2009

Payflow ACH Payment Service Guide 17
3
Summary of Authorization
Requirements
Before submitting an ACH payment, you must first obtain authorization from the customer to
debit their bank account for the amount due.
The following summary of authorization and other requirements is abstracted from ACH
Compliance Manual: How to Comply with ACH-Related Rules and Regulations, copyrighted
2003 by NACHA, and available from NACHA at
www.nacha.org.
The purpose of this chapter is not to replace your research into NACHA regulations, but to
provide a basis of understanding.
Summary of CCD and PPD Authorization Requirements
Before you submit an ACH Payment to PayPal, you are required to receive full authorization
from the customer for the payment.
CCD and PPD Debit Authorization
For CCD or PPD payments, the requirements of NACHA are in line with the Regulation E
requirements of the Federal Reserve Board. You should be aware, however, that NACHA’s
rules apply to authorizations for both one-off and recurring transactions, while Regulation E
covers only authorizations for recurring transactions.
When obtaining authorization for payment, include the following key items:
z A payment cannot be revoked by the customer unless you (the merchant) have first been
notified.
z Specify the manner in which a customer can revoke payment.
Format of CCD and PPD Authorization
z Authorization for the transaction either can be in writing or can be displayed electronically.
z The customer needs to sign the authorization either physically or digitally. Regulation E
provides information on the requirements for authorization with digital signature.
z The Authorization must contain evidence of the customer’s identity.
z You must provide the customer a copy of the authorization (either electronic or hardcopy).