Payflow ACH Payment Service Guide For Professional Use Only Currently only available in English. A usage Professional Uniquement Disponible en Anglais uniquement pour l’instant. Last updated: October 2013 Payflow ACH Payment Service Guide Document Number: 200000.en_US-201310 © 1999 - 2013 PayPal, Inc. All rights reserved. PayPal is a registered trademark of PayPal, Inc. The PayPal logo is a trademark of PayPal, Inc. Other trademarks and brands are the property of their respective owners. The information in this document belongs to PayPal, Inc. It may not be used, reproduced or disclosed without the written approval of PayPal, Inc. Copyright © PayPal. All rights reserved. PayPal (Europe) S.à r.l. et Cie, S.C.A., Société en Commandite par Actions. Registered office: 22-24 Boulevard Royal, L-2449, Luxembourg, R.C.S. Luxembourg B 118 349 Consumer advisory: The PayPal™ payment service is regarded as a stored value facility under Singapore law. 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Contents Chapter 1 Signing Up for Payflow ACH Payment Service . . . . . . . 7 How To Sign Up . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Retrying Return Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Chapter 2 About ACH Payments . . . . . . . . . . . . . . . . . . . .11 Benefits of ACH Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 How Does ACH Work?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Differences from Credit Card Payments. . . . . . . . . . . . . . . . . . . . . . . . . 12 Schedule of Submission for Settlement . . . . . . . . . . . . . . . . . . . . . . . . . 13 ACH Terminology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Chapter 3 Summary of Authorization Requirements . . . . . . . . . .17 Summary of CCD and PPD Authorization Requirements . . . . . . . . . . . . . . . . . . 17 CCD and PPD Debit Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Format of CCD and PPD Authorization . . . . . . . . . . . . . . . . . . . . . . . . . 17 Maintaining the Authorization Agreement . . . . . . . . . . . . . . . . . . . . . . . . 18 CCD and PPD Credit Authorizations . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Summary of ARC Requirements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 ARC Legal Framework. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 ARC Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 ARC Authorization Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Retention of source document. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Formatting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Summary of POP Requirements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 POP Legal Framework. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 POP Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 POP Authorization Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 POP Receipt Requirement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 POP Formatting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 POP Returns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Summary of RCK Requirements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 RCK Legal Framework. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 RCK Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Payflow ACH Payment Service Guide 3 Contents RCK Notice Requirements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 RCK: Retention of Item . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 RCK Formatting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Summary of TEL Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Legal Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 TEL Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 TEL Authorization Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 TEL Risk Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 TEL Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Further Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Chapter 4 How Payflow ACH Payment Works . . . . . . . . . . . . .25 ACH Payment Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Payment Batch Settlement Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Timetable for a Typical ACH Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Example of a Successful Business-to-Business Debit/Sale Payment. . . . . . . . . . 26 Example of a Business-to-Business Sale/Debit Payment With a Customer Return Within Three Posting Days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Example of a Business-to-Consumer Sale/Debit Payment With a Customer Return After Three Posting Days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Example of a Successful Business-to-Consumer Credit Payment . . . . . . . . . . . 28 Example of a Business-to-Consumer Credit Payment With a Customer Side Return. . 28 ACH Payment Types. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Tracking Payment Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Retrying Returned Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Payment Cycle With Retries Disabled. . . . . . . . . . . . . . . . . . . . . . . . . . 31 Payment Cycle With Retries Enabled . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Notifications of Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Chapter 5 Using PayPal Manager to Perform ACH Payments . . . . .33 Submitting a Single ACH Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Chapter 6 Using the Payflow Pro SDK to Perform ACH Payments . . .37 Payflow ACH Payment Server. