R23

What Is ACH Return Code R23?

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 R23, also known as "Credit Entry Refused by Receiver," is a standardized code used in Automated Clearing House (ACH) transactions. This code indicates that the account holder or RDFI has refused to accept a credit entry transaction.

How To Address ACH Return Code R23

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.

When an ACH transaction is returned with R23, it means that the receiver of the transaction has explicitly declined the incoming credit. This refusal could come for a variety of reasons including:

• Not expecting the transaction or funds
• The amount of the credit is incorrect (either less or more than expected)
• Not recognizing the originator of the transaction
• Accepting the payment will result in an overpayment of the account
• The receiver cannot accept the credit due to the account being currently subject to litigation
• The account has not been authorized to receive credits

The RDFI must transmit R23 immediately upon receipt of refusal.

If you encounter R23, the best course of action is to contact the individual or business you are attempting to credit to better understand the underlying issue with the transaction.

What Is An ACH Return Code?

ACH return codes identify the reason an ACH payment was returned by the recipient's bank. They make it easier for originating and receiving financial institutions to spot and communicate payment failures. Each code begins with 'R' followed by a two digit number. ACH return codes are standardized and maintained by NACHA, the governing body for the ACH network.