What is NACHA and how to fix it?

What is NACHA?

National Automated Clearing House Association - NACHA: is a non-profit membership association in charged of overseeing the Automated Clearing House (ACH) system, it operates the largest electronic payment network in the world. Through its supervisory and rule-making functions, NACHA provides the legal foundation for electronic payment systems to operate effectively, while working to update technologies and create new payment systems.

How do I fix it for our merchant?

Please do not submit ANY form or request to assess fees or refunds to any account which has been closed for "ACH NACHA Rejects" until the ABA/DDA information has been corrected. This includes but is not limited to ETF, refunds, debit requests for equipment fees, or back bill fees. All forms submitted on accounts closed for this reason will be returned to the requestor without being processed. 

ACH Reject Reason Codes R02, R03, R04, R29 – any merchant account that receives one of these ACH reject reason codes will be placed on a 77 day ACH funding delay (Days Hold) and the Adjustment flag and ACH Monthly flag will be turned off. After 30 calendar days, accounts which have not been updated will be closed. 

ACTION: Steps to be taken by client to resolve these items:    

Step 1: Upon receipt of the daily notification from the First Data RI Team, contact the merchant and advise that the ABA/DDA is closed (R02), incorrect (R03, R04), or that there is a debit block on the DDA account (R29).

Step 2: For all rejects, once the reject issue has been resolved send the NACHA form* with backup documentation to correct the account and update the flags.

* Forms are located on the MSC Portal (Omaha NACHA Update Request). 

Step 3: R29 Only-have the merchant immediately contact their financial institution to have the debit block lifted. If the bank requests the company ID number, contact your assigned Account Manager or see below for daily and monthly. It is required that you obtain written confirmation from the merchant on bank letterhead or email from the bank indicating the debit block has been removed and send that with the form to update the account flags. 

Step 4: If you are not updating the ABA/DDA information, it is required that you obtain a bank letter or email from the bank confirming that the current account on file is correct and will work to accept ACH transactions going forward. Send this documentation with the AIS form noted in step 2 or to your Service Team representative. 

Step 5: Once the account has been updated and notated, contact the Reserve Hotline at 1-877-261-9532 to have funds released***. If no update or verification of removal of the debit block has been done, the request will be rejected. 

Step 6: Regarding issues with release of reserves only, escalations can be directed to joy.chiofolo@firstdata.com. For all other escalations, please contact your Service Team Representative. 

Step 7: After 30 days, accounts which have not been updated and/or the block lifted will be closed. You will need to follow normal procedures to update and reinstate the account using the Reinstate and DDA change forms on the MSC Portal, not the NACHA Update form.

Step 8: When the account has been closed, follow the normal process and use the appropriate form to reinstate the front-end platform as well. 

***Funds are diverted unless the account is closed or the deposit flag is turned off, in which case funds will be sent to CARS automatically. This process is manual and can take 2-5 business days from the date of the reject for the funds to be received by the Reserve Hotline. Please watch the account(s) for notes stating the funds were sent to Collections before calling to release funds. 

Any other questions and/or concerns contact TouchSuite via email: support@touchsuite.com