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 ACH Payment Parameters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Example ACH Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Example Debit/Sale Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Example Credit Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 4 Payflow ACH Payment Service Guide Contents Example POP Debit/Sale Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Example ARC Debit/Sale Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Example RCK Debit/Sale Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Example WEB Debit/Sale Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Example WEB Credit Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Example Inquiry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Example Void . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Example Prenote Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Logging Payment Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Chapter 7 Testing ACH Payments Using the Payflow SDK . . . . . . .45 Testing ACH Payments — General Information . . . . . . . . . . . . . . . . . . . . . . . 45 Test Server. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Test ABA Routing Number. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Test Bank Account Numbers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Simulating a Successful Settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Simulating Returns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Simulating Returns Using the Payment Amount. . . . . . . . . . . . . . . . . . . . . 46 Alternative: Simulating Returns Using the Bank Account Number . . . . . . . . . . . 46 Simulating NSF Retries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Chapter 8 Responses to ACH Payment Requests . . . . . . . . . . .49 ACH Status Codes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Payflow Status Codes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 NACHA Return Status Codes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 ACH NOC Codes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 Payment Responses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 PNREF Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 RESULT Codes and RESPMSG Values. . . . . . . . . . . . . . . . . . . . . . . . . . . 54 RESULT Values for Transaction Declines or Errors . . . . . . . . . . . . . . . . . . . 55 RESULT Values for Communications Errors . . . . . . . . . . . . . . . . . . . . . . 60 Index. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63 Payflow ACH Payment Service Guide 5 Contents 6 Payflow ACH Payment Service Guide 1 Signing Up for Payflow ACH Payment Service IMPORTANT:Be sure to read the steps involving account setup even if you are already enrolled for a Payflow ACH Payment account. The Payflow ACH Payment Service enables you to process payments through the ACH network, allowing you to request a credit or debit from a customer’s checking or savings account at a low transaction cost. You can use existing depository financial institution relationships to accept ACH payments from customers. NOTE:Remember that you are responsible for obtaining authorization for an ACH payment from your customers and for managing customer enrollment, payment actions (for example, making changes to amounts/dates), and payment responses (for example, notifying customers for insufficient funds or other returns). In This Chapter “How To Sign Up” on page 7  “Retrying Return Payments” on page 10  How To Sign Up Follow these steps to sign up for Payflow ACH Payment: Step 1 Contact PayPal Contact your PayPal Sales Representative at the following URL: http://www.paypal.com/cgi-bin/webscr?cmd=_merchant-outside Step 2 Submit an application Complete and submit a Payflow ACH Payment application. You receive confirmation of approval within two to three weeks. Step 3 Work with your Account Representative to set your account’s banking requirements Upon approval and agreement on Payflow ACH Payment account limits for Credits and Debit/Sales, you work with your Account Representative to agree on banking requirements. Step 4 Work with your Account Representative to configure your account’s payment format Your account can be configured to support either Business-to-Business or Business-to-Consumer payment formats. Payflow ACH Payment Service Guide 7 Signing Up for Payflow ACH Payment Service 1 How To Sign Up NOTE:To support both payment formats, you must register for a separate Payflow ACH Payment account for each format. Business-to-Business Payment Format Account Business-to-Business format accounts support payments for which the target bank account belongs to a business. These Cash Concentration or Disbursement (CCD) payments are authorized in a paper transaction with offline authorization. Businesses can dispute that they authorized a CCD payment for 48 hours. Business-to-Business format is also known as B2B. Business-to-Consumer Payment Format Account Business-to-Consumer format accounts support payments for which the target bank account belongs to a consumer. Consumers can dispute that they authorized a payment (resulting in a return) for up to 60 days. Business-to-Consumer format is also known as B2C. Business-to-Consumer format accounts allow the following payment types: Paper check payment types. ARC: Accounts Receivable Entry — Convert a single check received by US mail or by  drop-box into an electronic Debit/Sale. Because you must obtain the ABA routing number, account number, and check serial number from the check using a check reader device, you can submit ARC payments only using the Payflow Pro SDK and not from PayPal Manager. See “Summary of ARC Requirements” on page 18 for other requirements. POP: Point-of-Purchase Entry — Single-entry Debit/Sale for purchase made in person at  the point-of-purchase. Because you must obtain the ABA routing number, account number, and check serial number from the check using a check reader device, you can submit POP payments only using the Payflow Pro SDK and not from PayPal Manager. See “Summary of POP Requirements” on page 19 for other requirements. RCK: Re-Presented Check Entry — Re-present a returned check into an electronic debit.  