Oct. 2, 2012 – NAFCU on Monday lodged support for a NACHA proposal aimed at creating greater transparency for automated clearinghouse-based, person-to-person payments and to standardize the use of the ACH network for such payments.
“As the use of cash and checks decrease and P2P payments increase, credit unions and other financial institutions will benefit from standards that promote and facilitate P2P transactions,” wrote Tessema Tefferi, NAFCU’s regulatory affairs counsel.
NACHA – The Electronic Payments Association, includes six elements in its proposed P2P ACH standards:
- a standard entry class code for P2P credit transactions sent from a consumer’s direct deposit account;
- standardized formatting requirements for WEB credit;
- requirement that WEB credits and debits contain a value that lets the receiver know the entry is a P2P transaction;
- a rules clarification for Notifications of Change;
- a new code to allowing the originator to provide a website (URL) link to additional payment-related information; and
- authority to include an Addenda Record for a WEB credit to contain more information in free-form text.
Tefferi said the above provisions will better enable credit unions and other financial institutions to originate ACH credits for their members and customers. He noted benefits to originating and receiving institutions.
While supporting the proposal, Tefferi said NAFCU “strongly urge(s) NACHA to ensure that network participants, especially smaller institutions like credit unions, are given adequate time to make any necessary changes to the systems or other aspects of their operations.”