NBCheck User Guide


Contents

Introduction
What is NBCheck?
What is Holding Reserve?
What is Risk Reserve?
What or Who is the ODFI?
What or Who is the RDFI?
What is a Return?
The Flow of Funds
How does NBCheck work within the Netbilling Gateway?
How to Apply for NBCheck
How does the NBCheck application approval process work?
How long does the NBCheck application process take?
What are my NBCheck processing limits and who sets them?
Testing Check Processing
How to Process a Check through the Virtual Terminal
Messages for NBCheck transactions
How can I check whether an ACH transaction has gone through?
How to Read Your ACH Reserves Report
How long does it take for an ACH transaction to process and settle?
How often do ACH transactions settle?
What is the holding period for ACH batch settlement funds?
Does the principal name on my service application have to match the principle name on my account?
Can an ACH credit or refund be processed?
Do I have to receive an authorization from the customer to debit their bank account?
How do I find a listing of returned transactions?
Are Recurring Billing and Membership options available for ACH transactions?
How do I request ACH processing limits increase?
How is my billing statement descriptor established?
How do I cancel my NBCheck service?

Introduction

With the introduction of NBCheck, NETbilling now supports the full spectrum of alternative electronic payment options through its Internet Payment Platform. By adding payment options like ACH checks to card processing, merchants can broaden their customer base. By offering additional payment options at the time of purchase or in the event of a declined transaction, fewer sales are lost.

Netbilling Gateway can help streamline your company's reporting. Whether you process transactions by phone in the Virtual Terminal, through an online payment form, or via Direct Mode, all check transaction information will be delivered online through our fully integrated reporting system.


What is NBCheck?

NBCheck allows any merchant to accept ACH electronic check payments for goods and services purchased through the Netbilling Gateway. An electronic check works like a regular check, but instead of providing payment by physically receiving and processing a paper check, the customer simply provides specific information that allows the transaction to be processed electronically allowing ACH checks to be used for not-present transactions.


What is Holding Reserve?

Holding Reserve is the account all ACH funds flow through. Monies withheld to meet any Risk Reserve requirement that may need to be met are deducted from this fund. Disbursements to merchants are made from this account at the end of the pre-transaction seven (7) calendar day holding period, less appropriate deductions.


What is Risk Reserve?

Risk Reserve is funded from the Holding Reserve. This account will hold funds to meet the reserve needs established during our Risk Department's review of each merchant's business. The Risk Reserve for an individual merchant may vary in value from a predetermined fixed dollar amount to an average of 10% of the previous 30 days gross transaction amounts for that merchant.


What or Who is the ODFI?

The ODFI is the Originating Depository Financial Institution participating in an ACH transaction. This is the bank or financial institution backing the customer's check.


What or Who is the RDFI?

The RDFI is the Receiving Depository Financial Institution, the merchants' bank. The RDFI receives the request for ACH transactions clearing from the ACH Network.


What is a Return?

A Return is an ACH transaction that cannot be completely processed. There are three types of returns:


The Flow of Funds

A typical NBCheck batch settlement works as follows:

  1. ACH transactions are electronically submitted.
  2. All transactions are screened through Fraud Defense for Checks.
  3. Until the predetermined daily cut-off time for your account, transactions will be in ACH/ISSUED status and can be voided if needed.
  4. At the daily cut-off time, NETbilling automatically compiles a batch of all submitted ACH transactions and moves them to ACH/PENDING status.
  5. These transactions are submitted to the ACH Network to begin the settlement process. Transactions rejected by Fraud Defense for Checks will not be a part of this submission but will still appear in the reporting system.
  6. Settled funds enter into your Holding account daily, less monies withheld for the Risk Reserve.
  7. All returned, disputed and/or refunded transactions are deducted from the total dollar amount in your Holding. The current balances for Holding and Risk Reserve are posted to your ACH Reserves report daily.
  8. Disbursements are made from the Holding account after a seven (7) day rolling holding period, less aforementioned withholdings.
  9. A complete processing cycle typically completes in seven (7) calendar days from transaction date to the disbursal to your bank account. Funds from the batch settlement are deposited into your bank account via separate ACH transactions as they are disbursed.

How does NBCheck work within the Netbilling Gateway?

To accept ACH transactions through a web site, you will need to provide your customers with an electronic check payment option on the web site's payment form. When Electronic Check is selected as the payment option, the form will need to prompt the customer to enter the required bank account information.

When entering a transaction through the Virtual Terminal, click on Checks under Virtual Terminal.

  1. After selecting Check Processing as the payment method, the customer enters the required information for the ACH transaction. Once the customer clicks to submit the order, all purchase and payment information is securely submitted via the Netbilling Gateway.
  2. The transaction is sent through Fraud Defense for Checks where the transaction is accepted or rejected based on security criteria defined by predetermined settings for that particular merchant account.
  3. Once the transaction is submitted, the ODFI (Originating Depository Financial Institution) reformats the information as necessary and passes the transaction to the ACH Operator for settlement. The ACH Operator uses the bank account information provided with the transaction to determine the bank that holds the receiving account [or the RDFI (Receiving Depository Financial Institution)].
  4. The ACH Operator instructs the RDFI to debit the customer's account.
  5. The RDFI provides notification of any returns or Chargebacks.
  6. In the event of a rejected transaction, NETbilling will return all transaction specific information to the merchant through the ACH Reserves Report.
  7. After the holding period, an ACH transaction to credit funds is initiated directly into the merchant's bank account. Credits will be adjusted according to changes to the Risk Reserve.

