Going It Alone…

Every once in a while, I get a question from someone about sending a transaction to <insert name of party here>.  Usually, Grandchild, college bound son/daughter, babysitter, anyone really.

Can they do it?  How do they do it?

The shorts answers are, yes, you can do it and contact your Bank or Credit Union.

Before I get to the fuller answer, let’s talk about options – you know I like doing that.  While this blog is all about ACH, I’m going to deviate for just a moment to make mention of ways you can transfer money easily and inexpensively between two individuals (not businesses)  that are not really (at least on the surface) ACH.

1)   Prepaid Cards – Visa, Mastercard, American Express, they all have them.  Like a gift card.  They are reloadable, usually online and sometimes at brick and mortar locations.  They generally have some kind of fee, monthly or per transaction, but are accepted at many, many locations.  Sometimes the transaction to fund the prepaid card is done by ACH in the background.

2)  PayPal – Eveyone knows who they are.  You can keep money in an account to buy things or just transfer money to others who also have a PayPal account.  Pretty basic.

3)  Obopay and other mobile-to-mobile payment providers like them.  I really like these guys – their process makes me seem hip.  I’m not hip, but it makes people think I am.  You use your cell phone to make payments from a previously set up account to someone else who has an account and then those funds can either be kept in that account for future use or accessed by a prepaid card.  They all do it a little differently, so check them out if you want details.  Sometimes this is done by ACH in the background.

Now, clearly via ACH.  The SEC Code – you remember those – Standard Entry Class Codes is CIE.  It stands for Customer Initiated Entry.  They can only be Credits and can only be P2P or Person to Person transactions.  And get this…no pesky authorization requirements.

See, the ACH Operating Rules specifically don’t require authorizations between “natural persons”.  Now this might mean that while you cannot send funds to either Edward or Jacob (mostly because I’m not sure a vampire or warewolf would considered a “natural person”, you could send money to your son at college, pay the kid who mows your yard or even pay your best girlfriend for your half of dinner last night.  Of course, you have to know the other person’s Routing Number and Account Number.

That being said, if you’re interested, talk to your Bank or Credit Union.  It’s an easy, inexpensive, frequently free (like bill payment) and quick.  I highly recommend it.

ACHGuy

Fighting Back – Beyond 60 days

Fighting back starts earlier than you think.

I’ve already told you about what can happen during those first 60 calendar days in But I Have the Authorization!.  How a customer can make a claim and return a transaction as Authorization Revoked (R07) or Unauthorized (R10) without notice to the Originator/Merchant.

Now let’s talk about after those 60 calendar days.  What happens and what can/should you do.  How you can fight back.

One of the many things I do around here is field requests for Proofs of Authorization.  These are generally requests made by an RDFI in relation to a query about, or a challenge to a transaction, by a Receiver.

These requests generally only come about when we are past that 60 calendar day timeframe.

Let me give you a bit of background; Regulation E says, essentially, that a consumer may challenge any debit transaction posting to their account for up to 60 calendar days from the date information relating to the transaction is made available to them.  Traditionally, we use the Statement Date. 

As you know, ACH Operating Rules say 60 calendar days from the Settlement Date.  This could potentially add as many as 30 calendar days to a dispute time frame.  Beyond the 60 calendar days, an RDFI cannot just return the transaction in question.  They do have a couple of options however;

1)  Take a hit.  Depending on the value of the transaction in question and the value of the customer as well as whether we’re talking about a single entry vs. a recurring transaction, many RDFIs will simply credit the customer/Receiver, write it off and be done with it.

2)  Initiate a Regulation E investigation.  This means that among other things, the RDFI may request a copy of the authorization from the ODFI, who makes the request to the Third Party Service Provider (if there is one) who in turn makes the request to the Originator.

That being said, it is important to know that Regulation E only exists between the Receiver and the RDFI.  It does not extend to the other parties of the ACH transaction.  However, per the ACH Operating Rules, the RDFI has the right to a copy of any authorization relating to any transaction posting to any account in their service.

You should also know, if the RDFI is challenging a recurring transaction, the legitimacy of all related transactions could be brought into question.

