Business owners that leverage the ACH network to make and collect payments need to manage authorizations from the receiver/sender. They usually collect these authorizations in one or more of the following ways:
Learn more about the different types of authorization forms.
CCD authorization is slightly different from the others. Merchants commonly use PPD, TEL, and WEB authorizations to carry out transactions with their consumers (a business-to-consumer transaction). However, the CCD authorization is used by merchants to authorize a business-to-business credit transaction, aka, cash concentration or disbursement.
What are CCD Entries?
A CCD authorization is a written form that authorizes a contracted merchant to conduct transactions with another business. Merchants collect CCD authorizations via writing, calling, faxing, or emailing.
Elements of a CCD Authorization
A CCD authorization document contains the following details:
- Business name
- Bank account information for both parties
- Consent to debit/credit the concerned accounts
- Contact information of both parties
- Type of transaction: Recurring or One-time
- Disclaimer statements to verify that the business owners have enabled ACH for their bank accounts and are accepting Nacha’s operating rules
Additionally, the form should also contain details of the method used to obtain the authorization for individual transactions. Nacha recommends that business owners keep authorization forms handy for up to two years after completion of the transaction.
Sample Authorization for All CCD Transactions
Important Inclusion for All CCD Transactions
I certify that I am an authorized representative of the company indicated above and that I have the authority to enter into this agreement on the company’s behalf.
The company understands that this authorization will remain in effect until it is canceled in writing and agrees to notify Company Name in writing at least 15 days in advance of any changes in its account information or termination of this authorization. Company Name understands that because these are electronic transactions, these funds may be withdrawn from its account as soon as the date an individual transaction is authorized and that it will have limited time to report and dispute errors.
In the case of an ACH Transaction being rejected for Non-Sufficient Funds (NSF) Company understands that Company Name may, at its discretion, attempt to process the charge again within 30 days and agrees to an additional $ XX amount charge for each attempt returned NSF which will be initiated as a separate transaction from the authorized payment. Company Name has certified that the above business bank account is enabled for ACH transactions and agrees to reimburse Merchant Name for all penalties and fees incurred as a result of Company Name’s bank rejecting ACH debits or credits as a result of the account not being properly configured for ACH transactions. Company Name acknowledges that the origination of ACH transactions to its account must comply with the provisions of U.S. law.
Sample Authorization for Overriding Agreements
This agreement governs ACH transactions initiated by authorize Merchant Name to credit or charge the authorize Company Name indicated below.
Both parties agree to be bound by NACHA Operating Rules as they pertain to all ACH transactions initiated by authorize Merchant Name that credit or debit the company bank account listed below, and acknowledge that the origination of ACH transactions to the listed account must comply with provisions of U.S. law.
This agreement provides authorization for individual or recurring CCD transactions to be initiated by Merchant Name when individually authorized using the methods designated below. This agreement will remain in effect until Company Name cancels it in writing.
Both parties agree that this agreement, in conjunction with any of the designated methods, constitutes authorization to debit Company Name’s business bank account, and Company Name agrees not to dispute any debits with its bank provided the transaction(s) correspond to the terms indicated in this agreement.
Sample Authorization for One-Time Transactions
Sign and complete this form to authorize Merchant Name to make a one-time ACH debit to your business bank account. By signing this form, you give us permission to debit your account for the amount indicated on or after the indicated date. This is permission for a single transaction only and does not provide authorization for any additional unrelated debits or credits to your account.
Agreement: Company Name authorizes Merchant Name to charge its business bank account indicated below for $ XX amount on or after date.
Sample Authorization for Fixed Recurring Transactions
Agreement: Company Name authorizes Merchant Name to charge its business bank account indicated below for $XX amount on the day or date of each frequency.
Sample Authorization for Variable Recurring Transactions
Agreement: Company Name authorizes Merchant Name to debit the bank account indicated below on the day or date of each frequency. Company Name understands that it will only receive advanced notice of the charge if it exceeds $XX amount.
Sample Authorization for Transactions with a Set Payment Schedule
Agreement: Company Name authorizes Merchant Name to charge the account indicated below to discharge the above debt using installment payments in the amount and schedule indicated.
Date Originally Published: February 15, 2017
Date Updated: July 27, 2022
MORE TAGS:Ecommerce, Payment Processing, ACH Education, Payments Education, Understanding Codes, Merchants, Independent Sales Organizations, Recurring Payments