NationalACH

Archive for January, 2010

Grocer Safeway’s Blackhawk Network announced an agreement with Facebook , that will let Facebook members buy and send content from Apple iTunes music and digital content service. Online gift cards are available on Facebook’s iTunes Fans Page.

Senders pick virtual gifts for $5 to $50. Senders add a personal message, schedule a delivery time, and then pay with a credit or debit card.  Recipients see the gift as a post to their Facebook Wall and can immediately redeem it at iTunes. Only the intended recipient has the code to make a redemption.

Another prepaid card development came from an agreement between Western Union and prepaid card processor InComm. Incomm is offering Western Union’s GoCash prepaid service, which lets consumers pay for prepaid domestic and international wire-transfers in denominations of $50, $100, and $200.  Incomm has 150,000 retail locations, although all of them may not sell the card.  After purchasing the card, the buyer calls Western Union’s customer-service line to make the transfer.

ACH payment processing info at nationalach.com

Electronic payment processing is continuing to expand within utility companies as more consumers are paying bills electronically rather than writing paper checks. ACH payments have long been popular for utility bill payments. ACH is a low cost method of accepting payments for utility companies, with fees of 20-30 cents per transaction.

Credit cards and debit cards are now increasingly popular as well. The credit card companies have special rates for utility bill payments. For example, MasterCard’s latest schedule utility payments would generate a flat $1.50 in interchange for a $200 transaction. This replaced the old rates where the same payment would have cost $4.74.

Acquirers, who pay interchange to the issuing banks, decide whether or not to pass savings on to their utility clients. Acquirers serving utilities make recommendations about what electronic transactions work best for unity companies. But, of course, the acquirers are most interested in their own profit margins.

Utility companies would prefer that consumers set up recurring payment models. Recurring payments are quite common for ACH payments. But, credit and debit cards still are generally initiated for one-time payments. Card transactions are most often paid directly on the biller’s websites or over the phone.

A set of rules governing the exchange of a new type of all-digital check will be released Electronic Check Clearing House Organization (ECCHO) The rules would permit banks to offer digital checks that work on mobile phones.   The rules would apply only to transactions between the 2,268 financial institutions that are ECCHO members.

An electronic payment order, or EPO used special software installed on a smart phone.  The software lets consumers create checks on the phone, fill in fields on a check image appearing on his screen and sign the instrument with a stylus. The software transmits the image over the wireless network to a the recipiant, who would deposit it electronically. The check image would clear and settle in the same way as any other check images.

ECCHO’s rules outline legal definitions of the EPO and describe how legal liabilities would be split among the parties to the transaction. The rules will help improve operational efficiencies and safeguard participants.

Information on electronic checks at nationalach.com

The Federal Reserve Bank of Boston has issued a report on consumer usage of electronic payment methods.

According to the study:

* Consumers use a payment card to pay for 52.9% of monthly bills.  Payment cards include debit, credit and prepaid.
* Consumer adoption of debit and credit cards, for example, stands at 80.2% and 78.3%, respectively
* Prepaid cards are used by 17.2% of consumers.  Prepaid card users reload the card 31 times per year.
* Biller websites are used more often to pay bills than is bill pay through bankin sites.
* Consumers are adopting contactless payments with 21.7% using contactless debit cards and 25% using contactless credit cards.
* Mobile phone are being used by 8.2% of consumers to access bank accounts.
* Consumers are most concerned with security when chosing a payment option.  This is followed by ease of use and control over payment timing.
* Cash, paper checks, and money orders are still popular payment forms, accounting for 36.5% of consumers’ payments each month.

Visit nationalach.com for more information on ACH payment processing.

NACHA is the rules governing organization for the ACH network. The organization has been receiving reports about a scam being perpetuated that consumers and businesses must avoid.

The scam is a classic phishing scheme. Emails are sent to both individuals and companies that appear to have been sent by NACHA. But, the emails are fraudulent since NACHA never sends out such transmissions.

The title of the email is “Rejected ACH Transaction.” The body of the email has a link to a website that looks like the NACHA site but is a fake site. When the recipient clicks on the link, a virus with malware is downloaded to the unsuspecting victim’s computer.

Once downloaded, malware can be used to silently invade the victim’s computer and steal passwords and logins into online banking sites. Malware can also be used to track key strokes and allow hackers to login to the online bank sites by taking over the computer system without the knowledge of the user.

