In the previous blog on ACH Payment Gateway SEC Codes, we answered the following questions:
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What are ACH Standard Entry Class Codes?
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What do SEC codes tell you?
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The Security Aspect of SEC Codes
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The 4 Most Popular ACH Standard Entry Class Codes
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A Checklist for the Authorization of Transfer of Funds
Banks should educate their commercial clients on these other vital ACH payment gateway codes for efficient day-to-day operations. As a recap of the previous blog, an SEC code is a 3-letter string of characters that helps you identify the type of ACH products/applications related to a particular transaction/entry/item. This code gives you the following information:
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Type of item/entry
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Nature of item/entry
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Availability of addenda records with the entry
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Type of process used for authorization
The Top 5 ACH Payment Gateway Codes
CCD: Corporate Credit/Debit Entry
The CCD SEC code talks about a payment format that denotes a funds transfer between two corporations/businesses. It is also used to identify intra-company transfers.
- Account: Non-consumer (Business only)
- Market Type: Retail, Phone Order, eCommerce, and Mail Order
- Transaction Type: Single or Recurring
- Credit/Debit: Both
CTX: Corporate Trade Exchange
The CTX SEC code is similar to the CCD payment format and denotes a funds transfer between two businesses or government entities. However, the major difference between them is that CCD supports only one addenda record, whereas CTX supports (and usually requires) multiple. CTX entries support up to 9,999 addenda records.
- Account: Non-consumer (Business only)
- Market Type: Retail
- Transaction Type: Single or Recurring
- Credit/Debit: Both
WEB: Internet-Initiated Entry
The WEB SEC code is one of the most-used payment formats on the ACH network. WEB debits are internet-initiated ACH transactions where money is pulled from a consumer bank account using authorization given via the internet or wireless network.
- Account: Consumer
- Market Type: eCommerce
- Transaction Type: Single or Recurring
- Credit/Debit: Both
TEL: Telephone-Initiated Entry
The TEL SEC code is another one of the top four popular payment formats on the ACH networks. This code denotes that the authorization required to carry out the ACH transaction was collected orally via telephone. Learn more about the different types of ACH authorizations.
- Account: Consumer
- Market Type: Phone Order
- Transaction Type: Single or Recurring
- Credit/Debit: Both
PPD: Prearranged Payment and Deposit Entry
When a consumer signs a paper-based authorization form at the ACH operator’s office to carry out the transaction, it is complemented by a PPD SEC code. Some popular fund transfers that are commonly carried out via PPD include loan payments, utility bill payments, insurance payments, etc. Even recurring payments like payroll processing usually carry the PPD SEC code.
- Account: Consumer
- Market Type: Mail Order and Retail
- Transaction Type: Single or Recurring
- Credit/Debit: Both
Other Important ACH Payment Codes
CIE: Customer-Initiated Entry
The CIE SEC code describes the transaction where a consumer pays an organization. It is the code usually associated with bill payments. So you can expect to see this code on your bank statement if you use recurring ACH payments to pay your energy and water bills.
- Account: Consumer
- Transaction Type: Single only
- Credit/Debit: Credit only
POS/POP: Point-of-Sale/Purchase Entry
The POP SEC code represents a transaction made by a consumer at the point of purchase. In such transactions, the merchant usually processes and voids the paper check in real-time to return it to the consumer. If you use paper checks to pay for groceries or shopping, you can expect to see such codes on your bank statements. Merchants that want to process checks in real-time to prevent fraudulent chargebacks should adopt check verification tools.
- Account: Consumer or Non-Consumer
- Market Type: Retail
- Transaction Type: Single only
- Credit/Debit: Debit only
RCK: Re-Presented Check Entry
RCK SEC code denotes a check that was submitted again electronically for consideration. This code means that the check was returned to the owner the first time, because of insufficient or uncollected funds, with the need to pay additional NSF fees. Learn more about NSF fees and how to avoid them.
- Account: Consumer
- Market Type: Retail and Mail Order
- Transaction Type: Single only
- Credit/Debit: Debit only
SHR: Shared Network Entry
The SHR code denotes a transaction between the ODFI (Originating Depository Financial Institution) and RDFI (Receiving Depository Financial Institution) using an access device like a plastic card. It means accessing the transfer network via debit card or credit card payments.
