NACHA Developing E-Commerce Payment Rules

Electronic payments group NACHA will develop operating rules and best practices for Internet transactions that use the Automated Clearing House Network for payment. The initiative could lead to the greater use of the ACH Network as a payment method for e-commerce transactions, says the Herndon, Va.-based association. "As e-commerce matures, consumers and businesses will expect to have payment choices, just as they do in the bricks-and-mortar world," says NACHA chairman Kevin O'Brien. "Our goal is to ensure that the ACH Network is prepared for the future by serving as a safe and reliable method for consumers and businesses to make payments over the Internet." In making or receiving Internet-initiated ACH payments, a consumer or a business typically provides a routing number for their financial institution and the account number to which the payment is credited or debited. An explicit payment authorization is required. To develop the operating rules, NACHA has formed a work group that will examine issues such as payment authorization, authentication, fraud deterrence, payment system risk and minimum security standards for Internet-initiated ACH payments. The review is expected to be complete by mid-September 2000. Also, NACHA's Internet Council will develop an industry best practices guideline. The ACH Network serves 20,000 financial institutions, 2.5 million businesses, and 100 million individuals. In 1999, there were more than 6.2 billion ACH payments made, says NACHA, worth more than $19 trillion.