Once malware infects a computer, special software is necessary to remove the code. Or, the entire system may need to be cleaned and reinstalled. Businesses and consumers must always be sure to have the most current versions of anti-virus software installed and keep them automatically updated. Operating systems and software applications security patches should also be updated automatically.

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Secure Vault is an online-payments program whereby consumers initiate a “push payment” to merchants from their checking accounts through the ACH payment network. The program has been embraced by higher education institutions.

The University of Georgia started using Secure Vault payments in July 2009. To date, 16% of al eligible students use Secure Vault to pay for college expenses. Of these, 16%, 57% used Secure Vault once, 35% used it 2-4 times and 8% used it 6-8 times.

This is a remarkable adoption rate for an alternative payment option. All the more so since the school has not done any advertising about Secure Vault.

More than 50 colleges and universities have signed letters of intent to use Secure Vault. Schools like the payment option because it’s less expensive than credit card processing and still provides real-time authorization of payments.

Standard ACH payment processing using electronic checks do not have immediate authorization of payments. Schools must still wait several days for transactions to clear through the ACH processing network.

Using Secure Vault is easy Consumers chose the payment option at checkout. Consumers are redirected to a log-in page for their online-banking program where payment is made. Consumers are then directed back to the merchant site. The Secure Vault network notifies the merchant that the payment is complete. Completed transactions are cleared funds.

The FBI has released findings from its investigation on how cybercriminals are stealing money from the bank accounts of small-mid sized US companies.

The thieves then initiate a series of unauthorized bank transfers out of the company’s online account in less than $10,000 to avoid banks’ anti-money-laundering reporting requirements.

The funds are sent to “money mules”, who are willing participants or naive individuals recruited over the Internet through work-at-home job scams. The mules pull the cash out of their accounts, keep a small percentage of it, and wire the rest to organized criminal groups operating in countries like Moldova, Russia and Ukraine.

The deputy assistant director of the FBI’s Cyber Division said criminals involved in these online account takeovers have attempted to steal at least $85 million from mostly small and medium-sized businesses, and have successfully made off with about $40 million of that money.

Companies that bank online have few of the protections afforded to consumers. Individuals are usually are made whole by their bank. Businesses, however, often must absorb the losses.

The FBI says businesses should protect themselves by conducting online banking from a dedicated, locked-down computer that is not used for everyday web browsing or e-mail. Malicious software that thieves use to steal online banking user names and passwords is usually installed when the recipient of a spam e-mail opens a poisoned attachment or clicks a link that leads to a booby-trapped web site.

But, despite the best efforts of a business to protect itself, online banking still presents risk. Companies being victimized by this type of crime often have accounts at small and regional financial institutions which do not have adequate fraud detection technologies in place. These institutions rely on layers of customer protections, such as security tokens, which can easily be circumvented by cybercriminals.

Info on ACH payments at nationalach.com

Research firm Celent predicts savings of $11 billion can be achieved through automation of health-care payment processing. Much of medical payment processing is still paper based. Sorting, reconciling, verifying, posting, and handling paper payment processing payments costs about $22 billion a year and is a big reason for rising health care costs in the US.

One way to automate payment processing for paper checks is through “extended” lockbox functionality. These lockbox facilities provide a method to sort and image checks as well as explanation of benefits and other medical payment processing documents. Extended-lockbox technology can take data from EOBs and populate electronic remittance forms and other documents with data in a medical provider’s accounts-receivable system.

Government mandates for standardized electronic medical data-reporting formats include payment processing. But, the US government is still debating health care reforms. If passed, the reforms will take years to implement. A Senate proposed mandate for medical billing reporting by 2014 was recently pushed forward to 2016.

ACH payments are highly effective for medical processing.

According to a new study with Qwest Communications, Fiserv and Aspen Analytics , electronic billing clearly benefits that bottom line. By analyzing the customer bill payment

Habits of more than 8 million people over an 18-month time period, the study revealed that how customers receive and pay bills has a big effect on churn and profitability.

Findings from the study are that customers that use ebilling are:

• 12.5% less likely to leave the provider
• 35% more likely to pay promptly and completely
• purchase 20% more services than those who don’t use ebilling

Automatic, recurring payment users are:

• 14% less likely to leave the provider.
• 86% more likely to pay bills on time.

Consumers who use both e-bill and recurring payments are more loyal and more profitable than other customer segments. Companies should deliver ebilling both via from company websites and also through financial institution bill payment portals that allow consumers to log on and pay bills through online banking.

ebilling using ACH payments is an excellent choice.