You, the Originator, are required by the ACH Operating Rules to respond to such requests for Proof of Authorization.  This is your chance to fight back…

Options:

1)  Provide a copy of the requested authorization by the deadline in the request

2)  Offer to just credit the Receiver

3)  Contact the Receiver immediately and work it out before the deadline in the request

4)  Do nothing/don’t respond.  After the deadline, the transaction(s) will be returned

Obviously, option #1 is the best way to go.  You’re protecting your company and your company’s reputation by showing that you indeed have an authorization for any challenged transaction(s).  Options 2 and 3 are good, but you should be sure to respond to the request so the RDFI can be informed about what you’re going to do.  I don’t recommend #4.  The bottom line is this; I may be a graduate of the Dionne Warwick School of Mindreading, but my skills are rusty and I won’t necessarily know what you want to do unless you tell me.  And I don’t like accepting returns unless I have to.  Communication is a good thing.  And if you’re not sure what to do – Ask!

Finally!  Fighting Back.

Some of you might think that fighting back starts when you see a return or with the authorization itself.  I would argue that it starts before the authorization is even written.

Fighting back starts with ensuring that you have a workable revocation process and procedure in place and continues with ensuring that you have a process and procedure in place, to quickly and easily access those soon to be written authorizations.

Fighting back includes having a well written authorization that meets all the requirements of an authorization based on the type(s) of transactions you will be initiating (see my individual SEC Code posts or check out the ACH Operating Rules or talk to your local Regional Payments Association (click here to find one near you).  It is in your best interest to have your compliance person and/or your legal counsel either help you or at least review any authorization before you roll it out for general use.  There are lots of really good sample authorizations out there that will give you a good start, but there is nothing better than having someone in the know with your company’s best interests in mind write or review.

Further, fighting back includes ensuring that your authorization is clear and readily understandable – I mention that separate from the general authorization requirements because it’s that important.  Nothing causes problems faster than ambiguity or fine print.

Fighting back includes ensuring that when the transaction posts to your customers’ account it correctly reflects your company’s name as they know it.  If your company name is ABC Company, but the transaction shows your parent company’s name Brand X Company, there could be issues.  If the transaction shows an odd abbreviation or just your phone number, there could be issues.  Talk to your Third Party Processor or ODFI to ensure that what shows to the Receiver will be recognizable to the Receiver.

Fighting back includes making sure your Third Party Processor or ODFI have updated contact information.  You can take all the precautionary measures in the world, but if I have an old, invalid, unused or unchecked e-mail address  and/or phone number, my request will go unanswered and you’ve just defeated yourself.

Fighting back includes using the Company Entry Description field.  It’s 10 characters long and will appear on the Receiver’s monthly statement.  Use it to state the purpose of the transaction.

And last, but not least.  I cannot stress enough the power of communication.  I’m not suggesting that you have to notify your customers every time you’re getting ready to send them a debit, but a heads up reminder couldn’t hurt.  Communicate your revocation process in easy to understand terms.  Return customer phone calls in a timely manner.  Respond to e-mail queries in a timely manner.  Remember what your grandmother always told you about wearing clean underwear…I mean about catching more flies with honey.  A courteous, friendly, responsive, knowledgeable and empowered Customer Service person(s) will go a long way.

To me, fighting back is mostly about planning ahead.  What is it they say?; the best defense is a good offense?

And to make sure our legal folks don’t get upset with me:

Disclaimer:  The information provided does not constitute legal advice.  For any specific legal questions, you are advised to seek the counsel of an attorney.

– ACHGuy

But I Have The Authorization!

Dealing with R07 and R10 Returns

Have a seat, this is a long post.

I think the one ‘Returns’ related conversation I have more than any other, relates to dealing with R07s and R10s.  I have this conversation so often that I decided to talk about it;

Generally it starts something like this; “the customer never told me they were sending it back” or “I got this transaction returned as Unauthorized or Authorization Revoked and I have the authorization right here, what do I do?”

I need to provide some basic and background info here first, so bear with me…

Let’s start with R07s.  R07 – Authorization Revoked – We talked about the definition in my post Return of the ACH Transaction – Part II.

We already know that any authorization for recurring transactions must include revocation language informing the Receiver of the manner by which they can revoke their authorization. 

If the Originator receives a proper and timely revocation, they must immediately stop and not process any further transactions based on the authorization.

