In 2020, Americans sent or received $61.9 trillion in ACH payments. The more ACH payments grow (ACH payments grow by more than $1 billion each year) and become faster, the greater the risk of fraudulent transactions. Same Day ACH payment volume grew 38.6% compared to 2019. While ACH has a lower fraud rate than other payment methods, losses can be substantial for victims.
Nacha, the organization that administers the ACH payment system, is pushing for stronger anti-fraud controls. Merchants will be required to validate account information used for ACH transactions before allowing a transaction to process.
WEB Debit Account Validation Rule
Currently, Nacha requires merchants who process online ACH transactions to use a “commercially reasonable fraudulent transaction detection system to screen WEB debits for fraud.”
Nacha is adding account validation to this requirement, for any payments using a new account number for the first time. The requirement applies to all merchants, regardless of size or industry.
Use of an account number with a proven history of prior successful payments is a sufficient means for validation for use of the account with a new WEB authorization.
While Nacha will not enforce this rule for an additional period of one year from the effective date as long as companies are making a good faith effort toward compliance, HealPay currently uses real-time database bank account verification. Consumers who attempt a payment using invalid bank account information will not be allowed to complete their transaction.
Expanding Same-Day ACH
“This new rule expands access to Same Day ACH by allowing Same Day ACH transactions to be submitted to the ACH Network for an additional two hours every business day,” says Nacha. “The new Same Day ACH processing window will go into effect on March 19, 2021.”