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ACH SEC Codes Glossary

An SEC code is a three letter code that describes how an ACH payment was authorized by the consumer or business receiving an ACH transaction. SEC stands for ‘Standard Entry Class’. SEC codes are defined and maintained by NACHA, the governing body for the ACH network.

For instance, when your monthly utility bill is debited from your account, it will be labeled with the SEC code PPD, which stands for ‘Prearranged Payment and Deposit Entry’. Some banks may also display this code on your bank statement. All ACH payments are required to include a SEC code, whether it is an ACH credit or ACH debit. Since these codes are typically tailored to specific use cases, most companies only utilize a limited range of SEC codes in their payment transactions.  Here, are the most commonly used ACH SEC codes.

1. CCD (Corporate Credit or Debit)

The CCD SEC code is commonly used for business-to-business transactions. It is typically used for payments such as vendor invoices, payroll direct deposits, and business-to-business transfers. CCD transactions are typically accompanied by detailed remittance information, allowing businesses to include additional information along with the payment.

2. PPD (Prearranged Payment and Deposit)

The PPD SEC code is commonly used for consumer transactions, such as direct deposits and bill payments. PPD transactions are initiated by consumers and can be recurring or one-time payments. For example, when employees receive their salaries through direct deposit, the PPD code is used to process the transaction.

3. WEB (Internet-Initiated Entry)

The WEB SEC code is used for consumer payments initiated through the internet. This code is commonly used for online bill payments, online purchases, and electronic fund transfers initiated by consumers. It is important to note that the use of the WEB code implies consumer authorization for the transaction.

4. ARC (Accounts Receivable Entry)

The ARC SEC code is used for converting paper checks received by mail into electronic ACH payments. This code is commonly used by businesses that process large volumes of checks received as payments. By converting paper checks into electronic payments, businesses can improve their cash flow and reduce the time and cost associated with check processing.

5. POP (Point of Purchase Entry)

The POP SEC code is used for processing electronic payments made at the point of sale. This code is commonly used by merchants and retailers to facilitate electronic fund transfers for purchases made in-store. POP transactions are typically authorized using a consumer’s check, which is then converted into an electronic payment.

A complete glossary of all ACH SEC Codes follows below.

ACH SEC Codes Glossary