- Account: Consumer
- Transaction Type: Single only
- Credit/Debit: Debit only
MTE: Machine Transfer Entry
MTE code denotes funds transfer via electronic terminals protected by PIN security. For example, debit and credit card processing at ATM terminals to withdraw/deposit cash.
- Account: Consumer
- Transaction Type: Single only
- Credit/Debit: Both
XCK: Destroyed Check Entry
The XCK code denotes that a bank created or collected an ACH payment via a destroyed/lost check. Unlike most other codes on this list, XCK is available only to banks since no merchant services are authorized to process these checks correctly. A destroyed check is defined as a check that is damaged so bad that its image cannot be processed normally.
- Account: Consumer or Non-Consumer
- Transaction Type: Single only
- Credit/Debit: Debit only
IAT: International ACH Transaction
The IAT SEC code denotes an International ACH transaction for which the financial institution that accepts ACH payments is not based under U.S. jurisdiction. ACH transfers over international borders are rare, and most individuals use wire transfers to send money internationally. Learn more about International ACH transactions.
- Account: Consumer or Non-Consumer
- Transaction Type: Single or Recurring
- Credit/Debit: Both
COR: Notification of Change or Refused Notification of Change
This code denotes NOC or a refused NOC (Notification of Change) for a particular transaction. The RDFI/ODFI (depending on the type of transaction) informs the originator of incorrect information like a bank account or a routing number submitted for an entry. A financial institution cannot process an ACH transfer without the correct information.
- Account: Consumer or Non-Consumer
- Transaction Type: Non-Monetary
- Credit/Debit: N/A
DNE: Death Notification Entry
The DNE code suggests a non-monetary entry from the Fed. It is used to notify the financial institution that the recipient of a government benefit, like a pension, has passed away.
- Account: Consumer
- Transaction Type: Non-Monetary
- Credit/Debit: N/A
ENR: Automated Enrollment Entry
The ENR code is an informative, non-monetary code used to denote a transfer of information from the depository financial institution to the government agency (Fed). This code essentially enrolls an individual for Fed ACH credit or debit activities.
- Account: Non-Consumer (Federal Government Agency Transfers)
- Transaction Type: Non-Monetary
- Credit/Debit: N/A
TRC: Truncated Entry
This code denotes a single entry debit-only type of transaction with a single check drawn on the paying bank.
- Account: Consumer or Non-Consumer
- Transaction Type: Single only
- Credit/Debit: Debit only
TRX: Truncated Entries Exchange
This code is the same as TRC with one key difference. Instead of a single check, this code denotes multiple checks drawn on the same paying bank.
- Account: Consumer or Non-Consumer
- Transaction Type: Single only
- Credit/Debit: Debit only
ACK: Acknowledgment Entries
The ACK code goes hand in hand with the CCD code and denotes acknowledgment of receipt by the RDFI.
- Account: Non-Consumer
- Transaction Type: Non-Monetary
- Credit/Debit: N/A
ATX: Financial EDI Acknowledgment
Like ACK that goes with CCD, the ATX code goes with ACH payment processing carried out by the CTX code. It also is used to denote acknowledgment of receipt by the RDFI.
- Account: Non-Consumer
- Transaction Type: Non-Monetary
- Credit/Debit: N/A
ADV: Automated Accounting Advice Entry
The ADV code is usually sent by the ACH operator to advise the accounting information in a machine-readable format.
- Account: Consumer or Non-Consumer
- Transaction Type: Non-Monetary
- Credit/Debit: N/A
Conclusion
Understanding the different SEC codes on the ACH network helps commercial clients understand their bank statements correctly. They also help the finance team make necessary changes and reprocess the fund transfers as needed. Large commercial organizations should ideally have multiple payment methods like wire, ACH, and credit card payments to process their transactions seamlessly. For example,
- ACH payments work best for automated recurring billing
- Credit card payments work well for instant transactions
- Wire transfer is the best option for international money transfers
While setting up a new merchant account, commercial clients should partner with financial institutions that have the necessary technology to handle large transaction volumes. Moreover, the best financial institutions go one step forward and partner with reliable ACH payment gateway providers to offer advanced solutions like SMS payments, IVR payments, Email invoicing, and more.
If you are a financial institution that deals with commercial clients and wants to leverage the latest (and most secure) payment solutions reach out to us today. Schedule a call with one of our financial experts to the payment needs of your large commercial clients here.