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By: Karen Sylvester, AAP, APRP, CAMS, CRCM, NCP, Senior Director, Compliance Education
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Pennies make dimes and dimes make dollars… Just small change could impact your bottom dollar!
Mark your calendars for the newest ACH Rule change!
Micro-Entries have been a topic of conversation within the industry and will formally hold their place within the ACH Rules effective September 16, 2022. The first phase of the new Rule surrounding Micro-Entries inducts them into the definitions section of the Rules as well as provides clarity to those validation technique transactions.
These small entries will allow the ability to “verify a Receiver’s account or an individual’s access to an account.” In addition, the Micro-Entries will be a credit only or a debit and a credit (must offset) of less than $1.00. If there is more than one Micro-Entry, transactions are expected to come together in one batch.
Additionally, this Rule will standardize the formatting of these transactions with a Company Entry Description of “ACCTVERIFY” (just like we see with REVERSAL or REDEPCHECK transactions). The Receiver should expect the company name to be a name they recognize and both the company name and the Standard Entry Class (SEC) code of the Micro-Entry to be significantly similar to the live transactions moving forward.
Don’t put your calendars away quite yet though, as the second phase of Micro-Entries goes into effect March 17, 2023. This directly impacts Originators (and their ODFIs). Originators of these transactions will be required to employ commercially reasonable fraud detection to reduce fraud commonly associated with these transactions. The Originators (and ODFIs) should monitor forward and return volumes to establish a baseline for normal activity. The returns of the Micro-Entries would count within the Return Thresholds already established within the ACH Rules.
Though this type of validation is not new to the network, with these updates to the Rules, it should be easier to identify these types of transactions, and the Receiver should be able to clearly identify the company that is sending them.
Looking for ways to stay up to date on upcoming ACH Rules changes? Consider joining us for Payment Systems Update now through March 10th! Together we will cover Third-Party Sender roles and new responsibilities, Same Day ACH Rule changes, updates to meaningful modernization, other ACH Rules changes and more. Click here to learn more or register now. For those unable to attend in person there is also an abbreviated virtual update available.