Automated Clearing House (ACH) transactions - Secure Trading

51 Pages·2016·1.23 MB·English

by  Michael Buckley

ACH

Automated Clearing House (ACH) transactions allow the Merchant to
accept payment from or make a payment to the Customer’s Bank
Account.

Version: 1.11 (a)
Published: 1 August 2017
ACH

Table of Contents
1 Introduction ...................................................................................................................................... 3
1.1 Overview .................................................................................................................................... 3
1.2 Account Configuration ................................................................................................................ 3
1.3 Chargebacks .............................................................................................................................. 3
2 Process overview ............................................................................................................................. 4
2.1 Summary .................................................................................................................................... 4
2.2 Account Check ........................................................................................................................... 6
2.3 Authorisation Request ................................................................................................................ 8
2.4 Settlement .................................................................................................................................. 9
2.5 Confirmation ............................................................................................................................. 10
2.6 Settle Status ............................................................................................................................. 11
2.7 Refunds .................................................................................................................................... 12
3 ACH Account Check ...................................................................................................................... 13
3.1 XML ACH Account Check Request ......................................................................................... 13
3.2 XML ACH Account Check Response ....................................................................................... 18
4 ACH Authorisation ......................................................................................................................... 23
4.1 XML ACH Authorisation Request ............................................................................................. 23
4.2 XML ACH Authorisation Response .......................................................................................... 27
5 ACH Authorisation with Account Check ..................................................................................... 31
5.1 XML ACH Authorisation with Account Check Request ............................................................ 31
5.2 XML ACH Authorisation with Account Check Response ......................................................... 34
6 ACH Refund .................................................................................................................................... 37
6.1 XML ACH Refund Request ...................................................................................................... 37
6.2 XML ACH Refund Response ................................................................................................... 40
7 ACH Transaction Query ................................................................................................................. 42
7.1 XML ACH Transaction Query Request .................................................................................... 42
7.2 XML ACH Transaction Query Response ................................................................................. 42
8 ACH Transaction Update ............................................................................................................... 43
8.1 XML Transaction Update Request Example ............................................................................ 43
8.2 XML Transaction Update Response Example ......................................................................... 43
9 Additional Notes ............................................................................................................................. 44
9.1 System Limitations ................................................................................................................... 44
9.2 Card Store ................................................................................................................................ 44
9.3 Subscriptions and Tokenisation ............................................................................................... 44
9.4 Supported Currencies .............................................................................................................. 44
9.5 Mail or Telephone Order .......................................................................................................... 44
10 Testing ......................................................................................................................................... 45
10.1 Account Check Requests (ACCOUNTCHECK) ....................................................................... 45
10.2 Authorisation Requests (AUTH) and Chargebacks (CHARGEBACK) .................................... 45
11 Further Information and Support ............................................................................................. 48
11.1 Secure Trading Support ........................................................................................................... 48
11.2 Secure Trading Sales ............................................................................................................... 48
11.3 Useful Documents .................................................................................................................... 48
11.4 Frequently Asked Questions .................................................................................................... 48
12 Appendix ..................................................................................................................................... 49

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1 Introduction
Automated Clearing House (ACH) bank transfers allow the merchant to accept payment directly
from a customer’s bank account. The merchant can also transfer money directly to a customer’s
bank account, either by refunding a previous transaction, or by performing a Cardholder Funds
Transfer (CFT) Request.
1.1 Overview
This document describes processing ACH Bank Transfers using the Secure Trading Payment
Platform (STPP). It pays specific attention to the XML fields used to create ACH Requests and
the information returned in the Response.

The examples specified may include other fields not covered in this document. Details of these
fields are available in the STPP XML Specification (see section 11.3 Useful Documents on
page 48).

Of the fields outlined within this document, Secure Trading may add
additional fields and tags in the future; we would therefore recommend that
you do not build your application to only accept these tags.

Please note the order of the tags cannot be guaranteed. Some tags may be
returned in a different order to the examples in this document.

1.2 Account Configuration
There are a few steps the merchant needs to have considered to begin processing ACH bank
transfers. The merchant may require new accounts with different providers.
1.2.1 Acquiring Bank
The merchant must have an account with an acquirer that supports ACH bank transfers and is
integrated with Secure Trading.
1.2.2 Secure Trading
The merchant will need to have an account with Secure Trading. For more information, contact
Secure Trading Sales (see section 11.2 Secure Trading Sales on page 48).

The merchant will need to provide the support team with their ACH account details to allow
them to enable ACH on their Secure Trading account (see section 11.1 Secure Trading
Support on page 48).
1.2.3 Notifications
Secure Trading recommends that all merchants implementing ACH bank transfers configure
URL notifications to be kept informed of when ACH transfers have been updated/completed on
their accounts. For more information, please refer to the Notifications documentation (see
section 11.3 Useful Documents on page 48).
1.3 Chargebacks
ACH transactions may be subject to Chargebacks. An ACH Chargeback is a payment that is
initiated when a customer successfully disputes an item on their bank account statement. The
full amount is transferred back to the customer’s account from the merchant’s, on request of the
customer’s bank. It is strongly recommended that all merchants with ACH accounts read Secure
Trading’s Chargeback documentation (see section 11.3 Useful Documents on page 48) so
that they are fully aware of the Chargeback process and how to manage them.

