The Federal government will soon begin to disburse economic stimulus payments, many of which will be made by Direct Deposit. NACHA has discussed operational aspects of these Direct Deposits with the U.S. Department of the Treasury and its Financial Management Service (FMS).

In addition to information already being issued, NACHA sought additional information from FMS on three points:

How will the payments be identified?

The payments will appear identical as normal tax refunds made by Direct Deposit, and the bulk of the stimulus payments will have settlement dates of Fridays May 2, May 9, and May 16, 2008. Many, but not all, of the stimulus payments will be in round dollar amounts.

How will individuals be notified?

The IRS has already mailed notifications to individuals about the payme ...

Take a New Look at Direct Deposit and Direct Payment

May is National Direct Deposit and Direct Payment Month

HERNDON, Va. – May 7, 2008 – A financial industry group is encouraging consumers and businesses to take a new look at using Direct Deposit and Direct Payment.  Although the two payments options have been around for more than 30 years, the group will use the national awareness month in May to update information on old assumptions about the two payment options.

Three out of four workers who are offered Direct Deposit use it.  However, there are still many workers who are not offered this benefit, primarily employees of small businesses.

“Most small business owners still think Direct Deposit is only efficient for large corporations.  That’s simply not the case any more,” said Lisa Mon ...

NACHA Launches Secure Vault Payments Pilot

Secure Vault Payments Offers Consumers a New Way to Pay Online

HERNDON, Va. – May 5, 2008 – NACHA – The Electronic Payments Association announced today that Secure Vault Payments is now a live pilot program to test online consumer purchases and bill payments. The Automated Clearing House(ACH)-based Internet payments network allows consumers to conduct e-commerce and bill payment transactions without sharing personal account information.
 
Columbus Bank and Trust Company, a Synovus bank, was the sponsoring and authorizing bank for the first live transactions originated through consumer purchases at igourmet.com, a leading online retailer.

“Secure Vault Payments shows that the financial services industry can develop the next-generation of payment solutions on the structure of existing ban ...

Purpose

This bulletin presents guidance to national banks for due diligence, underwriting, and monitoring of entities that process payments for telemarketers and other merchant clients. As detailed in several OCC issuances, certain merchants, such as telemarketers, pose a higher risk than other merchants and require additional due diligence and close monitoring. This bulletin supplements, but does not replace, existing guidance related to Automated Clearing House (ACH) risk management, merchant processing, and remotely-created checks (RCCs).

Background

The OCC has seen a variety of relationships between banks and processors in which the processor uses its bank relationship to process payments for merchant clients. Often the processor uses a bank account as the vehicle to conduct such payment processing. For exa ...

NACHA Operating Guidelines – Company Name Identification Rule Amendment

 On June 20, 2008, the NACHA Operating Rules will be amended to incorporate clarifications to the definition of the Company Name Field within the Company/Batch Header Record. This Supplement #3-2008 provides updated NACHA Operating Guidelines related to these changes, adding new language to help clarify the proper use of this field. Examples of origination scenarios and the proper use of the Company Name Field in those cases are provided to assist Originators and ODFIs in properly identifying Originators of ACH payments.


Formal Rules Interpretation – Proper Use of SEC Codes and Aggregation of Transactions

On March 20, 2008, NACHA’s Board of Directors approved a delay in the implementation date of the Formal Rules Interpretat ...

Phase II participants include ABN AMRO, Camara Interbancaria De, Canadian Payments Association, EPN, Equens, Eurogiro, the Federal Reserve Banks, Fifth-Third Bank, JPMorgan Chase, National City, PayPro, SECB Swiss Euro Clearing Bank, Standard Bank of South Africa, Standard Chartered Bank, U.S Bank, Wachovia, Wells Fargo, World Savings Banks Group and Zion’s Bank. NACHA—The Electronic Payments Association will serve as Secretariat for Phase II of the project.

“Representatives from 30 organizations representing 15 countries participated in Phase I of this project. We are pleased that we have been able to assemble a coalition of diverse organizations and that this group has together endorsed the feasibility of this project. With this consensus, we can now enthusiastically move forward to Phase II where we will start developing the rules, standards, operating procedures and guidelines to improve non-urgent, cross-border payments,” said Alan Koenigsberg, Core Cash and Card Solutions Pr ...

UPDATE:  The Financial Management Service (FMS) is temporarily delaying the implementation of the suppression of SSNs in Supplemental Security Income (SSI) payments originally scheduled for April 1, 2008.  This will allow additional time for financial institutions to make preparations for the change and for FMS and the Social Security Administration (SSA) to evaluate the impact on return and notification of change entries.  A new date will be announced soon.

The Department of the Treasury, Financial Management Service, recognizes the importance of the privacy of SSN information and is in the process of developing a phased-in strategy for suppressing SSN's in outbound ACH Social Security payments.

Phase I

Supplemental Security Income (SSI) ACH payments (approximately 51.8 million annually) disbursed by the U.S. Treasury, Financial Management Service (FMS)

A new study shows the environmental benefits of using electronic payments

HERNDON, Va., March 18, 2008 – The PayItGreen™ Allianceis asking consumers to turn off paper bills and statements and make payments electronically.  The Alliance, comprised of leaders in the financial and consumer billing industries, was formed in 2007 to educate consumers about the positive environmental impact of choosing electronic bills, statements and payments over paper alternatives.  The Alliance has named April as PayItGreen Month to launch this initiative.

According to a new study commissioned by the Alliance, if one in five households switched to electronic bills, statements and payments, the collective impact would annually save 151 million pounds of paper, avoid filling 8.6 million household garbage bags with waste and avoid producing 2 million tons of greenhouse gas emissions.
“Turning off the pap ...