This ACH return code indicates that the transaction was attempted on a non-transaction account that doesn't allow ACH debits or credits. These accounts are typically savings accounts, money market accounts, or other deposit accounts with regulatory restrictions on electronic transactions. Unlike checking accounts, these account types are not designed for regular transaction activity.
Error message: "The ACH Entry destined for a non-transaction account, for example, an account against which transactions are prohibited or limited."
What Causes ACH Return Code R20?
The R20 ACH return code means "Non-Transaction Account" and indicates that the receiving account is not designed or authorized to process ACH transactions. This typically occurs when someone provides a savings account, money market account, or other restricted account type instead of a checking account for ACH payments.
Non-transaction accounts are often governed by regulations like Regulation D, which limits certain types of withdrawals and transfers from savings accounts. Banks also implement their own policies that restrict electronic transactions on specific account types to comply with federal regulations and manage risk. When an ACH transaction is attempted on these accounts, the receiving bank returns it with an R20 code.
Can You Retry R20 Payments?
You cannot retry R20 payments using the same account, as the account type itself prevents ACH processing. You must contact the customer to obtain information for a different account that allows ACH transactions, typically a checking account, or arrange for an alternative payment method.
How to Respond to an R20 Code
An R20 return requires contacting the customer to obtain different account information since the current account type cannot process ACH transactions.
When Your Customer's Payment Fails
- Contact Customer Immediately
Explain that their account type doesn't allow ACH transactions and you need different account information. - Request Checking Account Details
Ask for their checking account information, which is designed for electronic transactions. - Verify Account Type
Confirm the new account is suitable for ACH processing before attempting another transaction. - Consider Alternative Payment Methods
If they don't have a checking account, offer credit card, wire transfer, or check payment options.
Subject: Payment Account Type Issue - Alternative Needed
Hi [Customer Name],
We were unable to process your recent payment because the account you provided (likely a savings account) doesn't allow electronic ACH transactions.
To complete your payment, we'll need your checking account information instead, as checking accounts are designed for electronic payments like this. Alternatively, we can process your payment via credit card or another method if you prefer.
Please reply with your checking account details or let us know your preferred alternative payment method, and we'll process your payment right away.
Thanks,
[Your Company Name]
When Your Payment to Vendors Fails
An R20 return on vendor payments means the vendor provided account information for a non-transaction account. You'll need to contact them for different account details that can accept ACH payments.
- Contact the vendor to explain that their account type doesn't allow ACH transactions
- Request their checking account information or business transaction account details
- Verify the new account type can process ACH payments before resubmitting
- Consider alternative payment methods like wire transfers or checks if ACH isn't available
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