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2 Process overview

2.1 Summary
There are a number of different parties involved in Automated Clearing House (ACH) bank
transfers. These are listed, below:

The Customer - The purchaser of goods or services. They will process a payment by
supplying their ACH bank details to the merchant.

The Merchant – The seller of goods or services. They will need to have an account with
Secure Trading.

Secure Trading – The Payment Service Provider. They facilitate the transaction, by
securely contacting the merchant’s acquiring bank.

The Merchant’s Bank – Performs checks on the customer’s bank account details and
authorises transfers.

Below is a summary of the process of a typical ACH bank transfer:

Sending the XML Request
In a typical transaction where the customer is paying the merchant, the customer sends their
bank details directly to the merchant, who then constructs an Account Check and Authorisation
(AUTH) XML Request and submits it to Secure Trading’s Payment Gateway.

Account Check
Secure Trading then securely contacts the merchant’s acquirer, which carries out checks on the
payment details provided by the customer and returns the results of these checks back to
Secure Trading. The merchant may decide to not proceed with the processing of further
transactions, if the Account Check Response does not match a certain criteria, by establishing
rules with the Secure Trading support team. Otherwise, Secure Trading will securely contact the
merchant’s acquirer to seek authorisation for the bank transfer.

Authorisation
Secure Trading will contact the merchant’s acquiring bank to arrange for Authorisation. Secure
Trading will automatically schedule settlement on all recently authorised payments.
Transfers that have been declined by the merchant’s acquirer are cancelled immediately.

Settlement
Secure Trading checks for confirmation that the transfer was settled, daily. After a holding
period defined by the merchant’s acquirer, the acquirer informs Secure Trading that the transfer
was either settled or cancelled, and they update their records respectively.

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Diagram of Entire Process Overview – Combined Account Check with Authorisation Request
Account Check
Step 1) The Customer Step 2) The Merchant Step 3) Secure Trading Step 4) Merchant Bank
opts to make an ACH submits an XML Request validates the Request processes the Account
Bank Transfer on the to Secure Trading. and sends the Check request received and
merchant’s website. Customer’s bank details returns a response.
to the Merchant’s Bank.
Step 5) Secure Trading
receives results of the
checks from the
Merchant’s Bank.
Step 6) If the Account Check returns a
NOT MATCHED response, the Merchant
will receive an XML Response and the
Authorisation will NOT proceed. NOT MATCHED – (4) MATCHED – (2) NOT CHECKED – (1)
Bank concludes Customer’s Bank concludes Customer’s Bank undecided or unable
account is high risk. account is low risk. to complete checks.
Authorisation
Step 7) Secure Trading sends
details to the Merchant’s Bank to
authorise the transfer.
Step 8) The Merchant’s

Step 9) The Merchant receives an XML Bank processes the
Response from Secure Trading  request and updates their
containing results of Account Check and records.
Authorisation.
DECLINED AUTHORISED
Settlement
Step 10) Secure Trading sends
details to the Merchant’s Bank to
settle the transfer.
Step 11) Secure Trading
regularly checks for
Step 12) Any settlement notifications that 
confirmation from the
have been configured would be sent once
 Merchant’s Bank.
transactions have been officially
confirmed to be cancelled or settled.
CANCELLED SETTLED
The Merchant’s Bank The Merchant’s Bank
informs Secure Trading that informs Secure Trading that
the funds were not the funds have been settled.
transferred.

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2.2 Account Check
An Account Check is an optional request that allows payment details to be validated by
checking the account’s status. No funds will be reserved or transferred by the Account Check
Request. Secure Trading allows Account Checks to be carried out on ACH accounts for select
acquirers. Please contact support for information on which Acquirers support Account Check
(see section 11.1 Secure Trading Support).

The merchant may decide to not proceed with the processing of further transactions, if the
Account Check Response does not match a certain criteria. This is achieved by contacting the
support team and setting up rules that act on the security response field.

The following steps outline the process of sending an Account Check Request to Secure
Trading:

Step 2) Secure Trading
Step 1) The Merchant validates the Request
submits an XML Request and sends the
to Secure Trading. Customer’s bank details
to the Merchant’s Bank.
Step 3) The Bank
performs verification
checks; is the Customer’s
account valid and in good
standing?
Step 4) The Bank checks
the Customer’s details
against a National
negative database.
Step 5) Secure Trading
receives the results of
these checks from the
Merchant’s Bank.
Step 6) The Merchant
receives an XML
Response from Secure
Trading with results of
the checks.
NOT CHECKED – (1) MATCHED – (2) NOT MATCHED – (4)
Bank undecided or unable Bank concludes Customer’s Bank concludes Customer’s
to complete checks. account is low risk. account is high risk.
Figure 1 - Process Overview of Account Check for ACH

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2.2.1 Account Verification Check
The merchant’s acquirer will perform checks to verify that the customer’s account is valid and in
good standing. The response returned following these checks can either be ‘2 – Matched’ (low
risk), ‘4 – Not Matched’ (high risk) or ‘1 – Not Checked’. Transactions that do not receive a
definitive response may be checked against the negative database (see section 2.2.2 Negative
Database). Secure Trading recommends against proceeding with further transactions using
payment details that return the ‘4 – Not Matched’ response. For further details, please see
section 3.2.4 <security> on page 20.
2.2.2 Negative Database Check
The merchant’s acquirer may also search a large National database for negative reports against
the payment details submitted in the XML Request. This database contains information on over
150 million accounts. Checks against the negative database can only return a ‘2 – Matched’ or
‘4 – Not Matched’ response. Secure Trading recommends against proceeding with further
transactions using payment details that return the ‘4 – Not Matched’ response. For further
details, please see section 3.2.4 <security> on page 20.

