Lithic enables our customers to receive and initiate ACH originations with the following features:

Next-Day ACH: Lithic has access to all six ACH windows, enabling us to process next-day ACH on non-holiday weekdays
Same Day ACH support: Lithic also supports same-day ACH transactions on non-holiday weekdays.
Frequent ACH uploads: Lithic uploads ACH files to the ACH network every hour; we are not limited to upload schedules of partner banks or other intermediaries who may only upload once or twice a day
Fast ACH postings: Lithic receives ACH receipts directly from the ACH network six times a day instead of through an intermediary bank or third party. We process these receipts immediately and update balances based on the instructions in the file. In some cases, the ACH network or the sender may forward date a receipt, in which case Lithic will post the ACH transaction as pending before clearing it as settled on the settlement date specified by the file. This often happens when a same-day ACH misses a bank's cutoff and is sent to Lithic as a next-day ACH
Customizable ACH files: Lithic directly generates ACH files, enabling us to customize certain ACH fields such as transaction description and company id

To get started on ACH, customers can provide their Financial Account's routing number and bank account number to receive ACH transactions or use the Payments API to originate ACH transactions. ACH receipts and credit originations are immediately posted to the available balance of Financial Accounts. ACH debit originations are posted to the pending balance of Financial Accounts and are then released to the available balance. See more on balance updates in ACH Payment Lifecycle

Customers can work with their implementation manager to set a 1-4 day hold on ACH debits to control when funds are released. By default, funds are held for 2 days.

Please note that currently, Lithic does not support cancelling an ACH payment after it's been originated.

ACH Settlement Times

ACH Originations/Receipts at Lithic will follow the FedACH processing schedule for any ACH with Lithic Accounts. This means:

Same Day Originations

Processed By Time	Settlement Time	Release Time (Debits only)
10:30 AM ET (on T)	1:00 PM ET (on T)	1:00 PM ET (on T+2)
2:45 PM ET (on T)	5:00 PM ET (on T)	5:00 PM ET (on T+2)
4:45 PM ET (on T)	6:00 PM ET (on T)	6:00 PM ET (on T+2)

Note: Same Day Originations must be received by 4:15 PM ET in order to be processed by the 4:45 PM ET window.

Next Day Originations

Processed By Time	Settlement Time	Release Time (Debits only)
Before 2:15 AM ET (on T)	8:30 AM ET (on T)	8:30 AM ET (on T+2)
After 2:15 AM ET (on T)	8:30 AM ET (on T+1)	8:30 AM ET (on T+3)

Note: Next Day Originations must be received by 1:45 AM ET in order to be processed by the 2:15 AM ET window.

Receipts

Receipts will follow the same schedule as above, but the timing will be dependent on when the Originating Depository Financial Institution submitted the ACH for processing and Lithic has received the ACH entry.

SEC Codes

The Standard Entry Class (SEC) code is a three-letter code that identifies the type of ACH entry being made. It’s a required field used to classify transfers by their purpose or intended use. The full list of codes is maintained by NACHA, but at Lithic we offer the following:

Code	Description	RDFI Bank Account Type
PPD	Prearranged Payment and Deposit	Consumer
CCD	Corporate Credit or Debit Entry	Non-Consumer
WEB	Internet Initiated/Mobile Entry	Consumer

It's important to use the correct SEC code, as ACH payments can be returned if the improper SEC code is used. Consumer vs Non-Consumer payments also impact how the RDFI can process a return.

ACH Return Reasons

When an ACH origination is returned by either the receiving bank or the receiver, Lithic also receives a reason return code that describes the reason for the return. These codes are also maintained by NACHA.

The table below lists the most common return reason codes, a description of each code, the types of bank accounts that can submit this return, and how many days the receiving bank / the receiver has to submit the return.

Return Reason Code	Description	RDFI Bank Account Type	Time Frame
R01	Insufficient funds. The receiver does not have sufficient available balance to cover the ACH debit origination	Consumer or Non-Consumer	2 Banking Days
R02	Account closed. A previously active account has been closed by either the receiver or the receiving bank	Consumer or Non-Consumer	2 Banking Days
R03	No account / unable to locate account. The account number provided is valid but the account number does not correspond to the individual identified in the ACH transaction or the account number is not an existing account	Consumer or Non-Consumer	2 Banking Days
R04	Invalid Account Number Structure. The account number is not valid	Consumer or Non-Consumer	2 Banking Days
R05	Unauthorized debit to consumer account using corporate SEC code. CCD or CTX debit origination was transmitted to a consumer account or was not authorized by the receiver	Consumer	60 Calendar Days
R06	Returned per originating bank request (i.e., Lithic's bank partners). This generally happens due to an error in the origination file	Consumer or Non-Consumer	Determined by originating and receiving bank
R07	Authorization revoked by customer. The receiving customer revoked a previous authorization for their account to be debited by you	Consumer	60 Calendar Days
R08	Payment Stopped. The receiving bank has placed a stop payment order on an ACH debit origination	Consumer or Non-Consumer	2 Banking Days
R09	Uncollected Funds. The total balance (also known as the ledger balance) of the bank account is enough to cover the ACH debit origination but not the available balance	Consumer or Non-Consumer	2 Banking Days
R10	Customer Advises Originator is Not Known To and/or Authorized by Receiver. This occurs when the receiver indicates they do not know you or has not given you authorization to debit their account. This is different from R07 which is when an existing authorization is revoked	Consumer; Non-Consumer for ARC, BOC, IAT, or POP transactions	60 Calendar days
R11	Customer Advises Entry not in Accordance with the Terms of the Authorization. This occurs when the receiver has authorized you to debit their account but a specific ACH debit origination does not comply with the terms of your authorization agreement. For example, the amount debited was not the authorized amount	Consumer. Non-Consumer for ARC, BOC, IAT, or POP transactions	60 Calendar days
R14	Representative Payee Deceased. The representative payee is either deceased or unable to continue in that capacity. Beneficiary is not deceased	Non-Consumer or Consumer	2 Banking Days
R15	Beneficiary or Account Holder Deceased	Consumer	2 Banking Days
R16	Account Frozen / Entry Returned per OFAC. Account has either been frozen or restricted by the receiving bank or by other legal action. Or the receiving bank was instructed by OFAC to return the ACH origination	Consumer or Non-Consumer	2 Banking Days
R20	Non-Transaction Account	Consumer or Non-Consumer	2 Banking Days
R23	Credit Entry Refused by Receiver	Consumer or Non-Consumer	Receiving bank must submit return within 1 banking day after receiving the refusal from the receiver
R29	Corporate Customer Advises Not Authorized. A non-consumer receiver advised the receiving bank that a specific ACH origination was not authorized	Non-Consumer	2 Banking Days

ACH Auth Rules

ACH Intelligent Receipts brings the power of Lithic's card authorization rules engine to our ACH offering. You can also think of them as Stop Payments.

ACH Auth Rules enable you to:

Decide whether or not you want to accept an ACH receipt on the basis of:
1. Company name
2. Company ID
3. Amount
4. Date range
Automatically return the payment if it fits outside your defined criteria
Control when credit receipts are not made available to your end users. We will pend funds and emit a new RELEASED event to make them available

ACH Auth Rules can be configured for qualifying customers during the onboarding process. ACH Auth Rules are turned off by default and must be explicitly reviewed and approved. Reach out to your Implementation manager to learn more.