Nacha WEB Debit Account Validation Rule

(content of email sent June 10, 2021)

To mitigate risks associated with online fraud and subsequent returned items, the Nacha Operating Rules now require all ACH Originators of WEB debit entries (ACH payments submitted via the internet or a mobile device) to use a “commercially reasonable fraudulent transaction detection system” to screen WEB debits for fraud.

The fraud detection standards for WEB debit entries went into effect March 19, 2021. However, due to COVID 19, the enforcement of the new rule has been extended by one year. Please be advised that all ACH WEB debit Originators must be compliant by March 19, 2022.

The most common acceptable methods of validation that Nacha recognizes as sufficient are:

  • Prenotes: A non-monetary entry that validates the account information prior to submitting a live transaction. Live transactions may be initiated as soon as the third banking day, pending no return received.
  • Micro-transactions: Very small dollar amount entries, typically just a few pennies. Customer action is required to verify the micro-transactions before a payment can be processed, pending no return received.
  • Commercial Validation Service: Real-time account validation utilizing a third-party vendor. No delay or customer action required prior to submitting a live transaction.

Here’s how TRX can help you become compliant

The first two options noted above are currently available through TRX. Both options require additional time and more enhanced merchant business logic before the payment can be successfully processed.

TRX is pleased to announce that we have partnered with MicroBilt, a Nacha Preferred Partner commercial validation service, to provide Real-Time Account Validation through our API Direct Integration, Hosted Pay Page and Virtual Terminal. This new service will be available late summer 2021-months ahead of the Nacha mandate enforcement. Real-time ACH account validation will not be limited to only WEB transactions but can also be used to verify account information on all other ACH SEC (Standard Entry Class) codes supported by TRX.

How Real-Time account validation benefits your business

  • Faster account validation
  • Enhances fraud protection
  • Reduces data entry errors
  • Reduces return fees
  • Reduces administrative costs of reacquiring your customer’s payment information
  • Improves Nacha compliance ratios, avoiding the risk of potential fines

Click here to learn more about Nacha’s fraud detection standards for WEB debits. Additional details on Real-Time account validation will be coming soon!