Please note that the Negative Database check may need to be enabled by your
acquirer before it can be used as part of Account Check Requests. Please contact
your acquiring bank for further information.

Please note that Secure Trading allows Account Checks to be combined with an
Authorisation in the same request. A summary of an Authorisation Request can
be found in section 2.3 Authorisation Request.

2.2.3 Security Response
After performing an Account Check, you are returned a security response from the acquiring
bank, in the form of a number, which indicates the result of the checks performed on the
customer’s bank account details. A detailed XML specification of the security response can be
found in section 3.2.4 <security> on page 20.

When performing combined ACH Account Check and Authorisation
Requests, it is recommended that you contact support in order to set up
rules, which use the results of the Account Check carried out by the

acquiring bank to either allow or prevent future authorisations.
2.2.4 Rules
Rules can be assigned on your account by the Secure Trading support team, which will use the
results of the Account Check to decide whether or not to process an associated Authorisation
transaction. The recommended process flow is as follows:
1. If the Account Check returns a ‘Matched’ or ‘Not Checked’ response, then process the
Authorisation.
2. If the Account Check returns a ‘Not Matched’ response, then do NOT process an
Authorisation.

Please note the default process flow can be customised. For more information,
please contact Secure Trading support (see section 11.1 Secure Trading Support
on page 48).

An alternative to having rules set up is that your system has this logic present which determines
whether or not to submit an Authorisation Request based on the Account Check Response.

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2.3 Authorisation Request

Step 1) The Merchant Step 2) Secure Trading Step 3) The Merchant’s
submits an XML Request validates the request and Bank processes the
to Secure Trading. sends the details to the request.
Merchant’s Bank.
Step 4) Secure Trading
returns an XML
Response to the
Merchant.


The Merchant’s Bank has
The Merchant’s Bank has
authorised the transfer
declined the transfer request
request.
or the request failed.
settlestatus is set to settlestatus is set to
“0” - Automatic “3” - Cancelled

Figure 2 - Process Overview of Authorisation

Please note that after an ACH bank transfer request has been authorised, it is
possible for you to update some of the details or cancel the transfer altogether, by
following the steps outlined in section 8 ACH Transaction Update.

Please note that Secure Trading allows Authorisations to be combined with an
Account Check in the same request. A summary of an Account Check Request
can be found in section 2.2 Account Check.

Please note that ACH transactions are cancelled by Secure Trading if they have
not been settled within 7 days of being authorised.

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2.4 Settlement

Merchants can be informed on transactions that are settled, through the use of Notifications. For
more information, please refer to the Notifications documentation (see section 11.3 Useful
Documents on page 48).

Secure Trading will contact the
Merchant’s Bank daily to start the
settlement process for recently
authorised ACH transactions.

The settlestatus is set to
“10” - Settling,
and remains this way until
the Merchant’s Bank
confirms the settlement is
complete via confirmation.

Figure 3 - Process Overview of Settlement

Please note that after Secure Trading starts the settlement procedure on an
authorised ACH bank transfer request, you will no longer be able to update or
cancel the transaction. If you would like to stop the transfer at this stage, you will

need to contact your acquirer.

Please note that the time between a transaction being sent for settlement and
receiving confirmation of settlement depends on the holding day period defined by
your acquirer. For more information on holding days, please contact your acquirer.

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2.5 Confirmation

Secure Trading will contact the
Merchant’s Bank daily to check if
any outstanding ACH
transactions have been settled.

The settlestatus is set to The settlestatus is set to
“100” - Settled, “3” - Cancelled,
if the transaction has been if the transaction has been
confirmed as settled by the confirmed to be cancelled
Merchant’s Bank. by the Merchant’s Bank.

Figure 4 - Process Overview of Confirmation

Once details of the transaction have been sent to the merchant’s acquirer to be settled, Secure
Trading will check for confirmation from the acquirer on a daily basis. Funds can be captured at
any time between the settlement request and receiving confirmation from the acquirer. When
Secure Trading finally receives this confirmation, the settlestatus is updated to a final
value:
If the transaction has been confirmed to be successful and the funds have been
transferred, the settlestatus is set to 100.
If the transaction has failed, and no funds have been transferred, the settlestatus is
set to 3

Please note that it is possible to set up custom notifications on ACH transactions
processed through the Secure Trading system. For more information, please refer
to the Notifications documentation (see section 11.3 Useful Documents on page

48).

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