Why You’re Reading This

You need to implement security policies and credit card authorization procedures. This will help you detect fraudulent transactions before they are processed, and will prevent you from spending significant time defending a disputed charge, not to mention it will save you substantial fees assessed for charge backs in addition to the money lost on the original transaction.

Download Your Free Recurring Credit Card and ACH Authorization Form

The following sections provide guidance on how to obtain the proper authorization for recurring ACH and credit card transactions

Things to know about

Recurring Credit Card Transaction Authorization

You are permitted to authorize recurring schedules that debit a credit card account by using a signed paper authorization form. The authorization requires that your customer understand the conditions under which the business is permitted to debit the account (such as amount, date, and frequency), as well as conditions for termination or change of the authorization.

Typical Uses:

How to Authorize a Recurring Credit Card Transaction:

1. Have your customer sign and date the form (see templates) that includes the credit card account to be charged, how to terminate the schedule, and the information specified below for the type of recurring payment schedule

2. Give your customer a copy of the signed form.

3. Keep this form on file, stored digitally or in paper form, for one year after the last payment on the schedule.

4. Send a receipt for each transaction via mail or email.

5. Mail or email notification to your customer at least 10 days in advance of any change to the schedule amount or frequency.

Recurring ACH Transaction Authorization

Recurring Payments Will Make You and Your Customer’s Lives Easier:

Using a Recurring ACH Authorization Form is an Easy Way to Protect Your Business:

According to NACHA (the organization that oversees the Automated Clearing House (ACH) network) rules, there are only three reasons people can dispute ACH charges to their account:

NOTE: The transaction must be for the exact amount authorized—it cannot be higher or lower. However, you are permitted to have customers authorize payments for variable amounts, and/or not to exceed amounts.

That’s it. And, disputing an ACH charge requires that the account holder provide notice to the bank in writing (or the electronic equivalent) that one of those three conditions exists. (Note that this is significantly different from credit card transactions where a customer can have a charge reversed simply by claiming that the product or service received was not what they expected.)

Set Up an Online Payment Form to Accept Payments Online

Go one step further and create a web payment page where you can automate your entire payment authorization process.

By hosting an online payment form you can:

More information on setting up online payment forms

Learn how PaySimple can help take your business to the next level.