CCD Transaction Authorization

A CCD entry allows a merchant to debit or credit a business-to-business transaction.

In this article, you will learn:

What is a CCD Authorization?

What must be included in a CCD Authorization?

The Best Practices for obtaining a CCD Authorization

Sample CCD Authorization forms

What to do after collecting CCD Authorizations?

Other important things you should know about CCD Authorization

What is a CCD Authorization?

A CCD (Corporate Credit or Debit) entry allows you (the merchant) to process business-to-business credit or debit transactions. The CCD entry class code should be used for any transactions processed for a business checking, business savings, or general ledger account.  (For non-corporate customers, see PPD, TEL, or WEB Authorizations)

You must collect authorization from your business customers before processing an ACH credit/debit transaction.

• CCD transactions can be either buyer-initiated or seller-initiated (i.e., accounts payable, accounts receivable, etc.)
• CCD can also be used by a company to move funds from outlying locations to a central bank account.

What must be included in a CCD Authorization?

You must enter an agreement that complies with applicable legal requirements with each business customer. The nature of the agreement for corporate transactions can vary depending on the relationship between the two businesses; however, all agreements should have the following items at a minimum:

• The corporate customer has agreed to be bound by the Nacha Operating Rules.
• The customer has confirmed that its business bank account is enabled for ACH.

In general, all authorizations should also include the following:

• Language clearly stating whether the authorization is for a one-time payment, a recurring payment, or for one or more subsequent payments initiated under the terms of a standing authorization.
• Amount of transaction(s) or a reference to the method of determining the amount of the transaction(s)
• Timing of the transactions, including the start date, number of payments, and frequency of transactions
• Customer's name or identity
• Bank account to be debited, including type of account (i.e., checking, savings, etc.)
• Date of the customer's authorization
• Language that instructs the customer on how to revoke the authorization directly with the merchant. This should include the time and manner the customer must communicate the revocation to the merchant. For a one-time payment, the right of the customer to revoke authorization must give the merchant a reasonable opportunity to act on the revocation prior to initiating the transaction.

The Best Practices for obtaining CCD Authorization:

• The authorization must be readily identifiable as an authorization and have clear and readily understandable terms.
• You can modify one of the following templates to suit your business needs:
  Sample CCD Authorization Form - One-time Transaction
  Sample CCD Authorization Form - Overriding Agreement
  Sample CCD Authorization Form - Recurring Transaction

What to do after collecting CCD Authorization?

You are required to keep a copy of the authorization you receive and be able to provide it in a timely manner if proof of the authorization is requested by the bank. If asked for proof of authorization, you will need to provide:

• A copy of the signed, written authorization

Single, one-time transactions: Retain a copy of the authorization for 2 years from the date of the authorization.

Recurring transactions: Retain a copy of the authorization for 2 years from the last payment date (termination) or from the date the customer cancelled the authorization (revocation of authorization).

Other important things you should know about CCD Authorization:

• The return timeframe is much shorter for CCD transactions as compared to the authorization types used with business-to-consumer transactions. While a consumer has 60 days to dispute a PPD, TEL, or WEB transaction, a corporate customer only has 2 days. Using CCD correctly for business bank accounts reduces the risk of disputes for the merchant. 
• Nacha requires that the Company Name be included in the transaction details for CCD debit or credit transactions.