Get signed authorization from customers
In order to be compliant with the rules and regulations set forth by NACHA, your company is required to obtain signed authorization from your customers to charge their bank account.
Key CashFlow ePayments are ACH payments processed by NACHA – National Automated Clearing House Association.
Your company’s agreement with customers should:
- Include the required EFT debit authorization, which can be found in The ACH Rules for Originators (see below)
- Clearly state the Company Name that will be shown on your customers’ bank statement, as the Originator of the ACH debit
These rules also require that your company keep signed authorization on file for at least two years after the authorization has been terminated or revoked, and must be able to provide copies of any written authorization forms upon request.
To access the most up-to-date edition of “Operating Rules of the National Automated Clearing House Association,” go to: http://www.achrulesonline.org/ and create a free account by selecting “Basic User.” Your company must comply with Article Two of “Operating Rules” (aka The ACH Rules for Originators).
Authorization form example
Here's an EXAMPLE of an Authorization Form:
I hereby authorize Key CashFlow, on behalf of [Vendor name], to initiate entries to the bank accounts that I enter, or enable [Vendor] to enter, on the Key CashFlow web site [in order to pay amounts that I owe to Vendor in accordance with instructions entered by Vendor on the Key CashFlow web site] and, if necessary, to initiate adjustments for any transactions credited or debited in error. I represent that I have authority to bind the organization that owns the bank accounts, and to authorize all transactions to the bank accounts that are initiated through Key CashFlow, I acknowledge that transactions initiated to the bank accounts must comply with the provisions of U.S. law. This authorization will remain in effect until the organization notifies Key CashFlow in writing to cancel it in such time as to afford Key CashFlow and the bank reasonable opportunity to act on it.
Things to know
- If more than 0.5% of ACH debits from customers’ bank accounts are returned as “Unauthorized,” it may be an indication that the required pre-authorizations have not been obtained
- There may be times where we will need to request a signed copy of the authorization agreement you have with your customer