Overview

Authorize.net has enhanced its electronic check service, eCheck, to include an account validation service. This improvement was introduced to ensure compliance with updated mandates from the National Automated Clearing House Association (NACHA), the governing body that oversees the Automated Clearing House (ACH) network in the United States.

Previously, Authorize.net only validated a customer's routing number before accepting an eCheck transaction for processing. As of March 18, 2022, Authorize.net now also verifies the customer's account number in addition to the routing number for applicable transaction types. This enhancement is designed to reduce the number of returned eCheck transactions and improve overall payment reliability for you and your customers.

No action is required on your part to accommodate this change, and there are no additional fees associated with this enhancement.

Applicability

This enhancement applies to eCheck transactions that fall into either of the following categories:

• WEB transactions — eCheck transactions initiated via a website or online interface.
• First transactions in a subscription or recurring payment series — Specifically, the initial transaction processed through Automated Recurring Billing (ARB).

What Changed

Previous Validation Process

Before March 18, 2022, Authorize.net validated only the customer's routing number prior to accepting a WEB or ARB eCheck transaction for processing.

Updated Validation Process

Effective March 18, 2022, Authorize.net now validates both the customer's routing number and account number before accepting applicable eCheck transactions for processing. This dual validation applies to:

• WEB eCheck transactions
• The first transaction in an ARB subscription or recurring payment series

Impact to Your Account

While no action is required on your part, you should be aware of the following potential impact:

• Potential increase in initial eCheck transaction decline rate: Due to the enhanced account number validation, some transactions that previously passed the routing number check may now be declined at the point of submission. These transactions would have otherwise been declined after processing and during settlement. The new validation catches these issues earlier in the transaction lifecycle.
• No additional fees: There are no new or additional fees associated with this enhancement.
• Reduced returned eCheck transactions: Overall, this service is designed to reduce the volume of returned eCheck transactions, improving payment success rates over time.

Frequently Asked Questions

• Do I need to make any changes to my integration or account settings to support this update?
  • No action is required on your part. The account validation enhancement was implemented automatically on March 18, 2022. Your existing integration with eCheck.Net will continue to function without any modifications.
• Will there be any additional fees for the new account validation service?
  • No. There are no additional fees associated with this enhancement. The account validation service is included as part of your existing eCheck service.
• Why might I see more eCheck declines after this change?
  • The enhanced validation now checks both the routing number and the account number before accepting a transaction. If an account number is invalid or does not match, the transaction will be declined at submission rather than after it has been sent for settlement. This means some transactions that previously appeared to process successfully before being returned will now be declined upfront. This is an improvement, as it provides faster feedback and reduces the occurrence of returned transactions.
• Which transaction types are affected by this change?
  • This change affects eCheck transactions categorized as WEB transactions and the first transaction in an ARB subscription or recurring payment series. Other eCheck transaction types are not impacted by this specific enhancement.
• What is the benefit of this change to my business?
  • By validating both the routing number and account number upfront, this enhancement helps reduce the number of returned eCheck transactions. Fewer returns mean less administrative overhead, reduced return fees from your bank, and a better experience for your customers.
• Is this change required by a regulatory body?
  • Yes. This enhancement was implemented to ensure compliance with updated mandates from NACHA, which governs the ACH network used to process eCheck transactions in the United States.

Glossary

• ACH (Automated Clearing House): A U.S. electronic funds-transfer network used to process financial transactions, including direct deposits and eCheck payments.
• ARB (Automated Recurring Billing): An Authorize.net feature that enables merchants to set up and manage subscription-based or recurring payment schedules for customers.
• eCheck: Authorize.net's electronic check processing service that allows merchants to accept payments directly from a customer's bank account via the ACH network.
• NACHA (National Automated Clearing House Association): The organization that governs the ACH network and establishes the rules and standards for electronic financial transactions in the United States.
• WEB: A NACHA-defined Standard Entry Class (SEC) code used to identify eCheck transactions that are initiated by a customer through an internet-based interface.