How Many Times Can a Company Retry an ACH Payment?

As Automated Clearing House (ACH) payments become more common, more merchants and their clients choose ACH transactions. The popularity of ACH has led to more austere measures and rules to protect customers from losing money during online ACH payment processing.

One of those rules relates to retrying failed ACH payments, which you’re allowed to do. How many times can a company retry an ACH payment? According to ACH network rules, you have two more chances to collect your payment. The validity of the authorization determines this.

So, the other important question you have to address is: How long is an ACH authorization valid? Once you understand this, you’ll know when to retry your rejected ACH payments. This article explains why, how, and when to retry an ACH payment.

Why Your ACH Payment May Be Rejected               

First, understand that ACH transactions are more like physical checks, which aren’t approved immediately. This is also the main difference between ACH payment and wire transfer–your ACH payments can be rejected just like bounced checks.

Unfortunately, this rejection can leave you with expensive write-offs if you don’t act immediately. The ACH network you use to debit your client’s bank account will provide you with a status code when a payment has been rejected.

Therefore, you should understand why your payment has been rejected and take the appropriate action to collect your funds as soon as possible. 

Here are the main reasons why your ACH payment may be rejected.

R01: Insufficient Funds

This is the code your ACH network will send you if your client’s bank account doesn’t have sufficient funds to complete the transaction. When this happens, you can retry the payment two more times within one month of the initial ACH authorization.

With an ACH payment processing platform like Seamless Chex, you can configure your bank account to retry automatically rejected payments without violating ACH resubmission rules. Alternatively, you can agree with your client on the appropriate date of re-submission of payment. You can even ask them to send you the funds through other forms of payment, especially if you need the funds urgently.

R02: Bank Account Closed

This payment rejection code means the bank account you’re trying to debit has been closed. Unfortunately, this also implies you can’t clear the current and future payments using this account. The only solution is to contact your client and request them to send you the funds through another payment method or link the ACH payment to their latest bank account.

R03: No Bank Account

Your ACH will be rejected if your ACH payment processor can’t locate your client’s bank account. This can happen when you enter the wrong routing number or bank account number of your client. It also occurs when the routing number you enter fails to match the provided bank account or the customer’s details.

Sometimes, this may be caused by a simple, innocent typo or deliberate misinformation by your client. This is why you should double-check your client’s bank details and routing number before you initiate an ACH payment. In addition, it’s advisable to contact your client to confirm the payment details before processing the payment.

R20: Non-Transaction Account

This payment rejection code means the bank account won’t accept ACH payments. You can ask your client to set up a new bank account that accepts ACH payments.

ACH rules stipulate that when you request an ACH payment from your client’s bank account and your payment is rejected due to insufficient or uncollected funds, you can retry the payment two more times. But you have to retry this payment within 180 days from the settlement date of the initial entry.

Lastly, if you’re looking for a reputable ACH processing partner for your business, try Seamless Chex. Here, you can send and receive ACH payments through email or text!

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