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R20
ACH return codes identify the reason an ACH payment was returned by the recipient’s bank. They make it easier for originating and receiving financial institutions to spot and communicate payment failures.
What Is ACH Return Code R20?
ACH return codes are used to identify the reason an ACH payment has been returned by the recipient's bank. They make it easier for originating and receiving financial institutions to spot and communicate payment failures.
ACH Return Code R20, also known as "Non-Transaction Account," is a standard code used in Automated Clearing House (ACH) transactions. It indicates that the entry in the ACH file is being rejected because the receiving account is not a transaction account. Non-transaction accounts are typically accounts that do not allow electronic transactions, such as savings accounts or accounts with restrictions on electronic debits or credits.
How To Address ACH Return Code R20
Nacha prescribes separate rules for handling each return code since each one represents a unique scenario. ODFIs (Originating Depository Financial Institutions) and RDFIs (Receiving Depository Financial Institutions) are responsible for handling ACH return codes according to these rules.
For example, if your business is attempting to initiate an ACH debit for $100, but your customer’s bank account is a savings account that does not allow for debits, the bank would return the transaction with code R20. The RDFI must return the transaction with code R20 within 2 banking days.
If you encounter R20, the best course of action is to contact your customer to obtain information for a different account that you can charge or to request a different form of payment. .
What Is An ACH Return Code?
ACH return codes identify the reason an ACH payment was returned by the recipient's bank. They make it easier for originating and receiving financial institutions to spot and communicate payment failures. Each code begins with 'R' followed by a two digit number. ACH return codes are standardized and maintained by NACHA, the governing body for the ACH network.
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