> ## Documentation Index
> Fetch the complete documentation index at: https://docs.straddle.com/llms.txt
> Use this file to discover all available pages before exploring further.

# ACH SEC codes reference

> Reference for ACH Standard Entry Class (SEC) codes, including WEB, PPD, CCD, and TEL, with use cases and Nacha authorization requirements for each code.

## What are SEC codes?

An SEC code is a three-letter code that describes how a payment was authorized by the consumer or business receiving an [ACH transaction](/help/ACH101/ach-basics).

## How SEC codes work in practice

The Originator is responsible for including the correct SEC code in the ACH payment when originating a file. SEC codes are attached to the ACH payment request as part of the NACHA file format.

The Originator must also have proper [authorization](/help/Payment-Compliance/ach-auth) from the Receiver. **The nature of this authorization depends on the SEC code and whether funds are being [debited](/help/ACH101/ach-debit) or [credited](/help/ACH101/ach-credit)**.

<Info>
  Most [ACH debits](/help/ACH101/ach-debit) (Straddle [**charges**](/api-reference/charges/create)) require written or electronic authorization from the recipient, while most [ACH credits](/help/ACH101/ach-credit) (Straddle [**payouts**](/api-reference/payouts/create)) do not.
</Info>

### Phone authorization requirements

Debits authorized by phone call need to use the SEC code **TEL** (see full [SEC Code authorization rules](/help/nacha-rules/ach-rules)) and require the company originating the payment to:

* Maintain a recording of the customer's verbal authorization, **or**
* Follow up with the customer for written confirmation of the authorization before initiating the payment

<Warning>
  Including the incorrect SEC code could result in an ACH Return. The Originator is responsible for any return fees and must resubmit the payment with the correct code.
</Warning>

## Common SEC codes and their requirements

| SEC Code | Description | Direction | Authorization Requirement |
| - | - | - | - |
| **PPD** | Prearranged Payment & Deposit (Corporate to Consumer) | Credits | Authorization required. Oral or non-written means (such as voided check) accepted. |
| **PPD** | Prearranged Payment & Deposit (Corporate to Consumer) | Debits | Authorization required. Written, signed, or similarly authenticated. |
| **CCD** | Corporate Credit or Debit (Corporate to Corporate) | Debits/Credits | Agreement required for transfers between companies; written authorization implied. |
| **WEB** | Internet-Initiated/Mobile Entry (Corporate to Consumer) | Debits | Similarly authenticated authorization required due to the nature of the Internet. |
| **WEB** | Internet-Initiated/Mobile Entry (Consumer to Consumer) | Credits | No authorization required. |
| **POS** | Point-of-Sale | Debit/Credit | Written and signed or similarly authenticated. |

## Why proper authorization matters

Obtaining the proper [authorization](/help/Payment-Compliance/ach-auth) for your ACH transaction is the most important step you can take to ensure compliance with [network rules](/help/nacha-rules/ach-rules) and protect yourself against disputes, [return fees](/help/nacha-rules/ach-return), and reversed transactions.


## Related topics

- [Glossary of ACH and Straddle terms](/help/Reference-Materials/glossary.md)
- [ACH payment authorization guide](/help/Payment-Compliance/ach-auth.md)
- [ACH return codes and Nacha thresholds](/help/nacha-rules/ach-return.md)
- [ACH data security and Nacha audits](/help/Payment-Compliance/data-security.md)
- [Nacha ACH Appendix](/help/nacha-rules/nacha-appendix.md)


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