Understand ACH Payments and Rejects

ACH payments let customers pay directly from a bank account instead of a card, and Maxio Payments processes them under the same core requirements as any other payment method. When a bank rejects an ACH transaction, Maxio assigns it a reason code, and the right next step depends on which one it is.

ACH and Maxio Payments

An ACH Payment is a simple and secure way to electronically transfer funds from one bank account to another. Instead of using a credit or debit card, funds are transferred directly from your bank account using your account number and routing number. This makes it a convenient and efficient option for managing your financial transactions.

When a customer processes ACH transactions through Maxio Payments, they can expect the funds to appear in their bank account for the exact amount that was submitted for payment. They see your organization's name listed in the description line item on their bank statement. The way the customer's bank displays the transaction may vary, but the customer can recognize the payment by looking at the organization's name and the amount.

An ACH transaction using Maxio Payments on the Advanced Billing platform must follow the normal prerequisites used in any other payment transaction to be processed successfully.

• The selected site must be in Live mode, not test mode.
• A customer must exist within the site.
• The customer must have a valid Payment Method saved to their account.
• The customer must be associated with a Subscription that is Active.
• An outstanding invoice must exist for the subscription.

Both ACH transactions and debit card payments draw funds from a bank account. However, debit card transactions are processed similarly to credit card transactions within Maxio Platform. As a result, an integration for credit card processing is necessary to accept debit card payments.

ACH rejects and reason codes

An ACH Reject occurs when an ACH transaction is blocked from completion. This typically is a result of a customer's bank refusing the transaction. Maxio Payments can generate a list of payments that failed or declined.

ACH Rejects in Advanced Billing or Maxio Platform can currently be viewed by checking the Payments report and searching for rejected ACH transactions.

Rejects can occur for a variety of reasons depending on a customer's bank and their requirements. Rejected ACH transactions have an associated Reason Code that indicates why the transaction was rejected. The exact remediation process for an ACH reject depends on the reject in question.

Fraud-related ACH rejects

If an ACH payment is rejected due to fraud (see table below), Maxio Payments immediately sends you an email about the fraudulent charge and prevents future attempts to charge the same Payment Profile. The email explains why the customer's payment method was rejected and includes details about the old payment method. The Payment Profile is then permanently disabled, and the user is prompted to provide a new payment method to continue their subscription and settle any outstanding invoices via the dunning email.

Late rejects

Maxio Payments accelerates the funding process by depositing ACH payment funds into customers' bank accounts within 3-5 days instead of the typical 5-7 days. However, this may result in some ACH payments being rejected or returned, leading to funds that were initially deposited into their account being debited.

Preventing late rejects

Customers cannot prevent ACH payment rejections entirely. However, to avoid further issues, we recommend disabling ACH for customers with a history of returned ACH payments. Instead having them make payments using a credit card.

Impact in the Maxio Platform

In the Maxio Platform, when an ACH payment is rejected, a refund receipt is created to adjust the balance in Maxio Platform/General Ledger. Once the merchant resolves the reject reason code with the customer, they can create a new invoice and send it to the customer to reattempt payment.

Related information

For the full severity and remediation table behind each return code, see Understand ACH Return Codes and Best Practices.

To stop a debit before it settles rather than handling the reject afterwards, see Cancel ACH and Direct Debit Transactions Before Capture.

For debits drawn on accounts outside the US, where the return reasons differ from ACH return codes, see Identify and Resolve International Direct Debit Failures.

To learn more about credit card processing within Maxio Platform, see Understand Credit Card Processing and Declines.

To access rejected-transaction reports, see the Configure the Payment Summary Report and Manage Transactions in Advanced Billing help articles.