Every ACH entry must be classified with a three-letter Standard Entry Class (SEC) code. These codes define the transaction type, authorization method, and applicable Nacha rules (including return deadlines). Using the correct SEC code is critical for ACH compliance.

Prerequisites

Active merchant account with ACH Debit origination enabled
Compliance with Nacha Operating Rules and Regulation E for consumer protection

Limitations

PCE supports only PPD, CCD, WEB, and TEL—CTX is not available

Compliance / Regulation Mandates

Nacha Operating Rules

Every ACH entry must use the correct SEC code and follow its specific authorization, data, and return requirements.

Regulation E

Provides consumer rights and error-resolution procedures for electronic fund transfers.

Authorization & Record-Keeping

PPD: Written mandates retained for at least 2 years.
TEL: Oral authorizations with scripted disclosures, retained for at least 1 year.

SEC-Specific Controls

WEB: Requires secure identity verification and account validation before origination.
TEL: Must adhere to Nacha’s call-record scripting and authentication standards.

What Are SEC Codes?

A Standard Entry Class (SEC) code is a three-letter designation on each ACH file that governs authorization methods, data requirements, return timeframes, and risk controls.

Supported SEC Codes

PPD (Prearranged Payment & Deposit)

Use case: Consumer billing (utilities, subscriptions)
Authorization: Written mandate (paper or electronic signature)
Returns: 60 days for unauthorized, dispute window up to 2 years

CCD (Corporate Credit or Debit)

Use case: B2B payments with minimal remittance data
Authorization: Business agreement, usually written or contractual
Returns: 2 business days for unauthorized; standard corporate return windows

WEB (Internet-Initiated/Mobile Entry)

Use case: Consumer debits via website or mobile app
Authorization: Online agreement; PCE requires identity & account validation
Security: Must comply with Nacha’s WEB security guidelines (e.g., tokenization, risk scoring)

TEL (Telephone-Initiated Entry)

Use case: One-time or recurring debits authorized orally over telephone
Authorization: Recorded call or written summary; follow Nacha’s scripting requirements
Retention: Store call records or signed confirmation for at least 1 year

Unsupported SEC Code

CTX (Corporate Trade Exchange)

Not supported on PCE
Designed for high-volume B2B use with up to 9,999 addenda records for detailed remittance—beyond PCE’s SME-focused ACH capabilities.