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How do you cancel an ACH transfer?

Sometimes you may need to amend or delay an ACH payment.
Find out how and when you can stop or reverse a transaction.

The electronic Automated Clearing House (ACH) network facilitates everything from monthly bill payments to direct deposits for paychecks. Account holders and merchants who encounter issues with ACH payments can stop or reverse them, unlike wire transfers which are usually irreversible.

You need to act quickly if you make an error with your ACH payment details, need to update your information or suspect fraudulent activity. Your checking account could be debited as early as the next business day, so it is important to understand how you can reverse or stop payment.

How to stop an ACH payment

ACH debits are a convenient option for account holders who want to pay regular bills. Organizations can automatically ‘pull’ funds from the account when they become due, so there is no chance of a missed or late payment.

But you may need to delay or adjust ACH debits. To do this, contact the organization that is initiating the payment, whether this is the biller or your bank. If it is your bank, provide them with the name of the organization and the monthly payment amount. You should submit the request three business days before the scheduled payment date.

The other type of ACH transaction is ACH credits, which require account holders to initiate the transaction. If you wish to stop previously authorized payments, you will need to notify your bank before the payment is debited. Provide the name of the organization, the exact payment amount and your account details. The process differs by financial institution, with some banks allowing you to stop payments over the phone and others requiring form submissions.

How to request an ACH reversal

A merchant can reverse an ACH payment under certain circumstances. The National Automated Clearing House Association (NACHA) have strict ACH reversal rules. Reversals must occur within five business days of the transaction, and only three situations qualify for approval. These include;

  • If the payment was for the wrong dollar amount
  • If the account number provided was incorrect
  • If duplicate transactions occur

Account-holders will always receive a notification if their account is due to be debited. The bank has no obligation to honor ACH reversals if the dollar amount entered is at a higher value which would cause a negative checking account balance. You may accrue charges on your account if this results in insufficient funds for the due payment.

How to update direct deposit details

Many organizations use direct deposits to pay their employees each month. Contact the company initiating this payment as soon as possible if you need to change the details of your nominated account.

You will need to provide them with the details of your new bank account, including your account number and routing number. Request that the details of your old account are deleted but avoid closing your account too early. The process can take between two to four weeks to complete and shutting your account before this time could result in missed payments.

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What is the difference between ACH and wire transfers?
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