification Business Rules: This verification service can be implemented as an optional layer of security.
Output parameters and individual business rules are at your disposal, designed to adapt to your specific business needs.
Your group has complete flexibility for Bank Account Verification rules customization and changes take effect immediately.
Our Acuitytec’s hands-on Risk Management Team is available to assist you in optimizing the risk rules.
Verify users with the most efficient and reliable Bank Account Verification technology services.
- Reduce your risk of returns for ACH items
- Accurate information based on daily database updates
- Includes all U.S. banks and credit unions
- Minimize customer interaction
- Maximize your matches and reduce your risk of consumer fraud
- Comprehensive match information—not just a score
- Affordable pricing options to meet your needs
- Increase revenue by reducing operational costs
Verify bank routing numbers in real-time and easily locate associated bank details.
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