The roll out of Same Day ACH (SDACH) Phase I by the Electronic Payments Association (NACHA), the administrator of the Automated Clearing House (ACH) network, in September 2016 led the payment industry to dramatically adopt same day transactions. It accounted for approximately 13M amounting to more than $18B in QTR 1, 2017.
Assessing the Impact of Phase I
With Same Day ACH for credits, financial institutions (FIs) offered faster services to customers such as same-day payrolls, business-to-business payments and account-to-account transfers. Businesses had better control over their payment methods. However, with increased funds transfer, there still remains a restricted time-frame available to review payments and investigate suspicious transactions. This has resulted in a quick upsurge in fraudulent activities.
Alert! More Hackers Are Now Targeting SDACH
Post phase I implementation, to counter new fraud challenges FIs continue to make new investments on cyber security infrastructure, however it has been observed that FIs are yet devoid of advanced tools and resources to respond to potential threats, real time. The high transaction volume and immediate payments system allure hackers to take leverage of confined payment windows for making fraudulent transfers. Fraudsters have been laying traps to make customers unknowingly install data breach malware that give them easy access to customer credentials. The fraud detection and prevention becomes complex as the recipient accounts are usually not verified ahead of each transaction. It is now even more imperative for FIs to integrate cutting edge technology along with behavior analysis into current infrastructure to defeat fraudsters.
Measure your Preparedness for Phase II
The implementation of Same Day ACH Phase II taking place on September 15, 2017 will offer same day processing of ACH debits with ACH credits barring international transactions (IATs) and high-value transactions above $25,000. Eligible transactions account for approximately 99% of current ACH Network volume.
With LESS THAN two months remaining, FIs need to urgently update their existing fraud prevention infrastructure to take proactive steps in reducing unauthorized transactions. FIs must review their current payments processes to analyze the impact on liquidity. Outperform hackers and improve customer experience!
The expanding SDACH network will provide increased opportunities to fraudsters only adding to the disruption.
Quatrro Processing can readily provide support to FIs with an e2e fraud prevention solution to combat emerging threats and ensure legitimate payment transactions.
Quatrro welcomes your thoughts and suggestions. Write back to us for free expert suggestions on Same Day ACH Phase II preparedness.