Same Day ACH Will Challenge Fraudsters, Improve Other Payments

Starting on September 23, all financial institutions in the U.S. will be able to accept Same Day payments, with the option to originate them.

The August edition of the PYMNTS.com Faster Payments Tracker™, powered by NACHA, contains an informative interview with Steve Kenneally, Vice President of the American Bankers Association, to get his perspectives on this important step forward for banks, FinTech players, businesses, and customers.

Keneally notes that because the ACH (Automated Clearing House) electronic network is already in place and in use by many financial institutions, adoption of Same Day payments will not be the jarring experience many fear.

Some worry that a faster clearing means faster fraud. Conceptually, faster payments should make it more difficult to execute on fraud, because the window is shorter to get the money. That’s part of the story in check payments, where we saw a decline in successful attempts. However, if accounts are hacked, it could mean the money is transferred to the criminals faster as well. The fraud rings will continue to innovate and find the gaps – of that we can be sure.

Marianne Crowe, VP of payment strategies at the Federal Reserve Bank of Boston, said that the Fed will not be revising its Faster Payments security strategies because safety has been a priority since the start. We’ll see if the ACH fraud prevention vendors are on top of their game!

As the industry moves toward faster payments, other payment channels are challenged to improve. The US check clearing networks are impressive with their ability to clear checks, both in direct bank-to-bank clearing as well as via centralized services. However, now that ACH is taking a step forward, will technology vendors find a way to improve the check experience?

How about real-time check fraud prevention at the ATM or kiosk? Or, improve check cashing processes where large banks still lose millions from counterfeits and forgeries.

The industry is in an exciting time right now for both new and existing players. Let’s keep engaged and see who wins and who loses!

Your thoughts?

Download the detailed PDF at pymnts.com.