Every once in a while, I get a question from someone about sending a transaction to <insert name of party here>. Usually, Grandchild, college bound son/daughter, babysitter, anyone really.
Can they do it? How do they do it?
The shorts answers are, yes, you can do it and contact your Bank or Credit Union.
Before I get to the fuller answer, let’s talk about options – you know I like doing that. While this blog is all about ACH, I’m going to deviate for just a moment to make mention of ways you can transfer money easily and inexpensively between two individuals (not businesses) that are not really (at least on the surface) ACH.
1) Prepaid Cards – Visa, Mastercard, American Express, they all have them. Like a gift card. They are reloadable, usually online and sometimes at brick and mortar locations. They generally have some kind of fee, monthly or per transaction, but are accepted at many, many locations. Sometimes the transaction to fund the prepaid card is done by ACH in the background.
2) PayPal – Eveyone knows who they are. You can keep money in an account to buy things or just transfer money to others who also have a PayPal account. Pretty basic.
3) Obopay and other mobile-to-mobile payment providers like them. I really like these guys – their process makes me seem hip. I’m not hip, but it makes people think I am. You use your cell phone to make payments from a previously set up account to someone else who has an account and then those funds can either be kept in that account for future use or accessed by a prepaid card. They all do it a little differently, so check them out if you want details. Sometimes this is done by ACH in the background.
Now, clearly via ACH. The SEC Code – you remember those – Standard Entry Class Codes is CIE. It stands for Customer Initiated Entry. They can only be Credits and can only be P2P or Person to Person transactions. And get this…no pesky authorization requirements.
See, the ACH Operating Rules specifically don’t require authorizations between “natural persons”. Now this might mean that while you cannot send funds to either Edward or Jacob (mostly because I’m not sure a vampire or warewolf would considered a “natural person”, you could send money to your son at college, pay the kid who mows your yard or even pay your best girlfriend for your half of dinner last night. Of course, you have to know the other person’s Routing Number and Account Number.
That being said, if you’re interested, talk to your Bank or Credit Union. It’s an easy, inexpensive, frequently free (like bill payment) and quick. I highly recommend it.
ACHGuy
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Hi there, ACH Guy! I have a question about ACH processing. Someone from http://www.m2wwsolutions.com called me a week ago and asked if I considered using ACH as a payment option for my website. Have you heard of the company? They have been around for 25 years, is what they told me, but it doesn’t sound familiar. Any feedback would be greatly appreciated!
Hey Monica,
Unfortunately, I am not familiar with these guys. It doesn’t mean anything one way or the other, it just means that I haven’t heard of them.
If you are considering adding ACH to your arsenal of payment options, check out my post about ODFI vs. Third Party Processor. While it was intended to help you decide between those two options, it will also give you some food-for-thought on your due diligence process. If you are still in the early consideration stages, I encourage you to consider all your options.
Sorry I cannot be or more help, but please let me know how it works out?
Have a great day,
ACHGuy