NACHA is the governing body that defines rules and standards for ACH payments. Unlike the rules governing credit card purchases, the rules for ACH disputes do not allow a formal dispute process for challenging a dispute.
Square is on your side, but per NACHA regulations, we can’t challenge an ACH dispute.
Keep in mind: It takes (on average) up to 3 days for Square to know if our debit to your customer’s account was successful for ACH payments. During this time if the payment is not successful, the payment is declined by Square. If the ACH payment is successful and then later contested, we are unable to have a formal dispute process.
On average, consumers have up to 60 days to issue an ACH return. These return reasons include:
ACH Unauthorized: The specific transaction is not authorized by the buyer’s bank.
ACH Insufficient Funds: The available cash balance is not sufficient to cover the amount of the debit.
ACH Transaction amount differs: The buyer claims that the amount debited from their bank account differed from the amount they actually authorized for the payment.
ACH Credit not processed: The buyer claims they are owed a credit, and that they have not received a credit due to them.
ACH Duplicate Charge: The buyer claims they have been debited twice for the same sale.
Square wants your transactions to take place safely. Here are some tips to help you prevent ACH disputes:
Know your customer: Do your research before taking large payments. ACH payments are used for big-ticket items (more expensive) and also by larger merchants. Because you as a seller lack the right to challenge an ACH dispute, you should do your best to screen customers even more than you would with a person paying by credit card.
Use a Square contract: Helpful for ‘friendly fraud’ scenarios that you may choose to pursue outside of Square (i.e. in court). It won’t be helpful for true fraud and it’s not something Square can assist with, but you can use Square Contracts to create agreements that will help you fight friendly fraud disputes if needed outside of Square
If you notice suspicious actions, don’t accept the customer’s payment.