What Causes ACH Return Code R85?

The R85 ACH return code means "Incorrectly Coded Outbound International Payment" and indicates that an international payment transaction has been identified correctly as outbound international but uses the wrong Standard Entry Class (SEC) code that lacks information required for OFAC (Office of Foreign Assets Control) compliance. This return code is exclusively used for International ACH Transactions that should use the "IAT" SEC code but were processed with domestic codes instead.

International ACH Transactions require specific SEC codes and additional data elements to comply with U.S. Treasury Department regulations and anti-money laundering requirements. When a payment is identified as international but coded with domestic SEC codes that don't include necessary OFAC compliance information, the gateway operator returns the transaction to ensure proper regulatory compliance and prevent potential violations.

Can You Retry R85 Payments?

You can retry R85 payments after correcting the SEC code to properly identify the transaction as an International ACH Transaction (IAT). Contact your bank to update the coding with the correct IAT SEC code and ensure all required OFAC compliance information is included before resubmitting.

How to Respond to an R85 Code

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An R85 return indicates incorrect SEC coding for international payments, requiring immediate contact with your bank to update the transaction with the proper IAT SEC code and OFAC compliance information.

When Your International Payment Fails

• Contact Your Bank Immediately
  Reach out to your ODFI to report the SEC code error on the international ACH transaction.
• Provide Transaction Details
  Give your bank all relevant transaction information so they can locate and correct the coding issue.
• Request IAT SEC Code Update
  Ask them to reprocess the payment using the correct International ACH Transaction SEC code.
• Verify OFAC Compliance
  Ensure all required compliance information is included in the corrected transaction.

When Your International Vendor Payment Fails

An R85 return on international vendor payments indicates systemic coding issues that may affect other international transactions, requiring immediate attention to prevent compliance violations and payment delays.

1. Contact your bank immediately to correct the SEC code error for the vendor payment
2. Review other international payments to ensure proper IAT coding is being used
3. Notify affected international vendors about the compliance-related delay
4. Update your payment processing procedures to ensure all international payments use proper IAT SEC codes