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R21 ACH Return Code: Invalid Company Identification

woman typing on laptop researching ach return code R21

As you accept ACH payments, you may receive a return from time to time. Understanding the cause of an ACH return helps you find solutions to complete the payment. Below, we discuss what an ACH return is, how they work, and what ACH return code R21 means. By the end, you’ll have a solid understanding of what went wrong with your transaction and how to fix it.

If you’ve come across a different ACH return code, we have a full list of decline codes to better troubleshoot your transaction.

What Is an ACH Return?

Before defining an ACH return, let’s discuss what ACH payments are. An ACH transaction is a type of electronic funds transfer (EFT) processed over the Automated Clearing House (ACH) network. This is the network between banks that allows them to quickly and efficiently process payments. Common examples of ACH transactions include online recurring payments for utilities and payroll direct deposits.

An ACH return, therefore, is the name for an electronic bank-to-bank transaction that failed for one reason or another. When you process a transaction over the ACH network, your bank initially funds the request and you see a deposit into your account. Your bank then attempts to collect from your customer’s bank account. If they are successful, the money remains in your account. If they are unsuccessful, you will see the money withdrawn from your account.

With each ACH return, you receive a three-character code describing the nature of the return. If you know how to use it, this code will ultimately help you collect the funds.

woman typing on laptop researching ach return code R21

What does ACH Return Code R21 Mean?

ACH return code R21 means that the company ID entered in the Company Identification field was invalid. Most frequently caused by a miskeyed entry, this is not an issue with the customer’s bank account itself.

The most common type of transaction that will receive an R21 ACH return code is a customer-initiated payment to your business from an online portal.

Formal definition

The formal definition for the R21 ACH return code is as follows: The identification number used in the company identification field is not valid. This return reason code is generally used on customer-initiated entry (CIE) transactions.

Solutions to Fix R21 Return Code

To fix the R21 return code, you’ll need to contact your customer. Here are some potential solutions to ensure you receive the funds owed to your business:

  • Contact your customer, explain why the transaction declined, and request they try the transaction again.
  • Request an alternative payment method, such as a debit or credit card, to complete the payment on your end.
  • Suggest they attempt using a different bank account if they’re positive the information they entered was correct.


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