The ACH network supports various payment applications, each of which are identified by a unique Standard Entry Class (SEC) code. Some SECs are specifically consumer codes, some are corporate codes, and some work on both consumer and corporate accounts.
An SEC code is the three-character code that identifies the payment type and formatting requirements.
An originator is responsible for coding an ACH transaction as either a debit or credit, which affects either a consumer or a corporate account at the RDFI. Each SEC code identifies payment-related information and characteristics. For example, a telephone-initiated transaction is a “TEL.”
The ACH policy should contain a list of board approved SECs. SECs such as WEB and TEL are higher.
Sample Consumer SEC Codes
A selection of sample consumer SEC codes appear in the table below.
| SEC Code | Description |
|---|---|
| CIE (customer initiated entries) | Credit applications where a consumer initiates the transfer of funds to a company for payment of funds owed to that company, typically through some type of home banking product. |
| MTE (machine transfer entities) | The ACH network supports the clearing of transactions from automated teller machines (ATMs). |
| POP/SHR (point of purchase entries/shared network transactions) | Two codes consumers most often initiate via a plastic access card, representing point of sale debit applications in either a shared or non-shared environment. POP transactions also include conversion of checks to an ACH debit application at the point of sale. |
| PPD (prearranged payment and deposit entries) |
These entries include both direct deposits and direct payments. Direct deposit is a credit application that transfers funds into a consumer’s account at the RDFI; these funds represent a variety of products (for example, payroll, interest, pension, etc.). Direct payment (preauthorized bill payment) is a debit application. Companies with billing operations may participate in the ACH network through the electronic transfer (direct debit) of bill payment entries. Through standing or single entry written authorizations, the consumer grants the company authority to initiate periodic charges to their account as bills become due. Examples of recurring bills paid by ACH include insurance premiums, mortgage payments, and installment loan payments. Utility payments represent a non-recurring bill (that is, the amount varies) paid by ACH. |
| TEL (telephone entries) | A single entry debit application initiated by an originator pursuant to an oral authorization obtained over the telephone to effect a transfer of funds from an account of the receiver. This type of entry applies only to a single entry where no standing authorization exists and originator and receiver have an existing relationship or, absent the existing relationship, the receiver initiates the call. |
| WEB (web entries) | Debit applications initiated by an originator pursuant to an authorization from the receiver via the internet to effect a transfer of funds from an account of the receiver. |
Last updated September 25, 2017