If the Originator receives an R07 return whether they are aware of any revocation or not, they must immediately stop and not process any further transactions based on this authorization (even though the authorization may not have been properly revoked) until the situation can be investigated.

This is a great place to note the benefit of requiring that a revocation be in writing and sent by traceable mail. 

 This can go 2 ways:

Way #1)  the Receiver is willing to let the Originator continue to process transactions, or

Way #2)  the Receiver is not willing to let the Originator continue to process transactions

 We’ll come back to this.

 Now let’s talk about R10s.  R10 – Unauthorized – We talked about the definition in my post Return of the ACH Transaction – Part II.

 If the Originator receives an R10 return, they should immediately stop and not process any further transactions based on this authorization until the situation can be investigated.

 This can go the same 2 ways as above.

 Receipt of an R07 or R10 will only happen within 60 calendar days of the Settlement Date of the original transaction and the Receiver is not obligated to tell you or your ODFI or your Third Party Processor or anyone for that matter, except their financial institution – the RDFI.  So, if the Receiver returns a transaction within those 60 calendar days and you (the Originator) are sitting there holding an authorization, what can you do?  Technically, within the ACH Operating Rules; nothing.  Really.  Nothing.  However, you have options – outside of the rules.

 Option 1 – Investigate

Pick up the phone – open some line of communication with the Receiver and find out what’s going on – don’t assume and don’t assume the worst.  I have seen where;

1)  a transaction was returned in error, the RDFI inadvertently selected the wrong transaction

2)  one co-signer authorized a transaction and the other co-signer, not knowing, challenges it without checking with the first co-signer.

3)  the company name was not recognized (strange abbreviation or dba name) or the Receiver forgot they set something up. 

 There are too many possibilities to assume this was done intentionally or maliciously.

 In order for a Receiver to return a transaction as R07 or R10, they must complete a Written Statement of Unauthorized Debit.  You have a right to a copy of the document (which must include the reason for the return).  As part of your investigation, you may request a copy of it.  Contact your ODFI or Third Party Service Provider to request a copy, understand there may be a fee involved.

 This is where the ‘ways’ come in:

Way #1)  the Receiver is willing to let the Originator continue to process transactions

Get it in writing, get it in writing, get it in writing…I cannot stress that enough.  Either get a new authorization (which would be preferable) or something in writing (dated) that explains the reason for the return and their agreement to allow you to continue to initiate transactions based on that original authorization.  It may be a bit of a pain in the backside for you or an annoyance to your customer, but it’s all about protecting you, the Originator.  You can continue to process transactions based on the original, updated/approved or new authorization at this point.

Way #2)  the Receiver is not willing to let the Originator continue to process transactions

Regardless of the reason, if the Receiver is not willing to let you continue to process transactions to their account based on that authorization, don’t.  If you do, you’ll be in violation of the ACH Operating Rules and nobody wants that and you cannot afford that.    This takes you to…

Option 2 – Legal Recourse  Always check with your legal counsel before seeking any legal recourse.

The authorization you have is, for all intents and purposes, a contract and you have hundreds of years of contract law to protect you.  You could;

1)  Send the item to collections

2)  If you have an attorney on staff or retainer, have them send a nasty-gram

3)  Seek redress in court (depending on the amount in question, small claims court)

All of this of course depends on you having a valid, proper authorization and takes place outside of the ACH Network, directly between you (the Originator) and your customer (the Receiver).

Before you go down this road, besides just consulting your legal counsel, I recommend that you ask yourself this question…Is the value of this transaction or authorization sufficient to warrant all of this additional time, energy and money? 

 If the transaction is for $4.95, the answer is most assuredly ‘No’.  However, if the transaction was for, say $495.00, the answer might be ‘Yes’ or if it was for $1,400.00, I would assume the answer would be a big ‘Yes’.  You need to know where your line in the sand is…how much are you willing to let go vs. how much is too much.  Or for that matter, is any amount too much?  Every Originator will give me a different answer – As an Originator, you must decide for yourself.

An Option to Your Options:

Sometimes I get an Originator who wants to just call the RDFI and assumes they can just send them a copy of the authorization and all will be good.  More power to you. 

