ACH Return Code R46

ACH Return Code R46 indicates an "Invalid Representative Payee Indicator." This code is returned when a transaction involving a representative payee has an incorrect or missing indicator. 

The representative payee indicator is essential for verifying that the person handling funds on behalf of another individual is properly authorized. When this code is received, it signals the need to correct the payee information to proceed with the transaction.

What Is an ACH Return Code

An ACH Return Code is a code used to indicate an issue or error with an ACH payment transaction. These codes are defined by NACHA, the organization responsible for overseeing the ACH network, and are used by both Receiving Depository Financial Institutions (RDFI) and Originating Depository Financial Institutions (ODFI) to communicate issues during the ACH payment process. 

When an ACH payment is rejected or returned, the return code provides a specific reason for the failure, allowing the parties involved to address and correct the problem. ACH Return Codes maintain the integrity of ACH payments and ensure that issues, such as incorrect account numbers or insufficient funds, are quickly identified and resolved.

What Is ACH Return Code R46

ACH Return Code R46 indicates an "Invalid Representative Payee Indicator." This return is triggered when a government agency submits an ACH payment entry with a representative payee indicator that is not valid or is formatted incorrectly. 

The representative payee indicator is used to show that someone is authorized to receive payments on behalf of another person, such as a minor or someone receiving Social Security benefits. 

If this indicator is incorrect, the Receiving Depository Financial Institution (RDFI) will return the entry to the Originating Depository Financial Institution (ODFI) with code R46, requiring correction before the payment can be processed.

How to Fix ACH Return Code R46

To fix ACH Return Code R46, the originator must review and correct the representative payee indicator in the payment entry. This involves verifying that the indicator is present, properly formatted, and accurately reflects the relationship between the representative payee and the beneficiary. 

Since this code often appears in government-related ACH payments, follow NACHA guidelines and any applicable agency rules when preparing the payment file. Once the error is corrected, the payment can be reinitiated through the Originating Depository Financial Institution (ODFI) for successful processing by the Receiving Depository Financial Institution (RDFI).