ACH Direct Debit

ACH Direct Debit is a popular payment method used in the United States and Puerto Rico as an alternative to credit and debit cards. The payments are processed via the Automated Clearing House (ACH), which is an electronic network for processing financial transactions.

To accept ACH Direct Debit payments, you must have a registered business entity in the United States.

The ACH network is unable to provide real-time authorizations. This means there is a risk of transactions being reversed if, for example, the bank account has insufficient funds. Additionally, the shopper can initiate a chargeback up to 60 days from the initial date of the direct debit payment.

Payment type	Payment flow	Countries	Currencies	Recurring	Refunds	Partial refunds	Multiple partial refunds	Separate captures	Partial captures	Multiple partial captures	Chargebacks
Direct Debit	Direct	PR, US	USD

Account validation

When accepting ACH Direct Debit payments, we recommend verifying the shopper's bank account if that is a consumer account. See Nacha for more information.

If you have an API-only integration, you can do this verification as follows:

1. Collect the shopper's bank account number, bank routing number, and account holder name.
2. Before initiating the payment, pass these details in a zero-value authorization request.

We then validate the account through the gVERIFY solution from giact.

ACH Company ID for B2B payments

An ACH Company ID identifies an entity like Adyen that collects payments through the ACH network. Unknown entities are often blocked when they collect payments from business accounts. The transaction will result in a chargeback with reason code R29, Corporate customer advises not authorized.

To prevent unnecessary chargebacks of business-to-business (B2B) transactions, ensure your business customers instruct their bank to add Adyen's ACH Company ID 8263863381 to the list of entities that are allowed to debit or credit their business account.

SEC code and authorization requirements

To avoid chargebacks and to comply with Nacha's rules, ACH payments must include a Standard Entry Class (SEC) code.

We support the following SEC codes:

• CCD: This stands for Corporate Credit or Debit and indicates a single or recurring payment involving a corporate account. In other words, this indicates a business-to-business transaction.
• PPD: This stands for Prearranged Payment or Deposit and indicates a single or recurring payment involving a consumer account.

If you do not specify an SEC code, we will use CCD.

To specify an SEC code for your ACH Direct Debit payments, you can:

• Ask our Support Team to configure a default SEC code for all your ACH Direct Debit payments.

• Specify the SEC code in your ACH Direct Debit payment request using the additionalData field ach.secCode. You can do that for each request, or only when you want to override the default SEC code that is set for your account.

Mandate

In addition to specifying an SEC code, it is required that you have a mandate from the customer before initiating a single or recurring transaction. A mandate is an authorization form that specifies, among other things, the bank account; the type, frequency, and amount of the transaction; and information about how the customer can revoke the authorization. The authorization form must be (electronically) signed by the customer. As an example, Nacha provides a sample authorization form.

Chargebacks

The ACH network is unable to provide real-time authorizations. This means that a payment can be reversed because of insufficient funds after the payment is authorized. Other reasons why ACH Direct Debit payments are reversed include:

• Business-to-business transactions can be reversed if your customer's business account does not have Adyen's ACH Company ID in their allowlist.
• Customers have the right to ask for a refund up to 60 days after the payment is settled to your account.

If an ACH Direct Debit payment is reversed, your Settlement details report shows a credit and a corresponding debit, and you receive a CHARGEBACK webhook with a chargebackReasonCode.

You cannot defend ACH Direct Debit chargebacks. Depending on the reason code, it may be allowed to retry the payment. For an overview of the chargeback process, reason codes, and how to test chargeback scenarios, see ACH Direct Debit chargebacks.

How do you want to integrate?

Web

Use our pre-built UI solutions to add ACH Direct Debit to your website.

API only

Build your own UI for ACH Direct Debit in your website, iOS, or Android app.

Validation with giact

Add account validation through giact gVERIFY to your ACH Direct Debit API only integration.

Pay by Link

Add ACH Direct Debit to your payment methods, and use Pay by Link to accept payments.