The ARC Standard Entry Classification (SEC) allows for a single entry ACH debit transaction to convert a consumer check received via the mail or at a drop box location for the payment of goods and services.
For more information regarding ACH, refer to About ACH Payments.
The ARC entry is subject to NACHA operating rules, the Electronic Funds Transfer Act and Regulation E. You are required to use a reader device to capture the MICR line (routing number, account number and check serial number of the source document and key in the amount.
An item must comply to the following, if the item is to be eligible as an ARC entry:
The check has been received through the mail or drop box location.
You are to have provided notice to the customer that on receipt of the check, the check will be used as a source document for an ACH debit transaction.
You must retain an image, microfilm or other copy of the front and back of the source document for a period of two years from the Settlement date of the entry.
The following format requirements are required to process ARC entries:
The original payee name is to appear in the Company Name Field of the Company/Batch header.
Check serial number is placed in the Check Serial Number field.
Individual name is optional for the Individual Name Field, but if the field is used, the field can only be used to either:
The consumer’s name or; A reference number, identification number or code that you use to identify a particular transaction. A generic description is not acceptable.
Information that appears on this page is taken from ACH Compliance Manual: How to Comply with ACH-Related Rules and Regulations, copyright 2003 by NACHA, Electronic Funds Transfer Act, Regulation E, Uniform Commercial Code, and Federal Reserve Regulation CC.