An ACH (Automated Clearing House) Authorization Form is a document that allows a business to debit or credit a customer’s bank account electronically. This process is commonly used for recurring payments, such as subscription fees or utility bills, as well as one-time transactions.
A sample ACH authorization form can be found here. Please Make sure to fill out your business information at the top of the form, in the authroization statement and add your contact information in the important note.
Here’s a step-by-step guide to using an ACH Authorization Form effectively:
1. Understand the purpose of the form
The ACH Authorization Form ensures compliance with banking regulations while protecting both the business and the customer. By signing the form, the customer consents to electronic transactions, which may include:
- Recurring payments (e.g., monthly jobs).
- One-time payments (e.g., a single purchase)
2. Gather the necessary information
To complete the form, you’ll need the following details:
3. Fill out the form
Provide clear instructions to your customers or clients on how to fill out the form:
- Complete all required fields to ensure accuracy.
- Mark the appropriate boxes to specify the type of transaction (one-time or recurring).
- Include the start date and, if applicable, the frequency for recurring payments.
4. Obtain a signature
The authorization is not valid without the account holder's signature. The signature confirms that the customer consents to the specified electronic transactions. Make sure the form includes a date alongside the signature for record-keeping purposes.
5. Store the form securely
Once the form is completed, store it securely to protect sensitive customer information. It’s important to:
- Comply with data protection laws, such as GDPR or CCPA, if applicable.
- Use encrypted digital storage if forms are submitted electronically.
- Retain the form for the duration required by banking and business regulations.
6. Initiate the transaction
Using the information provided on the form, initiate the ACH transaction through ServiceCore. Verify all details before submitting the payment to avoid errors.
7. Handle changes or cancellations
If a customer wishes to update or cancel their authorization, they must provide written notice. Include instructions for how customers can submit changes, such as contacting customer service or submitting a new form.
8. Communicate clearly with customers
Be transparent about:
- When the payments will occur (e.g., on the 1st of every month).
- How much will be debited from their account.
- Any fees or penalties for insufficient funds.
Frequently Asked Questions
Q: Is a physical signature required, or can the form be signed electronically?
A: An electronic signature is valid as long as it complies with e-signature laws, such as the ESIGN Act in the United States.
Q: How long is an ACH authorization valid?
A: For recurring payments, the authorization remains valid until the customer cancels it in writing. For one-time payments, it is valid until the transaction is completed.
Using an ACH Authorization Form is a straightforward way to streamline payments while ensuring compliance and security. If you have additional questions, feel free to contact our support team at servicecorepay@servicecore.com