NACHA Bank Account Validation Rule and Related Fees (Enforced March 2022)

For any gift given via ACH, RebelGive provides a super affordable rate of just 25 cents per transaction, which is covered by the Giver every single time. 

As explained here, ACH fees are deposited along with donations directly to your church's bank account, and then once a month (typically by the 7th of each month), those transaction fees are withdrawn by the processor. This system is not changing, nor are the standard 25 cent processing fees for ACH donations.

However, there is a change that is taking place industry-wide for ACH transactions due to a new bank validation rule from NACHA.

Who is NACHA? 

NACHA (the National Automated Clearing House Association) is the governing body that oversees the ACH network that processes payments from US bank accounts. If processors (or organizations using online processing accounts) do not comply with NACHA's operating rules, it could result in penalties and, in some cases, account termination.

What is the new rule? 

NACHA (and the processing partners of RebelGive) began enforcing a new WEB Debit Account Validation Rule in March 2022. This requires organizations to validate any consumer bank accounts that they haven’t successfully debited before.

How much does it cost? 

Processors (including the one that provides processing for RebelGive) have introduced a 25 cent NACHA Fee for all transactions where the Giver's bank account requires validation via NACHA's system to maintain compliance. Unfortunately, this fee currently cannot be covered by Givers or RebelGive. The good news is, however, not all bank accounts will be charged this new validation fee (more on that below). Any fees incurred from validation attempts will be calculated and withdrawn once a month by our processing partners as a lump sum that is a total of the new validation fees + the already 100% Giver-covered ACH processing fees. That total withdrawal will still happen as usual by the 7th of each month (for the previous month's fees)

This means that, for all bank account gifts, there will be the typical 25 cent transaction fee (covered by the donor), plus in some cases, a one-time 25 cent account validation fee. This means that, while all regular 25 cent ACH transaction fees will be covered by your donors, you may see some additional 25 cent fees extracted (alongside the regular ACH fees covered) from your church’s bank account that are not covered by your Givers.

Can we see if the new fee was charged? 

Yes! We've worked quickly to ensure that, anytime there are ACH validation fees included in a bank account donations Transfer, we showcase the 25 cent fee(s) that will be extracted within the first week of the following month.

This means at the beginning of each month, you can add all the ACH Transfers fees for last month, and find out how many bank account validation fees will be withdrawn from your account this month, alongside all the ACH fees that were covered by your Givers.

Each monthly extraction should equal the amount of ACH fees and NACHA bank validation fees listed for all Transfers in the previous month:

ACH Fees (100% Covered) 

Every single ACH donation has a 25 cent transaction fee that is covered by the Giver. These fees are deposited with the Transfer and then withdrawn once a month (by the 7th).

NACHA Bank Validation Fees 

Any fees listed under the "Fees" column of an ACH Transfer (as shown above) are not covered by your Givers. These fees are extracted alongside the Giver-covered processing fees.

For example, if you had 10 ACH donations last month, there would be $2.50 in fees covered by Givers. (10 * $0.25 = $2.50) But if you added up all the fees shown in the ACH Transfers and it amounted to $0.75, then you should expect a total of $3.25 ($2.50 + $0.75 = $3.50) to be extracted from your church's bank account within the first week of this month. $2.50 of that would covered by your Givers. 75 cents of that would not be.

Are there ways to avoid the validation fee? 

Yes! Thankfully, there are some helpful ways to mitigate how many validation fees will be extracted from your church's bank account each month:

1. Pre-validated Bank Accounts (Prior to March 2022): We've already done some work for you to pre-validate any previously used bank accounts (with at least one successful donation) that your congregation has saved to their RebelGive Giver Accounts. This means that for recurring gifts people had setup with their bank accounts, or any new gifts people create using an existing, valid bank account they had previously saved, the validation fee will not apply. This translates into immediate, huge savings as existing accounts that were already valid were not charged unnecessarily.
2. Bank accounts added via Plaid: The service that allows us to connect bank accounts using online banking credentials - and is available in all GivingFlows - automatically validates all bank accounts (in compliance with NACHA's new rule) when a new account is linked. So anyone who adds their bank account using Plaid always avoids the bank account validation fee. Because of this, we strongly encourage you to recommend this as the best option when adding a new bank account instead of manual entry.
   
   Not only do you avoid having to pay unnecessary bank account validation fees, a bonus with this method is that it also eliminates any mistyping of bank account numbers 😎 
   
   If anyone is concerned with using Plaid, below are a few links to how Plaid works and understanding the security of their system: 
   
   https://plaid.com/how-we-handle-data/ 
   
   https://support-my.plaid.com/hc/en-us/articles/4420182413463-How-does-Plaid-work-
   
   https://support-my.plaid.com/hc/en-us/categories/4405964125591-Privacy-and-Security
3. Saving bank accounts to your RebelGive profile: Whenever someone gives a donation through the GivingFlow, they have an opportunity to create a personal RebelGive Account as well as save their payment method. As long as someone is logged into the GivingFlow and uses a previously validated (and saved) bank account payment method, there will not be an additional validation fee associated with new transactions they create with that payment method.
   
   So whether someone connects their bank account via Plaid or enters their bank account information manually the first time they give, we also recommend educating your congregation to create personal RebelGive Accounts and to save their payment method, so that any subsequent gifts they give (using that saved method when logged in) there will only be the typical 25 cent processing fee associated with the transaction that is 100% covered by the Giver every time. If they don't save the method to a RebelGive account (and login and choose that method when they give again), the bank account validation fee may be charged again, depending on how they enter it. 

So, in short, using Plaid or a saved bank account method in a person's RebelGive Account whenever possible is the best path forward to minimize the impact of this new NACHA fee. Not only does this ensure the fees stay very low, it's also a more enjoyable experience in the GivingFlow when you can login and simply use a payment method saved in their personal RebelGive Account. It saves many taps and typing for a smoother, faster giving experience.

NOTE: For every Plaid-linked account attempt, RebelGive gets charged a much higher fee for the Plaid service than the NACHA auth fee. So by saving payment methods to donor accounts, it also helps RebelGive keep costs low for everyone as we all work together to eliminate and minimize fees as much as possible!

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As changes happen in the financial world, we do our best to adjust and not only ensure compliance, but also ensure that as often as possible we ensure the giver or us as RebelGive can cover the fees for online giving. However, in this new case, it was just not possible, so we thank you for your understanding. 

And again, even with this new validation fee affecting some accounts, RebelGive still has the lowest effective rate for fees in the entire church giving market and has already saved churches over $5 Million dollars in fees that would have been lost forever on any other giving (or church payments) platform. So thank you for continuing to partner with us as we continue to comply with the latest rules from financial institutions, and keep churches and Givers sheltered as much as humanly possible from high fees that are all too common in this space.

If you have any questions about any of this, please shoot us an email and let us know!