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SEC Codes

Definition
Resources

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 Code Title Transaction Type Account Type Agreement 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
CCD Corporate 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
COR Notification 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 Consumer N/A
ENR Automated Enrollment Entry Non-Monetary Non-Consumer (Federal Govt. Agency) Request by Receiver / RDFI Use Only
IAT International 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)
MTE Machine Transfer Entry Credit or Debit Single Entry Consumer Authorization: In writing and signed, or similarly authenticated
POP Point of Purchase Entry Debit Single Entry Consumer or Non-Consumer Agreement: Posted Notice and in writing and signed, or similarly authenticated
POS Point 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 Consumer Authorization: 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
TEL Telephone-Initiated Entry Debit Single Entry or Recurring Entry Consumer Authorization: Orally authorized over telephone
TRC Truncated Entry Debit Single Entry Consumer or Non-Consumer Agreement: ODFI and RDFI
TRX Truncated Entry Exchange Debit Single Entry Consumer or Non-Consumer Agreement: ODFI and RDFI
WEB Internet 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)
XCK Destroyed Check Entry Debit Consumer 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.



We simplify using the correct SEC codes when making an ACH payment

Modern Treasury is a payment operations platform built for the entire cycle of money movement. Our APIs and software applications directly integrate with your bank accounts, allowing you to process payments using ACH, RTP, Wires, and multiple other payment methods 2x faster than your existing solution. Modern Treasury automates payment reconciliation and accounting, giving you back time and control over your payment operations.

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Pranav Deshpande
Written by:
Pranav Deshpande
Last updated:
May 5, 2022
Last updated:
May 5, 2022

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