eCheck Authorization Process: WEB Transactions

Accepting eCheck transactions is a cost effective way to boost profitability for your organization and offers an easy way for your constituents or customers to financially impact your organization. Knowing your role and what your requirements are within the ACH ecosystem is important to your continued success.

When your organization agrees to accept eCheck transactions as a method of payment, you effectively become an Originator and agree to be bound by the Rules and Regulations of NACHA (National Automated Clearing House Association), or the Rules.  As an Originator, it is your responsibility to obtain proper authorization for all transactions processed and be able to furnish proof when requested. The purpose of this post is to provide you with standard guidelines for eCheck transactions submitted through a webpage or mobile form, also known as: WEB transactions. Next post, we will discuss the guidelines if you, the Originator, enter a transaction.

What are WEB Transactions?

Transactions that are initiated by the account holder, or the Receiver, through the Internet or mobile device are known as WEB transactions. These are the transactions that are entered through your giving page, registration page, or payment form and must be submitted by the accountholder themselves.

Authorization Process

The accountholder goes to a webpage and enters in their contact information. They specify the amount of money they wish to have debited from their account (one-time or recurring) as well as where they designate your organization to apply those funds. They enter their account and routing number and submit their transaction. They then review the information for accuracy and authorize the transaction by agreeing to authorization language (“I authorize [Organization Name] to debit my account”).  The authorization language should also include information about how to request a refund or go about revoking authorization.

Proof of Authorization

There are several options available to provide proof of authorization for a WEB transaction. The easiest way is to take a screenshot of the authorization language the accountholder would have agreed to. Then provide documentation that shows transaction details including customer information and sales documentation to show what goods and/or services were rendered. It is important to demonstrate the processes that were used to authenticate both the accountholder’s identity and the authorization.

For example: if you are using a donation system such as DonateQ and receive a request to provide proof of authorization for an eCheck transaction processed seven months ago, you would start by going to your donation page. From there you would scroll to the bottom where the authorization language is found on your site and take a quick screenshot of the verbiage found there. Then you would login to your donation system and find the transaction that was processed. Print off the details of that transaction including the date the transaction was processed, the contact information entered by the accountholder, the amount of the transaction and any comments or categories specified. This will be the supporting documentation to provide as proof of authorization and authentication.

You are required to furnish proof of this authorization and authentication process, if requested, for  two years after termination or revocation of the transaction.

Processing eCheck transactions is a reliable and cost effective way of contributing to your organization’s bottom line. As an originator, you agree to be bound by the Rules established by NACHA. Knowing and understanding your requirements is important to protecting your organization from potential fines incurred as a result of unknowingly committing rule violations, as well as doing your part to maintain the integrity of the ACH payment system. If you have further questions regarding NACHA, please visit NACHA’s official website by clicking here. For access to the Rules in their entirety and to purchase a copy of this year’s Rule book, you may click here.