The Standing Authorizations Rule (the Rule) established standards for a standing authorization as an advance authorization by a consumer of future debits at various intervals. Under a Standing Authorization, future debits are initiated by the consumer through further actions. The Rule allows for Originators to obtain Standing Authorizations in writing or orally. The Rule also defines Subsequent Entries, which are individual payments initiated based on a Standing Authorization. Subsequent Entries may be initiated in any manner identified in the Standing Authorization.

The Rule allows Originators some flexibility in the use of consumer Standard Entry Class (SEC) Codes for individual Subsequent Entries. Originators may use the TEL or WEB SEC Codes for Subsequent Entries when initiated by either a telephone call or via the Internet/wireless network, respectively, regardless of how the Standing Authorization was obtained. In these cases, the Originator does not need to meet the authorization requirements of TEL or WEB, but does need to meet the risk management and security requirements associated with those SEC Codes.

In addition, the Rule allows for optional formatting so an Originator may, at its discretion, identify an entry as having been originated under the terms of a Recurring, Single-Entry or Standing Authorization. The standard code values will be “R” for Recurring, “S” for Single-Entry, and “ST” for Standing Authorization. An Originator may choose to include these values in the Payment Type Code Field of a TEL or WEB entry or the Discretionary Data Field of a PPD entry. In order to accommodate this option, the Rule removed the existing requirement that TEL and WEB entries must be identified as either Recurring or Single Entries, and designates the Payment Type Code as an optional field.

At its discretion, an Originator may identify a Subsequent Entry as a debit WEB Entry if the Receiver’s affirmative action for the initiation of the Subsequent Entry is communicated by the Receiver to the Originator via the Internet or a Wireless Network, regardless of the manner in which the Standing Authorization was obtained. The requirements of Subsection 2.5.17.6 (Verification of Routing Numbers) apply to a Subsequent Entry that is a debit WEB Entry only if the routing number was communicated via (a) an Oral Authorization via the telephone, or (b) the Internet or a Wireless Network, regardless of whether the routing number was communicated in conjunction with the Standing Authorization or Subsequent Entry.

A Standing Authorization is an advance authorization obtained from a Receiver for one or more future entries (referred to as subsequent entries) that require the Receiver’s affirmative action to initiate. An Originator of a standing authorization must meet the minimum standards for a consumer debit authorization identified above, but it may do so through a combination of the standing authorization and the Receiver’s affirmative action to initiate each subsequent entry.

As part of the terms of a standing authorization, the Originator must clearly specify the action(s) that the Receiver can take to initiate a subsequent entry. These actions can include, but are not limited to, a telephone call, an internet interaction, or a text message.

• Bill payment - A standing authorization could allow a consumer to initiate payments on a credit card account intermittently and via various channels (phone, online, mobile app, text, virtual assistant technology, etc.)

• E-wallet /personal financial management - A consumer could provide a standing authorization for future debits related to using an e-wallet or other personal financial management service

• Personal or home virtual assistants - A standing authorization could be used in conjunction with services and apps that allow future e-commerce and payments to be initiated via virtual voice assistant or similar functionality

• Account transfers - A consumer could provide a standing authorization to authorize funding debits to a brokerage account based on investment activity

For a standing authorization, an Originator must retain the original or a copy of each standing authorization for two years following the termination or revocation of the authorization. The Originator must also retain proof that the Receiver affirmatively initiated each payment in accordance with the terms of the standing authorization for two years following the Settlement Date of the entry.

In any case where the Receiver’s affirmative action to initiate a subsequent entry involves the communication or confirmation of any of the Receiver’s banking information (such as routing number, account number, PIN, or other identification symbol) via an unsecured electronic network, the Originator must comply with ACH data security requirements.

In certain cases, an Originator may identify a subsequent entry using the Standard Entry Class Code appropriate either to (1) the manner in which the standing authorization was obtained from the Receiver, or (2) the manner in which the Receiver’s affirmative action to initiate the subsequent entry was communicated to the Originator.

However, the Rules do not allow an Originator that obtains the Receiver’s standing authorization using the WEB or TEL Standard Entry Class Codes to identify subsequent entries using the PPD Standard Entry Class Code.

For more information on selecting Standard Entry Class Codes, see Proper Use of Standard Entry Class Codes for Subsequent Entries later in this chapter.

See Appendix H of these Guidelines for more information on the proper use of Standard Entry Class Codes for consumer entries.

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