On September 16, 2022, Nacha released a new rule that will define and standardize practices and formatting of Micro-Entries, which are used by some ACH Originators as a method of account validation.
The new Micro-Entries Rule will accomplish the following:
- Define “Micro-Entries” as ACH credits of less than $1 and any offsetting ACH debits, used for the purpose of verifying a Receiver’s account
- Standardize the Company Entry Description and Company Name requirements for Micro-Entries
- Establish other Micro-Entry origination practices
- Apply risk management requirements to the origination of Micro-Entries
The rule will become effective in two phases. The first phase becomes effective September 16, 2022, and the term Micro-Entry will be defined, and Originators will be required to use the standard Company Entry Description and follow other origination practices. The second phase will become effective March 17, 2023, and Originators of Micro-Entries will be required to use commercially reasonable fraud detection, including the monitoring of Micro-Entry forward and return volumes.
To view more information regarding the details of this new rule and to determine its possible benefits and impact, please visit this link.