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An Automated Clearing House (ACH) payment could fail for a number of reasons, such as insufficient funds, revoked authorization, or errors in the account number. In fact, there are over 85 different reasons an ACH payment may fail. For a comprehensive list of the many reasons an ACH payment may fail, check out our ACH Return Codes: The Complete List.
When an ACH payment fails, it produces an ACH return code, which indicates what caused the payment failure. One such code is ACH return code R30. If you’ve received ACH return code R30, read on to find out why you received this code and how to fix the underlying problem producing it.
What Does ACH Return Code R30 Mean?
ACH return code R30 indicates an ACH payment rejection due to a problem with the RDFI. To illustrate what this means, we’ll explain the ACH payment processing in greater detail.
ACH payments are a type of electronic funds transfer. The ACH Network connects participating financial institutions in the United States to process these electronic funds transfers quickly, without physical checks. To initiate a payment through the ACH Network, the Originating Depository Financial Institution (ODFI) submits an ACH payment request. Meanwhile, the Receiving Depository Financial Institution (RDFI) is the financial institution from which the ODFI debits money in payment transactions. In return transactions, the ODFI credits money to the RDFI.
The National Automated Clearing House Association (NACHA) governs the ACH Network, rejecting ACH payments that do not meet its standards. When NACHA rejects an ACH payment, an alphanumeric code generates. This is the ACH return code.
In the event of ACH return code R30, the RDFI is not a participant in the check truncation program, thus NACHA rejected this ACH payment because the RDFI cannot process a payment without a physical check.
Formal definition
The formal definition of ACH return code R30 is as follows:
The RDFI doesn’t participate in a check truncation program.[1]Modern Treasury. “ACH Return Codes“. Accessed March 18, 2022.
What is a check truncation program?
The check truncation program makes it possible to clear a check electronically, without the physical paper check.
Solutions to Fix R30 Return Code
While the ODFI and RDFI facilitate ACH payments, it’s not their responsibility to troubleshoot any returned transactions. Your financial institution may help you with the issue, but ultimately it’s up to you, as the merchant, to solve the issue that produced it.
In the particular case of return code R30, your customers’ bank does not participate in the automated check safekeeping application necessary to complete an ACH transaction. A solution to this problem is to ask your customer for another form of payment, be it an account at another banking institution for another ACH payment attempt, credit or debit card, cash, or physical check.
While coming across ACH return code R30 can be frustrating, returns are rare. And because ACH payments are generally a reliable, quick payment method, especially for recurring payments, you shouldn’t let return code frustrations keep you from all the benefits that accepting ACH payments can bring to your business.
