Check Processing

R50 ACH Return Code: State Law Affecting RCK Acceptance

graphic of a man looking at a screen that shows a warning sign due to a r50 return code.

Received ACH return code R50? Don’t despair; PaymentCloud has you covered there!

Automated Clearing House (ACH) payments are among the quickest ways to transfer funds from one account to another. These payments are almost always successful, but in the event of a transfer rejection, a return code indicating the reason for the rejection generates.

With over 80 different ACH return codes, it’s difficult to know off the top of your head what each one means. Read below to find out what ACH return code R50 means, its formal definition, and possible solutions.

What Does ACH Return Code R50 Mean?

An ACH transfer is an electronic fund transfer (EFT) processed through the ACH Network, which acts as an intermediary between financial institutions like the RDFI and ODFI. The Originating Depository Financial Institution (ODFI) is the financial institution that initiates an ACH transfer on behalf of its client. Meanwhile, the Receiving Depository Financial Institution (RDFI) is the financial institution that responds to the ACH transfer request.

Now that we’ve established a cursory understanding of ACH payment, let’s dig into ACH return code R50! This specific return code typically generates due to one of two scenarios:

  1. The RDFI is in a state that hasn’t adopted the Uniform Commercial Code (a set of laws governing commercial transactions) and doesn’t allow digital payments.
  2. The RDFI is in a state where you need to return all canceled checks to the consumer within a certain period.

Both scenarios are related to governing laws beyond your control. However, it should also be noted that this return code commonly shows up when the routing number is input incorrectly.

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Formal definition

The formal definition for the R50 return code is as follows:

“The RDFI is located in a state that has not adopted Revised Article 4 of the UCC (1990 official text) and has not revised its customer agreement to allow for electronic presentment or the RDFI is located within a state that requires all canceled checks to a specific type of account to be returned to the receiver within the periodic statement.”

Solutions to Fix R50 Return Code

To resolve an ACH return code R50, check that you’ve entered the correct routing number for the other party. A misrouted ACH transfer can produce this return code. If your routing number is correct, it’s likely that this code refers to government regulations in the RDFI’s state. To resolve the code in a manner that complies with state law, you should contact your customer, their bank, or your bank to inquire about potential payment options in compliance with state regulations.

ACH return code R50 can be especially frustrating for merchants, as they must adhere to government regulations. However, the occurrence of ACH return code R50 is rare. Typically, ACH payments process quickly, securely, and seamlessly—which is why so many merchants happily accept ACH payments within their operations!

graphic of a digital check used for ACH payment processing after receiving ach return code r50

Offer your customers a simpler method to pay with ACH!

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