5 Tips to Prevent Returned Mobile ACH Payments

“Are you kidding me? Another returned mobile ACH payments notification? I am so sick of these notifications! I don’t even know what they are!” my friend said.

“Well, they mean that your payment has failed, and you need to try again,” I replied.

“I know that! But I don’t know why they keep failing in the first place!”

“Didn’t you pay attention to the ACH return code on your statement?”

“What’s that?”

“Oh boy, you are in for a treat! Here, I will share a link from iCheckGateway.com that clearly explains everything you need to know about these returned payments and how to avoid them.”

“Thank you!”


What is a Returned Mobile ACH Payment?

Returned mobile ACH payments, also popularly known as ACH rejections, denote a failed payment made on the ACH network. This notification usually appears on the bank statement of the entity (sender or receiver) that initiates the transaction. In an ACH debit transaction, the receiver of funds Receiving Depository Financial Institution (RDFI) gets this notification. The RDFI almost immediately informs the Originating Depository Financial Institution (ODFI), where the transaction originated in the first place, about the mishap.

Whenever the RDFI returns an ACH payment, the payment is accompanied by a return code notification. This return code denotes precisely the reason why a particular transaction failed. The most common ACH return codes include:

  • RA: Insufficient Funds
  • RC: Stop Payment
  • RE: Invalid Account Number

There are 70 different types of return codes. However, you will most likely encounter only a few of them while carrying out an ACH transaction. Here is a comprehensive list of the most common ACH return codes.

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What Happens if a Payment is Returned?

If an ACH transaction fails/returns, it is the job of the ODFI to initiate a new payment request. Depending on the type and code of ACH return, the ODFI may ask the originator to provide further information before processing the payment again. Apart from this, the ODFI penalizes the customer with an ACH return fee for submitting incorrect information or not having enough funds to process the payment.


What to do if a Payment is Returned?

As discussed, an ACH payment may fail due to several reasons. Sometimes it is the lack of due diligence, whereas other times, it is the bank’s fault for not processing the payment correctly. In either case, you can leverage this guide to process the rejected ACH payments again.


How to Prevent Returned ACH Payments?

You can take a few steps to handle returned mobile ACH payments and prevent the hassle of going through the money transfer process all over again. Here are a few tips on ensuring that your payment gets processed correctly through the ACH technology.

Tip #1: Double-Check all Information

One of the most popular reasons for an ACH payment failure is incorrect information. Financial institutions need accurate information to process the payments correctly. They do not assume or correct minor mistakes on your behalf. So, it is a good idea to double-check all the transaction details before trying to process an ACH payment.

Reverification of information can help you prevent mishaps in the first place. Some of the essential details that you must reverify include:

  • Bank Account Numbers
  • Routing Numbers
  • Signatures
  • Authorization Form Details

Learn how to process ACH payments.

Tip #2: Include a Processing and Handling Timeline in Your Sales Process

ACH payment solutions offer the lowest fraud rate. However, some people still leverage the relatively slower ACH network to commit fraud. Your customer may file a transaction and show you that they have processed the transaction. However, you should first wait for the transaction to be approved and transferred to your account before releasing the goods/services. You can account for the time lost for the ACH network to perform the transaction by including it in your sales process as a handling/processing time. If you do not trust your customer yet and they insist on getting the goods delivered quickly, you can ask them to process the funds via a wire transfer or credit cards instead of ACH payment solutions.

Moreover, you should ideally keep a copy of your customer’s payment authorization form handy in case they try to stop payment at a later stage. In such situations, the authorization form serves as a critical piece of evidence to settle any financial disputes.

Tip #3: Partner with a Reliable Payment Processor

Nacha-certified payment processors help you with much more than just your payment needs. They also help you set up your merchant account and offer analytics so that you can track your business growth easily. These payment processors keep track of your ACH returns and debit entries and notify you immediately so that you can get in touch with your customer to ask for alternative payment options.

Tip #4: Keep an Open Line of Communication with the Customer

Your customer needs to provide accurate information to carry out the ACH transactions with ease. You must contact your customer and ask for the correct details if a transaction fails due to an information mismatch. Keeping an open line of communication with your customer helps with faster dispute resolution.

Tip #5: Adopt Alternative Modes of Payment

You must try and process a failed ACH payment again only if you are 100% sure that you have the correct information. If you are unsure, it is good to ask for the payment through an alternative payment method. The best payment processors can offer you a one-stop payment processing solution and help you adopt both ACH and credit card payments on a single platform.


seamless hosted payment portal can help you increase customer satisfaction and reduce churn rates. It can also help you collect relevant customer information and prevent fraud. With advanced analytics and reporting features, third-party payment processors can also help you track your business growth over time. Want to learn more about the Automated Clearing House (ACH) network? Get in touch with our relationship managers to adopt innovative payment processing tech for your business.

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Date originally published: January 26, 2022


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