Executive Briefing: Demystifying ACH Returns

Actionable steps to help you lower ACH Returns, mitigate return risks, and thwart fraudulent transactions and bad actors.

For the uninitiated, money movement seems simple. There is the apparent ease at which mobile apps and financial institutions can move money in today’s instant manifestation of transacting. Beneath and behind the screen on one’s mobile device or laptop, however, live multiple elements [MB1] that enabled such movement of money. Inherent in all money movement is a risk that a transaction will be returned as ‘insufficient funds’ ‘unauthorized,’ ‘unknown account’ or ‘account closed’ The risk of returns of ACH transactions is segmented into three distinct categories: Administrative, Unauthorized and Overall Return Rate. Within these categories, Nacha has established thresholds; Administrative Returns 3%, Unauthorized Returns 0.5%, and Overall Return Rate 15%. For further details please see https://www.nacha.org/rules/ach-network-risk-and-enforcement-topics.

At Serio Payments Consulting (SPC) we believe in demystifying ACH Returns by introducing tested and successful methodologies that will help you build out a set of controls designed to reduce your overall risk of returns. Establishing the following building blocks are key to successfully navigating ACH transactions: 1) client education, 2) understanding the funds flow and what they are looking to accomplish, 3) examining any programmatic controls in place, and 4) - most importantly - ensuring Originator’s understand Nacha’s Operating Rules & Guidelines.

Implementing these four steps has in our experience helped lower the risk of returns:

• Require balance checks on all debits, set an additional thresholds 1.5%-5%
• Develop velocity Controls
• Set transaction limits; debit attempts per 24 hours and set dollar limits
• Establish Fraud Protocols

Of course, the best way to see these building blocks manifest would be to hear and see the direct results of our clients’ actions and hear from them how our sound methodologies helped them succeed.

​Upcoming webinar to learn from others:
We will be developing case studies and inviting industry leaders in the payments space to share their experiences and customer success stories.
For questions related to this online seminar, contact Anthony Serio, CEO, at [email protected]