Despite being invented in the 1960s and having changed very little since then, the Automatic Clearing House (ACH) payment system is still the backbone of the money transfer system between banks in the United States.
ACH payments may be a bit slow to process and transfer, but the benefit of their processing time is that they allow space for merchants to stop or reverse a payment, if needed.
So, Can You Stop an ACH Payment Online?
It depends. Whether or not it’s possible to stop an ACH payment online depends on your financial institution or payment processor’s policies.
Today, many financial institutions and payment processors provide online banking or mobile banking services. These convenient platforms make it possible for customers to manage transactions and accounts online, as well as complete tasks like stopping or canceling ACH payments.
It’s not always that easy, though. THe process of stopping an ACH payment online usually depends on the timing of the transaction. Because ACH payments are processed on a schedule set by the bank or financial institution, the timing of the payment may affect one’s ability to stop it.
If you have questions about stopping an ACH payment, check with your financial institution or payment processor for more information.
Reasons to Stop an ACH Payment
Whether the payment was initiated over the phone or an online ACH payment, ACH payments may be reversed for various reasons. In addition, it’s not just the sender that can stop an ACH payment—a bank may also choose to stop an ACH payment.
Errors
This is one of the most common reasons for requesting an ACH payment to be reversed. For example, maybe the sender sent the wrong amount of money by adding an extra zero that turned $300 into $3,000, or perhaps the receiving bank notified the sender’s bank that the receiving account didn’t exist or had been closed. Again, the payment would be reversed; in this case, the bank reverses the ACH payment.
Insufficient Funds
In most instances, stopping an ACH payment due to insufficient funds is done on behalf of the bank rather than the sender. However, if the sender notices in time, they may also be able to stop the payment.
Perhaps the sender had enough money when they initiated the transfer, but before the payment was cleared, something was deducted from the sender’s account that caused them not to have enough money. Lack of funds can happen for several reasons.
Dispute Between Sender and Receiver
Disputes can occur for every reason imaginable, but for brevity’s sake, let’s say it is because the receiver of the funds has not delivered the goods or services they promised to the sender. In this case, the sender may wish to issue a stop payment order.
If You Need to Stop a Payment, Do So Immediately
To stop an ACH payment online, you need to act fast. This is because it may be too late once more than twenty-four or forty-eight hours have passed—which is how long the ACH authorization is valid. In addition, if the funds have been cleared into the receiver’s bank account, the payment cannot be reversed.
To stop an ACH payment, log in to your online banking account or mobile banking app and follow the steps laid out by your financial institution to stop the payment.
Depending on the financial institution you work with, you may need to call customer service or visit a branch in person to place a stop on an ACH payment, while others allow you to initiate the process online.
Remember that this only applies to reversals. You may be able to get your money back if there are valid reasons, such as fraud or other extenuating circ*mstances. However, getting your money back after the payment has cleared is not a reversal or a stop of the ACH payment. This is treated as an entirely separate transaction after the bank has investigated why the payment needs to be returned.
After the Payment Is Stopped
After payment has been stopped, it may take a few days for the funds to be credited into your account. The bank may also have questions about why the payment was reversed. In some circ*mstances, the bank may charge a fee for a stop payment order on an ACH transfer.
They do this because anytime a payment is reversed, extra steps are needed, not only to return the money but document why it was returned. In addition, banking laws are strict, and the bank needs to make sure they carefully record each transaction and reversal to minimize mistakes that can be costly for both the bank and the consumer.