RCK payments have a payment limit of $2500 and can be retried only once. See “Summary of RCK Requirements” on page 21 for other requirements. Electronic check payment types. TEL: Telephone-Initiated Entry — Single-entry Debit/Sale with verbal telephone  authorization by the consumer. See “Summary of TEL Requirements” on page 22 for other requirements. WEB: Internet-Initiated entry — Single-entry Debit/Sale with authorization by the  consumer over the Internet. Additionally, you can perform referenced credits for the same amount as the original Debit/Sale amount. In accordance with NACHA regulations, you must specify that authorization for payment was received through the Internet. This option is described in Table 5.1, “Manual ACH Payments page fields” on page 33. Other payment type. PPD: Prearranged Payment and Deposit Entry (PPD) payments. Use PPD when the  payment is: – An independent credit. 8 Payflow ACH Payment Service Guide Signing Up for Payflow ACH Payment Service 1 How To Sign Up – A recurring Debit/Sale payment and authorization is not provided over the Internet. – A Business-to-Consumer Debit/Sale payment and authorization is not provided over the Internet or over the telephone or it is not a reprocessed check. Step 5 Work with your Account Representative to configure your account’s transaction preferences You can specify the following settings for your Payflow ACH Payment account: Processing Limits and Posting Days ACH Credit processing limit: The aggregate Credit transaction amount to allow for any  single settlement period. ACH Credit posting days. The number of days for which PayPal holds the funds. Typically  three days. ACH Debit/Sale processing limit. The aggregate Debit/Sale transaction amount to allow  for any single settlement period. ACH Debit/Sale posting days. The number of days for which PayPal holds the funds.  Typically three days. ACH Transaction Settings These settings enable you to configure transaction limits that enhance your Payflow ACH Payment account’s security. (These settings are separate from your credit card transaction settings.) Maximum Amount for ACH debits. (Default setting: unlimited) Specify the maximum  amount to allow per single payment. Maximum Amount for ACH credits. (Default setting: unlimited) Specify the maximum  amount to allow for credit payments. Specify 0 (zero) to disable credit payments for your Payflow ACH Payment account. Allow non-reference ACH credits. (Default setting: Yes) You can specify whether to  require that credits must reference a previous Debit/Sale payment. Specify No to permit ACH credits only against previous payments. Specify Yes to allow any credit payment to be processed. If you specify Yes for this option, then you cannot specify No for the Credits that may exceed the original payment amount option. Allow ACH credit amount to be greater than original amount. (Default setting: Yes) If you  specified that you do not allow non-referenced credits, you can specify whether credits can exceed their original amount. Specify No to require that the credit amount may not exceed the original payment amount. Specify Yes to allow any credit amount up to the limit established for the Payflow ACH Payment account. If you specify No for this option, then you cannot specify Yes for the Allow Non-reference ACH Credits option. Payflow ACH Payment Service Guide 9 Signing Up for Payflow ACH Payment Service 1 Retrying Return Payments Retrying Return Payments To help you manage returns, specify whether you want PayPal to retry payments that result in either of the following return types: Insufficient funds, Result code R01. The available and/or cash reserve balance is not  sufficient to cover the dollar value of the debit entry. Uncollected funds, Result code R09. Sufficient book or ledger balance exists to satisfy  the dollar value of the transaction, but the dollar value of transactions in the process of collection (uncollected checks) brings the available and/or cash reserve balance below the dollar value of the debit entry. Specify 0 to disallow retries. Specify 1 to enable PayPal to retry the payment once. Specify 2 to enable PayPal to retry the payment up to two times. NOTE:Credit payments are never retried. For RCK payments, one retry maximum is performed when the retry setting is 1 or 2. You also specify the retry interval (between 1 and 7 banking days) between receiving NSF returns and retrying the payment. Step 6 Work with your Account Representative to set your account’s service levels PayPal offers a variety of service agreements to suit your business requirements. Step 7 Sign a Payflow ACH Payment Services agreement Once you agree on banking requirements, Payflow ACH Payment account configuration, and service levels, you sign your Payflow ACH Payment Services agreement. You can now begin to use your Payflow ACH Payment account to collect payments. 10 Payflow ACH Payment Service Guide