In March 2006, Nacha issued an Operations Bulletin (Section 13.3 Interpretive Rules) to explain its position on (Prearranged Payment and Deposit) PPD debit entries for check conversion vs. the exclusive use of POP formatting for the collection and electronic conversion of consumer checks accepted at the point of purchase (POP).  Both PPD and POP require a consumer’s written statement of authorization and can’t be based on oral authorizations as consumer debit authorizations, enhancing consumer protection.   Nacha’s interpretive conclusion for PPD debit entries vs. POP format is: “The practice of receiving checks at the point of purchase and then converting those checks to one-time PPD entries is inconsistent with the exclusive application of POP entries to such payments under the Nacha Operating Rules. The rules for POP entries and POP SEC Code are the only rules, and the only SEC Code, that provide for the conversion of checks received in-person. The use of all other SEC Codes for this purpose is not permissible under the Nacha Operating Rules.” Nacha’s rationale for this interpretive decision includes risk management, consumer protection, and better customer service.  According to Nacha:  “The rules for POP entries establish the legal framework and requirements that the Nacha Voting Membership determined were needed to protect ACH participants with respect to check conversion transactions initiated at the point of purchase. The rules for POP entries also establish requirements for the provision of information on the consumer's bank account statement to enable the consumer to identify the converted check and the location where the payment was made. [12] The POP application was specifically designed to provide consumer protections and requirements unique to this type of conversion activity.  These unique requirements were intended to mitigate risk and reduce customer service problems. These requirements do not apply to PPD entries and therefore the use of PPD entries for conversion of checks received at the point of sale could result in more risk to ACH participants and customer service issues. For example, the PPD format cannot accommodate the inclusion of the check serial number from the consumer’s source document. Similarly, the rules for PPD entries do not require the placement of this information on the consumer’s bank account statement.”