However, keep in mind, that unless you happen to bank at the same bank as your customer, chances are pretty good that the RDFI will do nothing for you.  Chances are they won’t even be able to confirm whether Mr. or Ms. Customer has an account with them.  They don’t know who you are, they owe you nothing and they are bound by privacy regulations such Gramm, Leach, Bliley which restrict the release of private information.

That being said, sometimes you’ll luck out.  I’ve heard stories of Originators calling the RDFI and the RDFI gladly helping out.  I’m not suggesting that RDFIs aren’t over-run with helpful people, I am however suggesting that that event was the exception, not the rule.

So, I won’t tell you not to contact the RDFI directly, but I am telling you that you probably won’t get anywhere, so don’t be disappointed if they turn you away and buy an extra lotto ticket if they offer full disclosure.

 Speaking of disclosure:

Our legal folks would be very upset with me if I published a post like this without some kind of legal stuff talking about how I’m not an attorney, anything I say should not be construed as legal advice, etc., etc., so here it is:

 Disclaimer:  The information provided does not constitute legal advice.  For any specific legal questions, you are advised to seek the counsel of an attorney.

ACHGuy

ODFI vs. Third Party Processor: How to Decide…

I get a lot of questions asking for advice on how to do this or how to do that and while that wasn’t the original direction of this blog, I decided to branch out a bit and do some ‘How To’ writing. 

I thought the best first question to go with, relates to deciding whether to use an ODFI or a Third Party Processor (TPP). 

The question comes in many different forms, but the bottom line is that there is no easy answer.  Here’s the deal; every Originator is different.  Their needs are different, their goals are different, their level of ACH/Legal/Technical knowledge is different and of course, their budget is different.

So, while I cannot give you an answer as to which is better (well, I could, but some might argue that I’m biased – after all, I work for a Third Party Processor – I’ll try to be objective), I can give you some food for thought.  Here are some things to consider that I hope will make your decisioning process easier;

Existing Relationship: 

There is something to be said for an existing relationship – assuming you’re happy.  Chances are, you already have a relationship with a Financial Institution (FI).  If your FI operates as an ODFI, it could be simple enough to leverage and expand that existing relationship by simply adding ACH processing.  If your FI does not offer ACH services (or they don’t process the type of transactions you need) then you need to do a search.  At this point, if you have to weigh the difference between searching for a new banking relationship vs. a TPP, go for the new TPP.

This might also be a search by design – meaning your upper management/executives/board of directors might require you to select a number of vendors and go through a sort of bidding process.  If you go this route, I highly recommend expanding your options to include both ODFIs and TPPs.

Underwriting:

Whether using an existing relationship or a new one, you will likely have to go through an underwriting process – kinda like the last time you got a car loan.  This is what the ODFI or TPP uses to determine whether they want to process for you.  There is a ton of information that go into making this decision.  Everything from your company (and perhaps personal) credit score, financial stability, type of business, number of years in business, type of transactions you’re planning to process and much, much more. 

This is where that existing relationship can come in handy.  An ODFI that has known you for 10 years might be a little more forgiving when looking at a low credit score vs. a TPP.  On the flip side, the TPP might be willing to accept some transactions that a typical ODFI might not – based on risk.

If you find yourself being turned down by an ODFI or TPP, be sure to ask if you can get a referral to another that might be willing to work with you regardless of whatever kept them from working with you.

Reporting:

I used to think this was a no brainer, but I cannot tell you how many Originators I have spoken with over the years that didn’t think about reporting or thought about it, as an afterthought vs. part of the process.  I don’t know what information you need to do your job, but you do – or you should.  Whatever information that is, that’s what you should be looking for. 

Get sample copies of reports everything the candidates offer.  Understand the difference between standard reports vs. ‘we can do that’ reports.  Also, reporting should be an easy download or upload into your existing software – accounting or CRM compatibility is a good thing.

It’s important to get input from every department that might be using these reports and be sure you have everyone covered.  Your co-workers will appreciate the opportunity to provide their 2 cents.

Pricing:

Decisions of all sorts eventually come down to the almighty dollar.  This is where a TPP might have an advantage over an ODFI.  When you process with an ODFI, you are getting pricing based solely on the volume you are processing.  When you process with a TPP, you are getting pricing based in part on the total volume they are processing (that’s you + all the other Originators they process for).  If the TPP is processing a greater volume than the ODFI, then they will likely have a lower base price.

