NACHA Compliance Update: Standardized Company Entry Descriptors for ACH Transactions (Including Batch File Requirements)

Overview

Effective March 20, 2026, NACHA is implementing a new compliance rule requiring the use of standardized Company Entry Descriptors (CEDs) for specific ACH transactions. This update is part of a broader risk management initiative aimed at improving fraud detection and enhancing transaction transparency across the ACH network.

What’s Changing?

The Company Entry Descriptor field in the ACH batch header record (positions 54–63) must now include standardized values for certain transaction types:

• “PURCHASE” must be used for all eligible consumer purchase debit entries using the WEB Debit SEC Code.
• “PAYROLL” must be used for all payroll credit entries using the PPD Credit SEC Code.

These descriptors replace any custom text or identifiers previously used in the CED field.

Batch File Users: Required Descriptor Format

This requirement also applies to merchants who submit ACH transactions via batch files.

Who Is Affected

Merchants who submit ACH using fixed-width or CSV batch files.

Required Action

Update your batch file templates to include the standardized descriptors:

• Fixed-width files:
  • Batch Header Record (Type 2)
  • Position: 31
  • Length: 10 characters
• CSV files:
  • Descriptor must populate in the 5th field of the Batch Header Record

Additional formatting requirements:

• Must be in uppercase (recommended)
• Maximum 10 characters
• Alphanumeric only
• Must be consistent across the batch

Compliance Risk if No Action Is Taken

Failure to comply may result in:

• ACH file rejection
• Processing delays
• Potential rule violations cited by your ODFI
• Operational disruption to payroll or consumer debits

? Action Deadline: Update batch file templates before March 20, 2026.

Why This Matters

Historically, merchants could populate the CED field with custom identifiers such as the first 10 characters of a consumer order ID. These identifiers often appeared on bank statements and return/NOC reports, aiding in transaction reconciliation.

With the new NACHA rule, the CED field is now reserved exclusively for the standardized values “PURCHASE”, for WEB Debit transactions or “PAYROLL”, for PPD Credit transactions. As a result, custom identifiers will no longer appear in bank-facing reports, which may impact how some merchants reconcile returned transactions.

Impact on Reconciliation

• Most Gateway ACH Merchants

For the majority of Gateway ACH merchants, including those whose return files are processed within the Forte system, reconciliation processes remain largely unchanged. These merchants can continue to use the Returns Report in the DEX portal to identify returned transactions. The report includes full transaction details such as the original consumer order ID, even though this identifier no longer appears in the Company Entry Descriptor field.

• Additional Reconciliation Method (When Returns Are Not Processed by Forte)

In rare cases where a Gateway ACH merchant receives return files directly from their bank and those returns are not processed within the Forte system, reconciliation may require an alternative approach. Since the Company Entry Descriptor field now contains only “PURCHASE” or “PAYROLL,” merchants in this scenario will need to use the DEX portal to retrieve the original transaction details.

How to Retrieve Order Information in DEX

To reconcile a returned transaction when the CED field no longer includes your order ID:

1. Log into the DEX portal using your merchant credentials.
2. Navigate to the Transactions or Reports section.
3. Select the relevant Location ID associated with the transaction.
4. Adjust the “Received Date” to begin at least one week prior to the NOC or return date.
5. Apply filters such as transaction amount, customer name, or other known details from the bank’s return notice.
6. Locate the transaction and view its details to retrieve the original consumer order ID and other identifying information.

This method allows you to accurately map return notices to the corresponding transactions in your system.

Summary of Changes

Additional Resources

• NACHA Rule Details – Company Entry Descriptions