ACH transactions taken online are classified as WEB transactions. WEB ACH payment processing was first introduced in March, 2001.

The success of ACH payment processing on websites is obvious. Electronic checks are the most popular alternative payment option on merchant websites. And millions of consumers routinely pay bills online.

An internet ACH payment transaction is defined as a debit to a consumer bank account, for which the authorization is obtained from the consumer who owns the bank account over the internet. Internet ACH payment transactions require additional security procedures and obligations that help offset the risk of online transactions.

ACH Payment Transaction Characteristics

The following applies to ACH payment transactions taken online.
  • ACH payment WEB transactions can be used for both one-time and recurring debits.
  • The merchant must use commercially reasonable processes for verifying the validity of routing numbers for ACH WEB transactions. Banks are not required to confirm that the account number and account name within an ACH payment record match.
  • ACH payment done online applies only to consumer debits
    (the only exception is a credit entry that is reversing a debit)
  • Online ACH payment transactions must use a minimum of 128 bit encryption.
  • ACH payment transactions must be  protected by adequate security practices and procedures.
  • Availability of funds in the account cannot be determined before initiation of the ACH payment debit.
  • Authorization for the ACH payment transaction must come from the owner of the bank account.
  • Authorization for ACH payment WEB transactions must be retained for two years following the termination or revocation of the authorization.
  • If an ACH payment is returned due to non-sufficient funds, the return should posted to the bank by the second banking day after settlement.
  • A consumer has up to 15 days after receipt of their bank statement to notify their bank in writing of an unauthorized ACH payment debit.
  • Banks have the right to post funds from ACH payment transactions made online based on the account number alone. There is no requirement that the bank verify the name on the account matches.