What Happens if an ACH Payment Is Returned?

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How to Handle ACH Returns in B2B Payments

What is an ACH Return?

An ACH return happens when a transaction submitted through the Automated Clearing House (ACH) network fails to go through and is sent back to the originator (the sender). This could occur for various reasons, such as closed accounts, invalid account numbers, or insufficient funds. Every returned transaction includes a return code indicating the specific reason for failure.

These codes help businesses identify whether the issue was due to a temporary problem—like a lack of funds—or a more permanent issue, like an invalid account.

Why Do ACH Payments Get Returned?

Returned payments are common in B2B finance workflows. Here are the most frequent reasons:

Insufficient funds (R01) – The account didn't have enough money to cover the payment.
Invalid account number (R03) – The account information was incorrect or outdated.
Account closed (R02) – The destination account has been closed.
Authorization issues (R10) – The receiver claims the transaction wasn’t authorized.

Returns can disrupt cash flow, delay transactions, and create friction between businesses and their customers or partners. For software platforms and fintech applications offering embedded payments, handling returns properly is essential to maintain trust and reliability.

How to Handle ACH Returns in B2B Payments

ACH returns are a standard part of the payment lifecycle, especially in recurring or high-volume business transactions. To reduce disruption, businesses need visibility into failed payments and tools to act on them quickly.

With VoPay’s ACH payment infrastructure, you can:

Receive automated return notifications with detailed return codes (e.g., R01 for insufficient funds)
Identify and categorize return reasons to decide whether to retry, notify users, or flag accounts
Use APIs to build retry logic or automate user communications
View all payment activity and return data in the VoPay Portal or through API responses

By integrating return handling into your platform’s workflows, you can reduce payment delays, improve customer experience, and keep your cash flow steady. Learn more.

Learn More about ACH

ACH (Automated Clearing House)

ACH stands for Automated Clearing House, a U.S. financial network used for electronic payments and money transfers. Also known as “direct payments,” ACH payments are a way to transfer money from one bank account to another without using paper checks, credit card networks, wire transfers, or cash.