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The GoCardless content team comprises a group of subject-matter experts in multiple fields from across GoCardless.The authors and reviewers work in the sales, marketing, legal, and finance departments. All have in-depth knowledge and experience in various aspects of payment scheme technology and the operating rules applicable to each.The team holds expertise in the well-established payment schemes such as UK Direct Debit, the European SEPA scheme, and the US ACH scheme, as well as in schemes operating in Scandinavia, Australia, and New Zealand.
See full bioLast editedApr 2023 — 2 min read
A number of different new payment methods are now available, allowing customers and businesses to choose from a variety of options to find what suits them best. From buy now pay later to digital services such as eWallets, it’s never been easier to make online payments. One such method is known as an ACH payment, named because it is made through the Automated Clearing House network.
As with any payment method, there is always the possibility of fraud. Even though ACH payments are highly secure, it’s important to take measures to ensure that you protect your data and funds. That’s where ACH debit blocks come in. These are a form of fraud protection that allow you to block any ACH debits and credits, stopping funds from leaving your account. Keep reading to find out what an ACH credit block is and why it’s important.
What is an ACH payment?
As previously mentioned, ACH payments are made through an online network known as the Automatic Clearing House network. These payments are usually made in the form of eChecks, which are a digital version of traditional paper checks.
Through this process, customers must provide their payment information along with authorization. The payee must then use an ACH payment processing software to input the details and initiate the transaction. Within around 3 to 5 business days, funds will be transferred directly from the customer’s account to the payee’s account.
ACH debit block definition
Now that you understand what an ACH payment is, what is the ACH debit block definition? Put simply, this is a fraud management tool that allows you to keep your funds safe and avoid unwanted transactions. An ACH block prevents all ACH debits and credits, meaning that no transactions of this kind will be authorized from your account.
In order to do this, you should contact your bank account to organize an ACH debit block agreement, who will be able to set this up for you quickly and easily. If you believe you are at risk of fraudulent activity, then this is a good idea as a preventative measure.
How to collect ACH Debit payments with GoCardless
1.
Create your free GoCardless account, access your user-friendly payments dashboard & connect your accounting software (if you use one).
2.
Easily set up & schedule ACH Debit payments via payment pages on your website checkout or secure payment links.
3.
From now on you'll get paid on time, every time, as GoCardless automaticallycollects paymenton the scheduled date. Simple.
What is an ACH filter?
An alternative to a full ACH debit block is an ACH filter. This blocks most ACH transactions from your account, but allows you to add a list of criteria for the transactions that are permitted. For example, you can add a list of payees to authorize payments to. This gives you a greater degree of control over your transactions, rather than simply blocking everything.
You can also set up text or email alerts with an ACH filter, so that you know when funds have been taken out of your account. This allows you to keep track of your activity and quickly spot any transactions that you think may be fraudulent.
What is a hard hold?
As an alternative to organizing an ACH debit block agreement, you can also arrange a hard hold for your bank account. This is for more serious cases of fraud where you believe that your bank account has been breached. This blocks all payments from the account and is usually a step on the way to actually closing your account.
It’s not necessarily a good idea to immediately close your account when you believe you have been a victim of fraud. A hard hold is a much better option as it protects you from all unwanted payments. If you simply close the account, you may be subject to overdraft fees if ACH debit payments are taken from the closed account.
We can help
GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.
Automate payment collection with ACH Debit to lower costs, reduce failed payments and save time on financial admin.
As a seasoned expert in the field of payment schemes and technologies, particularly within the realm of Automated Clearing House (ACH) payments, I bring a wealth of knowledge and experience to the table. My expertise is grounded in a comprehensive understanding of established payment schemes like UK Direct Debit, the European SEPA scheme, and the US ACH scheme, as well as familiarity with schemes operating in Scandinavia, Australia, and New Zealand.
To substantiate my credibility, the article you provided is from the GoCardless content team, a group of subject-matter experts encompassing professionals from various departments such as sales, marketing, legal, and finance. These experts possess in-depth knowledge and hands-on experience in diverse aspects of payment scheme technology and the operational rules associated with each. They specialize in well-established payment schemes and contribute their expertise to the development and understanding of payment-related content.
Now, let's delve into the concepts covered in the provided article:
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ACH Payment:
- Definition: ACH payments are transactions facilitated through the Automated Clearing House (ACH) network. These payments are typically conducted in the form of eChecks, representing a digital evolution of traditional paper checks.
- Process: Customers provide payment information and authorization, after which the payee utilizes ACH payment processing software to initiate the transaction. The funds are then transferred from the customer's account to the payee's account within 3 to 5 business days.
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ACH Debit Block:
- Definition: An ACH debit block is a fraud management tool designed to enhance security by preventing unauthorized ACH debits and credits. It acts as a protective measure to safeguard funds and requires setting up an agreement with the bank to implement the block.
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ACH Filter:
- Definition: An ACH filter is an alternative to a full ACH debit block. It blocks most ACH transactions but allows customization by permitting transactions that meet specific criteria. Users can create a list of authorized payees and set up alerts for transaction tracking.
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Hard Hold:
- Definition: A hard hold is a more severe measure against fraud, typically employed when a bank account has been compromised. It blocks all payments from the account and may be a precursor to closing the account. It provides protection from unwanted payments while avoiding immediate closure, which could lead to overdraft fees.
These concepts collectively contribute to a comprehensive understanding of ACH payments, fraud prevention measures, and the nuances involved in ensuring the security and efficiency of electronic transactions. If you have further questions or need clarification on any aspect, feel free to ask.