That being said, there is also a thing called ‘market price’ or pricing to what the market will bear.  With that in mind, think about this…just because your business is located in Anywhere City, Missouri, doesn’t mean you have to select an ODFI or TPP based in Anywhere City.  Just like everything else, there is competition and in larger markets you tend to find more competition.  Of course you also tend to find higher prices.

Be aware of hidden costs too;  per transaction fees, batch fees, file fees, monthly processing fees, hard copy invoice fees, return fees, charge back fees, ‘you weren’t looking so we charged you an extra $5.00 fee’ fee, and who knows what else.

The most expensive option is not always the best and conversely the least expensive is not always the cheapest.  When it comes to bidding processes, I have a former boss who advocated tossing out the highest and lowest bidders and selecting from vendors in the middle – there’s a lesson in there somewhere.

Customer Service:

Let’s face it, we all have examples of companies that have provided awesome customer service to us and we also all have examples of companies that have provided horrible customer service.  Be sure you understand what days and times Customer Service is available and find out what their turnaround time is…whether it be a simple question or a problem, if you have to leave a message, when will they get back to you.

If you don’t know the answer, you won’t know what question to ask.  What education do the Customer Service folks receive?  Do they get regular update training – like booster shots; monthly, quarterly, annually, ever?

A good customer service experience is worth its weight in gold.  If you have more than 1 not-so-great experiences, consider moving on to the next candidate.

Some last pearls and tidbits:

Don’t Be Afraid to Ask Questions – lots of questions.  The only stupid question is the one not asked.

Shop Around – don’t limit yourself geographically – there’s a whole country out there.

Due Diligence – I cannot stress this enough – include others (if possible) in your decisioning process. 

Peer Reviews – talk to your peers – who are they using – who do they recommend – have they heard of or used XYZ Company.

Trust Your Gut – if something doesn’t feel right, it probably isn’t.

Those are just my thoughts on this process.  I’m sure there are other things to take into consideration and if you’d like to share with the rest of the class, drop me a line.  I’ll gladly include your 2 cents and of course, give you credit.

ACHGuy

Survey Winners…

Congratulations!  We have 2 winners from my recent drawing. 

Our winners are Paul from Camborne, Porirua, New Zealand and Sherif from Minneapolis, Minnesota.

They each receive some very stylish ACH Direct gear.  Check it out; a black, branded leather padfolio, a neato ACH Direct mug and leather coaster, the coolest light up pen I have ever seen (a lifesaver when the electricity goes out and there is no flashlight to be found) and of course the grandaddy of all industry books, a copy of the Corporate Edition of the ACH Rules. 

Thank you to everyone who participated in the survey.

 ACHGuy

Who Are You? – Part II

UPDATE:  May 19, 2010 – I made a goof on the survey; The survey says that I’m giving away a copy of the 2010 ACH Rules Book – Corporate Edition, while the post says I’m giving away “a very cool and stylish padfolio, a tres cool light up pen, an ACH Direct mug and leather coaster.  You’ll each get a package containing all 4 items.”

Just to make life easier, I’m now giving away both a copy of the ACH Rules book – Corporate Edition and the great package of ACH Direct stuff.

With that, I’m extending the deadline to take the survey until June 2.

I apologize for any inconvenience and I hope you’ll take my survey,

ACHGuy

You have me at a disadvantage…you know who I am, but I don’t know who you are.

 I told you that I was going to put together a survey to find out who my readers are, and here it is.

 It won’t take you long and you don’t even have to tell me your name, just a few questions about who you are and what you think about my little blog.  And, I would be most grateful.

Here is the link:  http://www.zoomerang.com/Survey/WEB22AHPLRLUQX

Thank you for participating in the first ever survey of the readers of the ‘Everything ACH’ blog. 

As an additional thank you, I am planning a drawing for some great ACH Direct goodies.  I think 2 winners will do nicely.  Up for grabs is a very cool and stylish padfolio, a tres cool light up pen, an ACH Direct mug and leather coaster.  You’ll each get a package containing all 4 items.

