SEC Codes
As part of NACHA rules, each transaction must include the method in which the authorization was received. This method of authorization will be detailed by the “Standard Entry Class” code, or SEC code. Integrated partners will need to include the appropriate SEC code along with each transaction message that their merchants send to Forte. Current developer documentation lists this element as being “Optional”. However, if the SEC code is not specified in the transaction message, it will default to the “PPD” or “WEB” SEC code depending on the method of integration being used (only “Secure Web Pay” defaults to WEB and cannot be changed). This may not be appropriate for some payment channels. If the merchant processes ACH transactions that are authorized using multiple methods, the integrated solution will need to allow the merchant to select the appropriate method. In some cases, partners may choose to assume the appropriate SEC code by the area of the software in which the transaction took place. For example, if the partner’s solution has both a merchant facing and customer facing component, the customer facing transaction may always take place online as a “WEB” transaction, whereas the merchant facing transaction transactions may always take place as “POP”. SEC codes are especially important in the event that a proof of authorization is required from the merchant. Disputes against transactions that have been coded incorrectly may automatically be lost by the merchant.
Commonly used SEC codes
- POS/POP - POS (Point-of-Sale) and POP (Point-of-Purchase) entries refer to single debit payments made in-person via credit/debit card (POS) or converted check (POP). Both the card and/or the check are used to record the account information in association with the payment, and the original method of payment is then returned to the customer.
- PPD - (Prearranged Payment and Deposit Entry) refers to Direct Deposit entries and any Preauthorized Bill Payment applications. In this way, these payments can be both debits or credits (meaning funds can be removed or deposited into an account) and either single or recurring (occurring as a one-time payment or scheduled multiple payments).
- WEB - (Internet Initiated Entry) is simply any debit via the Internet. These entries may be single or recurring. These debits must be authorized by the receiver via the Internet. In other words, if the authorization itself was actually received in person, via U.S. Mail or by phone, for example, even to actually suffice for a payment from the Internet – it’s not really a WEB entry. However the authorization was received is how the transaction must be classified via the SEC code. Also bear in mind you may only initiate a credit here as a reversal of a WEB debit. You can’t submit a credit using the WEB entry code.
- TEL - (Telephone Initiated Entry) entries are single debit entries authorized via the telephone. In this oral authorization entry there must be a pre-existing relationship between the receiver (person authorizing the payment) and originator (person/entity receiving the payment). If there is no relationship already in place, then the receiver has to make the phone call. Additionally, all TEL transactions have to be recorded and kept on file for a minimum of two years from the date of the transaction. If the transaction is not recorded, then the originator needs to provide the receiver with a written notice that confirms the oral authorization before the payment settles.
- CCD - (Corporate Credit or Debit) is also known as “Cash Concentration or Disbursement.” These entries can be either a credit or debit – and occur specifically between corporate entities. It can be a single entry or recurring. All business bank account transactions are listed under this SEC code. A signed authorization has to be obtained either separately or included in the contract between the businesses prior to the transaction date.
- ARC - (Accounts Receivable Entry) is defined as a check conversion that is originally received via the U.S. Mail. This includes the USPS (United States Postal Service), as well as courier services like FedEx and UPS. According to NACHA, this does not include personally delivered or night drop-box items. Corporate checks are also not included.
- RCK - (Represented Check Entry) entry refers specifically to single debits that occur as a result of check re-presentment. Check re-presentment occurs after an item is returned NSF (Non-Sufficient Funds), or is bounced. The service will simply represent the check at a later, scheduled date after it is returned. Some businesses choose to initiate check re-presentment in order to attempt to recollect their funds. For merchants that use RCK entries, a notice must be displayed visibly at the POS.