According to independent research by Insider, global eCommerce sales will exceed $5 trillion for the first time in 2022. Online shopping has already become an inseparable part of a modern shopper’s life. Over the last two years, the COVID pandemic and the need for a contactless shopping experience further fueled the dependency on this shopping mode. With that in mind, merchants that offer online ACH as one of the payment methods should stay up to date with the latest WEB Entries (Internet Initiated/Mobile Entries) authorization rules. Nacha requires merchants to collect WEB authorization before accepting payments online over the ACH network.
What are WEB Entries?
Merchants selling goods/services on the internet and accepting payments via online ACH commonly use WEB authorizations/entries to collect customer transaction approval. WEB transaction is one of the four most popular ways for merchants to manage transaction approvals. The other three methods include:different types of authorization forms.
Elements of a WEB Authorization
WEB authorization supports both one-time and recurring payment transactions. Nacha requires all authorizations to have a clear and understandable language that customers can see on any visual display, such as a computer monitor, phone, tablet, notebook, etc.
A WEB entry should contain the following bare minimum details:
- Transaction amount
- Effective date for the transaction
- Routing and account numbers of the customer’s financial institution
- Method for the customer to revoke the authorization
Some other important details that the merchant should ideally include on the authorization:
- Sales details of the goods or services sold
- Date and timestamp of the customer login
- IP address of the customer
- One-time or recurring authorization type
Sample Authorization for One-Time Debit WEB Transaction
I authorize Merchant Name to debit the bank account indicated in this web form for the noted amount on today’s date. I understand that because this is an electronic transaction, these funds may be withdrawn from my account as soon as the above-noted transaction date. I will not dispute Merchant Name debiting my checking/savings account so long as the transaction corresponds to the terms indicated in this web form.
[Click to Authorize Payment]
Sample Authorization for Recurring Debit WEB Transaction
I authorize Merchant Name to debit the bank account indicated in this web form, for the noted amount starting on today’s date and for the schedule selected by me. I understand that because this is an electronic transaction, these funds may be withdrawn from my account as soon as the above-noted transaction date. I will not dispute Merchant Name debiting my checking/savings account so long as the transaction corresponds to the terms indicated in this web form.
[Click to Authorize Recurring Payment]
Other Important WEB Authorization Details
Additionally, we recommend that the merchant include the payment authorization language on the same page as the bank account information. This detail helps the consumer quickly identify the bank account for the final debit transaction.
Nacha recommends that all merchants keep authorization agreements for at least two years after the completion of the transaction. This agreement helps the merchant solve financial disputes if the customer’s bank requests proof of authorization for a specific transaction. Merchants should also add a clickable button stating that the customer agrees to the payment withdrawal once “clicked” to facilitate an easier online approval.
Date Originally Published: October 27, 2016
Date Updated: July 27, 2022
MORE TAGS:ACH Technology, Ecommerce, ACH Education, Understanding Codes, Merchants, Recurring Payments