 IF you would like to participate in the drawing, you will of course have to provide some additional information – see question #11.  The drawing will take place on May 19.  The winners will be notified by e-mail.

Thanks for sharing.

ACHGuy

2 of 8 – FREE Webinar – Authorization Requirements

Tomorrow – April 21, 2010 – is the 2nd in our series of FREE ACH educational webinars.

As I mentioned before, ACH Direct has partnered with UMACHA (Upper Midwest ACH Association) to bring you the best darned beginner level ACH Education for Free.  And I’m pretty sure that I mentioned that it’s FREE.  Oh, and it starts at 1:00 PM CT and should last about 90 minutes.

This fantastic series runs for 8 months covering topics ranging from a basic introduction to Returns and Unauthorized transactions to an entire session on ARC, POP and BOC.  Then to wrap up the year, we’ll tackle a couple of Check related sessions.

We always have a great mix of participants (from across the network), we encourage participation and we always leave room for Q&A. 

This month’s presentation is:  Authorization Requirements

Authorizations can be verbal, written or similiarly authenticated, or by notice – but there needs to be one in place for an ACH entry to be inititated.  This session will provide details on ACH Authorizations including, “Who is responsible for the authorization?”

We do ask that you register in advance. 

If you’re interested and I know you are, go to http://www.achdirect.com/news/events-teleseminars.asp.   

Click on the date/title of tomorrow’s presentation and you’ll be presented with the registration page. 

After you register, you’ll receive an e-mail with the log in and dial in details.

If you would like to register for multiple sessions, you will have to register separately for each one.  A bit of an annoyance I know, but what do you expect for free?  I mentioned it was FREE right?

If you would like a hard copy of the presentation, you can click on the link below the description and download a .pdf copy.

Should be a great time and I hope to hear you there.

Who Are You?

You have me at a disadvantage…you know who I am, but I don’t know who you are.

 I told you that I was going to put together a survey to find out who my readers are, and here it is.

 It won’t take you long and you don’t even have to tell me your name, just a few questions about who you are and what you think about my little blog.  And, I would be most grateful.

Here is the link:  http://www.zoomerang.com/Survey/WEB22AHPLRLUQX

Thank you for participating in the first ever survey of the readers of the ‘Everything ACH’ blog. 

As an additional thank you, I am planning a drawing for some great ACH Direct goodies.  I think 2 winners will do nicely.  Up for grabs is a very cool and stylish padfolio, a tres cool light up pen, an ACH Direct mug and leather coaster.  You’ll each get a package containing all 4 items.

 IF you would like to participate in the drawing, you will of course have to provide some additional information – see question #11.  The drawing will take place on May 19.  The winners will be notified by e-mail.

Thanks for sharing.

ACHGuy

Who Am I?

Do you know who I am?

I’m not talking about the D-List celebrity or self-important person who yells this at the bouncer who won’t let them into a club or at the person behind the counter who is trying to serve the customer who was in line first.  I’m talking about the person on the other end of the internet session or telephone line who wants to buy something from you.

Yup, I’m talking about WEB and TEL.  If you are processing WEB or TEL transactions, that question is one that needs to be addressed.  Now I know that you know that the ACH Operating rules require that you authenticate the identity of the Receiver for each transaction – before the authorization takes place.  But they don’t tell you how to authenticate that person.  Do you know how?  Are you doing it?  Please say ‘yes’.

From a practical standpoint or real-life perspective, I don’t.  I mean, I know the basics, but I don’t live this process – it’s a very back-end kind of thing to me.  So, I turned to our very own Leslie Hendrix, Vice President of Sales and Marketing and asked about it.

I didn’t really interview her, cause I’m not very good at that kinda stuff, but I asked her questions and she talked.  I even took notes.  OK, I interviewed her….

ACHGuy:  Ms. Hendrix, when you think of authentication for WEB and TEL transactions, what comes to mind?

Ms. Hendrix:  My, so formal.  I’m sure you know that the ACH Operating Rules require merchants that use ACH for WEB and TEL transactions to authenticate the identity of the Receiver using commercially reasonable measures. 

ACHGuy:  OK. Leslie.  Without sounding like you’re delivering a sales pitch for ACH Direct services, how is a merchant supposed to do that?

