Authorize.net FAQs

*eChecks in Authorize.net are only relevant if your financial institution utilizes Authorize.net for ACH Account Opening funding. Narmi AO ACH Service was introduced in release 2024.4 for our Consumer Account Opening and Business Account Opening products. Please contact your Narmi Relationship Manager for more information regarding Narmi AO ACH Service.

How do eChecks work?

*eChecks in Authorize.net are only relevant if your financial institution utilizes Authorize.net for ACH Account Opening funding. Narmi AO ACH Service was introduced in release 2024.4 for our Consumer Account Opening and Business Account Opening products. Please contact your Narmi Relationship Manager for more information regarding Narmi AO ACH Service.

1. Electronic checks are processed via the ACH (Automated Clearing House) network.
2. A customer provides their bank account information (bank routing and account number) for processing
3. Using the customer’s bank account information, an electronic request is made to charge the customer in the amount of the purchase.
4. Authorize.net receives the electronic request and stores the transaction in the “batch” with your other transactions for the day.
5.  At the end of each business day, a request is submitted to the customer’s bank through the Automated Clearing House (ACH) to charge that particular customer.
6. The eCheck system waits for the result of the transaction from the bank. This process usually takes two to three (2-3) business days.
7. The funds are transferred (via [electronic funds transfer](https://www.authorize.net/resources/blog/2021/what-is-an-eft-payment.html), or EFT) from the customer’s bank and deposited into your business bank account.
8. Your eCheck account balance is updated depending on the results of the transactions.

Is Authorize.Net in compliance with Payment Card Industry Data Security Standard (PCI DSS)?

Yes, Authorize.Net is audited yearly to confirm that it remains in compliance. More info can be found here.

Does eCheck verify the customer account before sending ACH transaction for processing?

Yes, Authorize.Net verifies the customer's account number along with the routing number for both WEB and Automated Recurring Billing transaction types. Additional information can be found here.

Does Authorize.net store customer data?

Yes, Authorize.net does securely store customer data as part of their Customer Information Manager service.

How does the eCheck.Net settlement process work?

The answer below is from authorize.net’s help center. Access the article here.

Because eCheck.Net payments are made from a customer's bank account, the settlement process is different from credit card transaction settlements. 

For eCheck.Net transactions, “Settlement” occurs when the payment gateway initiates an ACH transaction to request the collection of funds for a purchase from the customer's bank account. “Funding” occurs when funds collected for eCheck.Net transactions are deposited to your merchant bank account. 

Settlement for eCheck.Net transactions occurs each business day (excluding bank holidays). eCheck.Net transactions submitted to Authorize.Net before your daily Transaction Cut-Off Time are sent to the bank the following business day. The settlement time for each batch of transactions marks the beginning of the Authorize.Net funds holding period. Transfer of eCheck.Net proceeds to your bank account occurs on the business day after the transactions are considered collected by the system. 

NOTE: Because the availability of funds is not verified in real time, you should wait until the funds holding period is over before shipping or providing access to merchandise purchased using eCheck.Net. 

The timeframe for settlement, returns and funding can vary depending on several variables such as the day of the week the transaction is submitted, the number of holding days established for your eCheck.Net account, whether the transaction is returned for any reason, or if processing occurs over a weekend, etc. 

NOTE: Should a merchant run a eCheck transaction as "Auth only" this will cause a funding delay. eCheck transactions will only begin their funding once a transaction has been captured and settled. 

The following represents a typical eCheck.Net processing cycle with a three-day holding period:

• Banking Day 1: The merchant receives an eCheck.Net transaction. At the Transaction Cut-Off Time the transaction is picked up by the payment gateway.
• Banking Day 2: The payment gateway submits the previous day's batch to the ACH Network. This is the first day of the required funds holding period. The number of holding days varies per merchant, but for this example, we'll use three days.
• Day 3: The ACH Network collects funds for the transaction from the customer's bank and relays them to Authorize.Net. This is the second day of the required funds holding period. One of the purposes of the holding period is to wait for potential returns for transactions included in the batch. Returns can come back on this day.
• Day 4: Third day of the required funds holding period. Returns can come back on this day.
• Day 5: The payment gateway transfers available eCheck.Net proceeds to the merchant's bank account. Returns can come back on this day.
• Day 6: The eCheck.Net proceeds are available in the merchant's bank account. Returns can come back on this day.

As processing only occurs on banking days, the timeframe can be extended depending on what day of the week processing and holding days occur. For example, if Banking Day 1 in the example above is a Friday, Banking Day 2 would not actually occur until Monday, two days later, prolonging the timeframe by the same number of days. 

NOTE: The customer typically has 60 days from the day the transaction appears on their bank statement to return or dispute (in the case of a chargeback) a charge to their bank account.

What is the eCheck.Net deposit process?

The answer below is from authorize.net’s help center. Access the article here.

When an eCheck.Net transaction has been submitted to Authorize.Net, we are only able to verify that the routing number is a valid routing number. At that time, it goes into the current batch of Unsettled Transactions in your Authorize.Net account. eCheck.Net transactions are settled on weekday mornings separate from your credit card transactions. Once an eCheck.Net transaction has been "settled," the account information is submitted to the customer's bank as a request for funds, much like depositing a paper check.

There is a 7-10 day waiting period from when you settle an eCheck.Net batch until we provide funding for it. This gives time for the customer's bank to process the request, and let us know if there were sufficient funds and all the account information sent to the bank were correct. After this time frame, we will deposit the funds, minus any fees, into your checking account that we have on file in your Merchant Interface.

eCheck.Net® funding process includes the following steps:

1. Proceeds for a batch of eCheck.Net transactions are collected and deposited into a settlement “sub-account” to manage your eCheck.Net settlement funds.
2. From these batch settlement funds, Authorize.Net® assesses all applicable fees for your eCheck.Net transactions including: per-transaction fees, discount fees, returned item or chargeback fees. These fees are then placed into your Billing Reserve sub-account.
3.  Authorize.Net also assesses risk reserve withholdings, if applicable, from your batch settlement funds and places them in your Reserve sub-account. For more information about the Risk Reserve, see the section in the document titled “Reserves.”
4. After the funds holding period established for your eCheck.Net account, Authorize.Net initiates an ACH transaction to transfer the remaining proceeds from the batch to your merchant bank account.
5. At monthly billing, Authorize.Net looks at your Billing Reserve sub-account balance and transfers the amount needed to cover your billing balance to your Billing sub-account. If your Billing Reserve sub-account balance is less than your billing balance, Authorize.Net initiates an ACH transaction to charge your merchant bank account for the difference.
6. At the appropriate time, Authorize.Net will transfer funds or a portion of funds held in your risk reserve to your merchant bank account.

For additional information with Settlements and Funding, please review the eCheck.Net Procedures and Users Guide. Also, there is specific information pertaining to your own Authorize.Net Gateway account located on the Merchant Profile. To view all information, log into your account.