NACHA Rule Change

March 2014: Person-to-Person ACH Payments

Currently when making a transfer of funds or payment to another person, consumers that utilize their financial institution via the Internet or mobile services to send money to another consumer are most likely not aware that the type of ACH debit posting to the account to pay for that transfer is labeled with the Standard Entry Class (SEC) Code of "WEB". The ACH WEB debit that posts to the account of a consumer who initiated the ACH debit, signifies that the consumer had initiated and authorized the debit entry either via the Internet or a mobile device.

Up until the time of this Rule change, the credit portion of the transaction to the receiving consumer has been labeled with the SEC Code of "PPD", commonly used for Direct Deposit or "CIE", commonly used for the credit to a biller as a result of a consumer's bill payment push. Now with the Rule change, the ACH Rules allow the use of the SEC Code "WEB" for the ACH credit going to the receiving consumer. Prior to the rule change, an ACH WEB credit entry could only be a reversal of an ACH WEB debit.

As of March 21, 2014, the NACHA Rules will allow the use credit WEB Entries for P2P transactions. It will be mandatory for all P2P Services offered by you or a third party to use credit WEB Entries for P2P transactions sent via ACH by no later than March 20, 2015. Specifically, the P2P Rule amendment:

  • Defines a P2P payment in the Rules: a credit Entry initiated by or on behalf of a holder of a Consumer Account that is intended for a Consumer Account of a Receiver. A P2P Entry uses the Internet-Initiated/Mobile Entry (WEB) Standard Entry Class Code;
  • Allows a credit version of the WEB Standard Entry Class (SEC) Code to be used for a P2P credit transaction sent from a consumer's DDA;
  • Establishes standardized formatting requirements for such a WEB credit and ensures that for WEB credits - and WEB debits if used to fund P2P transactions - the Company Entry Description in the Company/Batch Header Record contains a value that lets the Receiver know that the entry is a P2P transaction;
  • Clarifies how Notifications of Change (NOCs) should be handled for P2P WEB credits and for bill payment CIEs; and
  • Allows an Addenda Record for a WEB credit to include up to 80 characters of payment related information in free form text.

The impact of the P2P Rule amendments are primarily to financial institutions and third-party processors that facilitate person-to-person funds transfers utilizing the ACH network.

Important Legal Disclosures and Information

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