Note:  Merchant = Originator, but you already knew that. – ACHGuy

Leslie Hendrix:  There are many different services available in the marketplace to help merchants comply with the NACHA requirements. When I think authentication, I think Account Verification and Identity Authentication.

ACHGuy:  Can you give me an example or tell me a little about they work?

Leslie Hendrix:  Identity Verification services can be used to validate that someone is who they say they are.  Most identity verification services use a combination of publically available data in conjunction with private information.  Most services can optionally generate out-of-wallet questions for further identification, if necessary.

ACHGuy:  What about Account Verification?

Leslie Hendrix:  As far as Account Verification is concerned, there are many companies out there that offer a variety of services ranging from a simple Routing & Transit Number verification to Negative and Positive databases and even Funds Verification services. 

Note:  I included definitions of each of those below – ACHGuy

ACHGuy:  If a new Originator approached you, what would you recommend?

Leslie Hendrix:  I recommend that like most merchants, they should use a combination of identity and account verification services.  In the end, it’s all about protecting the merchant.  I also tell them that the most powerful verification services combine everything I’ve mentioned into one service to provide actionable, definitive responses on 100% of the checking accounts in the US. 

ACHGuy:  This is your ‘Buy my product’ moment.  Tell us what service, specifically, that you recommend and then sell it to me.  But keep it short, say 50 words or less?

Leslie Hendrix:  Thanks!  Specifically, I recommend a combination of IDVerify and ATMVerify.  This ensures that the merchant is in compliance with the NACHA rules and provides the merchant with reasonable assurance that the person is who they say they are and that the account information the consumer has provided to the merchant has a high probability of successful payment.  Interested merchants can find additional information about the services at www.atmverify.com and www.idverify.com.

Thank you to Leslie Hendrix, VP Sales and Marketing at ACH Direct for helping me out today.  And just for the record, if anyone is interested in ACH Direct’s verification services, they can contact our Payment Specialists at sales@achdirect.com or 866 378 0001.

I don’t generally care to ‘sell’ anything via my blog.  After all, it’s about education, not sales, but I needed some help and have zero budget.  With that in mind I hope you’ll forgive the shameless plug and more importantly, I hope you learned something today.  I know I did.

 ACHGuy

As mentioned above, here are the definitions promised.

Routing and transit verification – a service that will verify the validity of the routing and transit number

Negative database – a service that will determine whether there are any known unpaid items on an account

Account history database – also known as a positive database, these databases contain information about the history of items that have been presented on the account and whether or not the items paid successfully

Account current status verification – a service that will verify the current status of an account

Funds verification – a service that will verify that adequate funds are available in the account at the time of inquiry

It’s Free And It’s Not Too Late

Tomorrow – March 9, 2010 – marks the beginning of our 4th year of partnering with UMACHA (Upper Midwest ACH Association) to bring you the best darned beginner level ACH Education for Free.  And it’s FREE.  Did I mention that?  Oh, and it starts at 1:00 PM CT and should last about 90 minutes.

 It’s an entire series really.  Monthly, for 8 months we’ll cover topics ranging from a basic introduction to Returns and Unauthorized transactions to an entire session on ARC, POP and BOC.  Then to wrap up the year, we’ll tackle a couple of Check related sessions.

Each year, we have Banks, Credit Unions, Schools and Universities, Competitors, Merchants/Originators and Individuals – a great mix.

This month’s presentation is:  Introduction to ACH

Discover the basic principles of the ACH Network, the history, legal framework, participants and flow of ACH transactions.  Details on where the Originator fits into the “flow” of an ACH transaction and the route an entry takes before posting to the Receiver’s account will be discussed.

Now I know some of you are asking “What the catch?”  Here’s the deal – You have to register in advance. 

If you’re interested and I know you are, go to http://www.achdirect.com/news/events-teleseminars.asp.   

Click on the date/title of tomorrow’s presentation and you’ll be presented with the registration page. 

After you register, you’ll receive an e-mail with the log in and dial in details.

If you would like to register for multiple sessions, you will have to register separately for each one.  A bit of an annoyance I know, but what do you expect for free?  I mentioned it was FREE right?

If you would like a hard copy of the presentation, you can click on the link below the description and download a .pdf copy.

Should be a great time and I hope to hear you there.