How to Apply for NBCheck

Merchants with active NETbilling accounts must complete a simple online application, print and submit that application with the additional items requested. With the receipt of the application an evaluation of the potential financial risk and creditworthiness of the merchant is initiated. This step is required and allows us to underwrite as guarantor the ACH transactions processed through our system.

Current NETbilling Merchants: You can find the online application by accessing your gateway account, clicking on Check Processing under Setup, and completing the Application Form. Detailed instructions on what is needed to complete and submit the application are included online.

Upon completion of the application review, the underwriting process, and with approval by the Risk Department, your account will be enabled for ACH processing.


How does the NBCheck application approval process work?

The Risk Department reviews your NBCheck service application and accompanying documentation based on pre-determined underwriting criteria.

Additional information or documentation may be requested from you prior to making a decision about your application. A Risk Reserve (see "How to Read Your ACH Reserves Report" below) may need to be established prior to activation of the service. After your application is reviewed, you will be notified by your agent of the underwriting decision.


How long does the NBCheck application process take?

The application and underwriting process will normally take two (2) to three (3) business days when complete and correct information is included on the application and all required accompanying documentation is provided.

Incomplete or missing documentation will delay the approval process. Applicants will be notified promptly of any need for additional information.

The application process for merchants with no prior NETbilling relationships will be processed in as timely a fashion as possible.


What are my NBCheck processing limits and who sets them?

When filling out the application, you must request certain monthly and per-transaction processing limits. The Monthly Processing Limit is the maximum dollar amount you may process for ACH transactions per month. The Per-Transaction Processing Limit is the maximum dollar amount you may process per individual ACH transaction.

Your requested limits will be reviewed during the underwriting process. The Risk Department, through its review process and in its sole judgment, has ultimate authority over the establishment of processing limits by account.

Requests for increases in processing limits may be made by contacting your agent in writing once an account history and pattern of use has been established. The Risk Department will review your account history and may approve, modify, or decline requests to modify set processing limits.


Testing Check Processing

You can test ACH Processing capability from your web site or from the Check Virtual Terminal by using a Test Checking Account Number. Your transaction will be only processed as a test instead of being sent to the ACH Operator. Simply enter a test checking accounting number in the box provided in Check Processing under Setup (ex: 123456789:12345678900), and click Apply at the bottom of the page.


How to Process a Check through the Virtual Terminal

The Virtual Terminal is located in the menu under Virtual Terminal, Checks.

Enter the required Checking Account information:

All of the information entered is permanently linked to the transaction allowing the Merchant to review transaction specifics and any notes that may have been added.


Messages for NBCheck transactions

The following represents a partial list of typical message definitions as may apply to ACH transactions.


How can I check whether an ACH transaction has gone through?

To search for a specific transaction click on Browse/Find > Find > Transactions and do a search for ACH Transactions. All ACH transactions will appear in a list. Alternately, a search can be made by Customer Name, Email Address, Account Number, etc.


How to Read Your ACH Reserves Report

Once you have applied and been approved to accept ACH transactions a report is automatically provided under the Reporting menu. The report includes the following fields:


How long does it take for an ACH transaction to process and settle?

The time required to process any individual ACH transaction from transaction date to settlement date is a combination of the time required by the ACH Network and the Holding Period established for your account during the risk assessment process. Typically settlements will occur seven (7) calendar days following submission of the transaction.


How often do ACH transactions settle?

Batch settlements occur each business day, excluding bank holidays.


What is the holding period for ACH batch settlement funds?

NETbilling holds your settlement funds for a pre-determined period of time before depositing them into your bank account to assess returns for the batch before funding. The typical holding period is seven (7) calendar days.


Does the principal name on my service application have to match the principal name on my NETbilling account?

Yes, the principal name must match. The online application form auto-fills with the information from the setup screens.


Can an ACH credit or refund be processed?

If the original transaction for which the credit is being issued has been processed through NBCheck an exact amount credit or refund is possible. There must be available funds to cover the requested credit.


Do I have to receive an authorization from the customer to debit their bank account?

Yes, you must have proper authorization from your customer prior to initiating an ACH transaction. Customer authorization is required by NACHA, as well as Federal Regulation E and under NBCheck terms and conditions.


How do I find a listing of returned transactions?

Under Reporting, ACH Reserves, a Return column will show each day a return has been made and the sum of all returns that occurred on that particular day.


Are Recurring Billing and Membership options available for ACH transactions?

Yes. A Recurring Billing service allows you to schedule and automate recurring transactions.


How do I request ACH processing limits increase?

To request processing limits increase, contact your agent in writing identifying the monthly or per transaction increase you seek. The Risk Department will review your request as well as account history in determining what changes, if any, will be made.


How is my billing statement descriptor established?

'nbcheck.com' will appear in the descriptor line on the customer's billing statement. By visiting www.nbcheck.com and entering the check routing and account numbers, the amount, and the date, all information specific to the ACH transaction will be pulled up including the name and website for the merchant where the transaction took place.


How do I cancel my NBCheck service?

To cancel your NBCheck service, please contact your agent in writing. Funds covering checks in process as well as Reserve Account balances may be held until such time as all checks in process have cleared the system.