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If an Automated Clearing House (ACH) payment is denied, a return code, such as ACH return code R28, generates. This specific code, tiny as it may seem, communicates what went wrong with the payment. Currently, there are over 80 different ACH return codes, each of which communicates why an ACH payment stalled. A general familiarity with ACH return codes helps your organization run more effectively.
Before learning more about ACH return code R28, it’s important to understand ACH payments. ACH payments are a type of electronic funds transfers (EFT). Specifically, they’re bank-to-bank transfers. These transactions are processed through the Automated Clearing House Network, which serves financial institutions in the United States.
An Originating Depository Financial Institution (ODFI) originates depository payment transactions. The majority of large banks are authorized as ODFIs for processing ODFI transactions. ODFIs may also include third-party processors, such as payment gateways.
The Receiving Depository Financial Institution (RDFI) accepts direct and indirect entries for crediting and debiting accounts on the customer’s behalf. To receive an ACH transaction, financial institutions, such as banks and third-party payment processors, are approved as RDFIs.
Now that you understand the mechanisms behind ACH transactions, we’ll explore the mechanisms behind failed ACH transactions. Specifically, failed ACH transactions generating ACH return code R28.
What Does ACH Return Code R28 Mean?
ACH return code R28 means the routing number on the entry is incorrect or a digit is wrong. This error causes the return of the payment.
Formal definition
Specifically, ACH return code R28 generates because the routing number was entered incorrectly. Typically, you can find the American Bankers’ Association (ABA) routing number at the bottom left-hand corner of a check. Nine digits make up a routing number. Each routing number is unique. This uniqueness is purposeful, as routing numbers identify specific financial institutions.
Routing numbers work in collaboration with account numbers, located to the right of the routing number. Account numbers are typically eight to 12 digits. Essentially, the routing number communicates the specific banking institution and the account number communicates the specific account at the banking institution.
That said, one incorrect digit in the routing or account numbers will likely halt an ACH transaction, as it will be unclear which account should be credited or debited. ACH return code R28 generates in this event.
Solutions to Fix an R28 Return Code
After an ACH operator receives a request, they may determine the routing number is incorrect. At this point, the ACH payment returns with ACH return code R28. If this happens, carefully read the routing number. If there’s an error, correct the entry and reprocess the payment. In the event that there doesn’t appear to be an error, contact your customer to ensure you have their accurate and up-to-date banking information.
Generally, an ACH return processes in about two business days. It’s important to correct and resubmit the transaction upon receipt of the return error. This ensures the transaction processes in a timely manner and doesn’t impact your cash flow.
Final Thoughts
To avoid ACH return code R28, check, double-check that you’ve correctly entered the routing number. Also, take note that most smaller banks only have one routing number. Meanwhile, larger banks may have more than one routing number, as they cover certain states and regions.
All in all, ACH return code R28 is very easy to fix, as are most ACH return code errors. Don’t let your fear of ACH return codes stop you from accepting ACH payments at your business, as they’re one of the quickest, simplest, most cost-effective payment method options available today.
