R03

What Is ACH Return Code R03?

ACH return codes are used to identify the reason an ACH payment has been returned by the recipient's bank. They make it easier for originating and receiving financial institutions to spot and communicate payment failures.

ACH Return Code R03, commonly referred to as "No Bank Account/Unable to Locate Account," is a standard code used in Automated Clearing House (ACH) transactions to signify that the specified bank account could not be found or does not exist.

In a lot of cases, Return Code R03 is the result of a typo in the account number or routing number attached to the payment. R03 can also result from an error in the spelling of the account holder’s first or last name, so it is important to double check that all the information is entered correctly in your ACH transfer details.

How To Address ACH Return Code R03

Nacha prescribes separate rules for handling each return code since each one represents a unique scenario. ODFIs (Originating Depository Financial Institutions) and RDFIs (Receiving Depository Financial Institutions) are responsible for handling ACH return codes according to these rules.

For example, if your business is attempting to initiate an ACH debit for $100, but you have incorrectly entered your customer’s bank routing number, the bank would return the transaction with code R03. The customer’s bank must return the transaction with code R03 within 2 banking days.

One of the best ways to avoid return code R03 is to ensure that the routing, account, and customer information is entered correctly before initiating the transaction. If all the information is correct and you still encounter R03, then the next course of action is to reach out to your customer directly to have them verify the information or provide updated information for a new transaction.