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SEC Codes

An SEC code is a three letter code that describes how a payment was authorized by the consumer or business receiving an ACH transaction. SEC stands for 'Standard Entry Class'. SEC codes are defined and maintained by NACHA, the governing body for the ACH network.

For example, the recurring ACH debit for your monthly utility bill will use the SEC code PPD which stands for 'Prearranged Payment and Deposit Entry' when the utility company debits money from your account. Some banks will also include this code on the transaction entry in your bank statement. 

It is mandatory for all ACH payments to include a SEC code. Both ACH credits and ACH debits must have a SEC code. Since they tend to be specific to a particular use case, most companies will only use a few different SEC codes in their payments.

SEC codes don’t have anything to do with the Securities and Exchange Commission, the three letter agency most often associated with this acronym.

How do SEC Codes work in practice?

It is the responsibility of the Originating Depository Financial Institution or ODFI to include the correct SEC code in the ACH payment. SEC codes are attached to the ACH payment request since they are a part of the NACHA file format.

It is also the responsibility of the business using the ODFI for ACH, also known as the Originator, to have the proper authorization in place from the Receiver. The nature of this authorization depends on the SEC code and whether funds are being debited or credited. For example:

  • Most ACH debits require written authorization from the recipient while most ACH credits do not.
  • Debits authorized on a phone call need to use the SEC code TEL and require the company originating the payment maintain a recording of the customer's verbal authorization. Alternatively, they need to follow up with the customer for a written confirmation of the authorization before initiating the payment.

Including the incorrect SEC code could result in an ACH Return. The ODFI is then responsible for any return fees and resubmitting the payment with the correct code.

SEC Codes

NACHA currently allows 13 SEC codes on ACH payments. Note that some codes can be used either for ACH credits and debits, while others can only be used for one. Similarly, certain codes can be used for both one-time and recurring payments while others can only be used for one-time payment authorization. Certain SEC codes can only be used for consumer or retail transactions, while others are reserved for business and government transactions. You will also notice that certain codes like WEB (for online authorizations) and TEL (for phone authorizations) describe where the transaction was authorized.

SEC CodeTitleTransaction TypeAccount TypeAgreement or Authorization
ACK ACH Payment Acknowledge Non-Monetary (Acknowledges CCD Credit Entry) N/A N/A
ADV Automated Accounting Advice Non-Monetary N/A Agreement: ODFI/RDFI and ACH Operator
ARC Accounts Receivable Entry Debit Single Entry Consumer or Non-Consumer Authorization: Written Notice
ATX Financial EDI Acknowledgment Non-Monetary (Acknowledges CTX Credit Entry) N/A N/A
BOC Back Office Conversion Entry Debit Single Entry Consumer or Non-Consumer Authorization: Posted Notice and Written Notice
CCDCorporate Credit or Debit Entry Credit or Debit Single Entry or Recurring Entry Non-Consumer Agreement: Originator and Receiver
CIE Customer Initiated Entry Credit Single Entry Consumer Originated Agreement: Originator and Receiver
CORNotification of Change, or Refused Notification of Change Non-Monetary Consumer or Non-Consumer N/A
CTX Corporate Trade Exchange Credit or Debit Single Entry or Recurring Entry Non-Consumer Agreement: Originator and Receiver
DNE (Federal Govt. Agency Use Only) Death Notification Entry Non-Monetary ConsumerN/A
ENRAutomated Enrollment Entry cNon-Monetary Non-Consumer (Federal Govt. Agency) Request by Receiver / RDFI Use Only
IATInternational ACH Transaction Credit or Debit Single Entry or Recurring Entry Consumer or Non-Consumer Agreement: Originator and Receiver (Corporate); Authorization: In writing and signed, or similarly authenticated (Consumer Debit); Authorization: Orally or other non-written means (Consumer Credit)
MTEMachine Transfer Entry Credit or Debit Single Entry ConsumerAuthorization: In writing and signed, or similarly authenticated
POPPoint of Purchase Entry Debit Single Entry Consumer or Non-Consumer Agreement: Posted Notice and in writing and signed, or similarly authenticated
POSPoint of Sale Entry Credit or Debit Single Entry Consumer Agreement: In writing and signed, or similarly authenticated
PPD Prearranged Payment and Deposit Credit or Debit Single Entry or Recurring Entry ConsumerAuthorization: In writing and signed, or similarly authenticated (Consumer Debit); Authorization: Orally or other non-written means (Consumer Credit)
RCK Re-presented Check Entry Debit Single Entry Consumer Authorization: Posted Notice
SHR Shared Network Transaction Credit or Debit Single Entry Consumer Agreement: ODFI and RDFI
TELTelephone-Initiated Entry Debit Single Entry or Recurring Entry ConsumerAuthorization: Orally authorized over telephone
TRCTruncated Entry Debit Single Entry Consumer or Non-Consumer Agreement: ODFI and RDFI
TRXTruncated Entry Exchange Debit Single Entry Consumer or Non-Consumer Agreement: ODFI and RDFI
WEBInternet Initiated/Mobile Entry Debit or Consumer to Consumer Credit Single Entry, or Recurring Entry Consumer Authorization: In writing and signed, or similarly authenticated (Debit WEB entries)
XCKDestroyed Check Entry DebitConsumer or Non-Consumer N/A

Modern Treasury currently lets you use 6 SEC codes — PPD, CCD, CTX, IAT, CIE and WEB when making payments. If you don't specify a code, we will default to using PPD if the recipient is an individual. If the recipient is a business, we will default to using CCD.

ACH

ACH (Automated Clearing House) is a payment processing network that’s used to send money electronically between banks in the United States.

  1. 1ACH API
  2. 2What is ACH?
  3. 3What is an ACH Prenote?
  4. 4ACH Reversals
  5. 5ACH Return Codes
  6. 6ACH Payment Returns
  7. 7SEC Codes
  8. 8What is Same-Day ACH?
  9. 9ACH Notification of Change (NOC)
  10. 10FedACH
  11. 11ACH Credit
  12. 12ACH Debit