Summary of POP Requirements
The POP (point of purchase) entry format will allow an integration with a point of purchase or swipe terminal, providing an alternative to accepting consumers’ checks as a method of payment.
The POP SEC allows for a single entry ACH debit transaction for in-person purchases made at the point of purchase. A source document is required for written authorization and account information at the point of purchase.
The consumer presents a check or share draft that has not been previously voided or negotiated. You use a check reading device to capture the MICR information from the check. The amount is keyed in. The source document is returned to the customer voided.
For more information regarding ACH, refer to About ACH Payments.
POP Legal Framework
The POP entry is subject to NACHA operating rules, the Electronic Funds Transfer Act and Regulation E. The POP entry is considered to be an ACH transaction throughout the processing of the payment, and does not need to be abide by Check law or the Uniform Commercial Code.
An item must comply to the following, if the item is to be eligible as an POP entry:
- The check or source document has not been previously negotiated.
- The check or share draft has not been previously voided.
- The check or share draft contains a pre-printed serial number.
- The check or share draft is drawn only a consumer account.
- The check or share draft is not a corporate check, third party check, credit card check, money order or travelers check.
POP Authorization Requirements
The merchant must obtain authorization of the payment through compliance with NACHA guidelines and a copy is to be provided to the customer. The authorization is required:
- To be in writing, signed or similarly authenticated by the Merchant.
- To be identifiable as an ACH debit authorization.
- To clearly state the terms.
- To state that the check will not be processed.
- The method to revoke authorization does not need to be included.
- As the customer can not revoke authorizations, R07 codes can not be received for POP payments
POP Receipt Requirement
The merchant must provide a receipt that contains the following information:
- The Merchant’s Name
- The Merchant’s telephone number
- The date of the transaction
- The transaction amount
- The source document check serial number
- Some unique number that identifies the location of the transaction
- Terminal City
- Terminal State
POP Formatting Requirements
The following format requirements apply to an POP transaction:
- Individual name is optional. If used then it can include the consumer’s name or a reference number.
- As the individual name is optional, an RDFI cannot return a point of purchase entry using the return codes R03 and R17.
- Check serial number is to be placed in the check serial number field of the POP entry. An RDFI is required to print the check serial number on the consumer’s bank statement.
- A 4-character number or abbreviation is to be used to indicate the Terminal City field and will be passed in the Terminal City Field. An RDFI is required to print the terminal City on the consumer’s bank statement.
- A 2-character abbreviation for the state in which the electronic terminal is located will be passed in the Terminal State field. An RDFI is required to print the terminal state on the consumer’s bank statement.
R03, R17, and R07 are not applicable return codes for a POP transaction. A merchant will need to develop procedures to handle POP returns, as the consumer’s name has not been captured.
Returns for NSF can be retried up to two more times.
- Information that appears on this page is taken from ACH Compliance Manual: How to Comply with ACH-Related Rules and Regulations, copyright 2003 by NACHA, Electronic Funds Transfer Act, Regulation E, Uniform Commercial Code, and Federal Reserve Regulation CC.