Compliance and innovation are two words not commonly used in the same sentence, but that’s exactly what we talked about in our recent webinar where we joined Nacha’s Sr. Director of ACH Network Rules, Amy Morris, to discuss the upcoming rule changes for WEB Debits, what that means to payment workflows from a billing and payments standpoint, and most importantly, what it means in terms of unlocking an opportunity for innovation. 

So, what are the upcoming rule changes for WEB Debits?

From a high-level, the new rule means that initiators of ACH payments will be responsible for validating a receiver's account before sending the payment instructions into the network. The overall goal of this rule change is to reduce fraud. However, it is also a chance for financial institutions to benefit from operational efficiency and cost savings, by reducing bad DDA returns (by upwards of 40%) and NFS or insufficient funds returns (by as much as 45%). Those reductions turn into significant cost savings to your billing and payments operation. 

But why stop just at implementing technology to meet this one rule change? 

Our webinar went on to discuss this as the opportunity for innovation for our payments ecosystem as we shift from an analog payments era (one dominated by processes and systems from the last century) to a real-time payments era (underpinned by new and emerging central infrastructures such as RTP^® from The Clearing House). These new payments are going to usher in the ability to go beyond money movement to value-added and cost-reducing services geared more towards customer satisfaction, than protecting it from unhappiness (i.e. fraud). 

From a consumer standpoint, this era change has already occurred. Our modern lifestyles have been driven by the explosion of technology and the advances that have been made over the last few decades of the tech revolution (it is still weird to say out loud but the iPad hasn’t even celebrated its 10th anniversary).

What does this mean in terms of bill presentment and payment?

Businesses have to go beyond just enhancing the existing experiences they support every time a new rule change comes into play. It’s a chance to look at that strategy and examine:

• Are there new channels available from our partners (or the market) that we can interact with new customers/members/clients/patrons to create better experiences for them?
• Should we be looking at our solution offering as a distinctly different piece of the puzzle from the rest of our experience layer? Or is it time to think of this as a platform where we can easily add to and/or alter our solution offerings to meet demand as it evolves (who would have thought 10 years ago that AI voice-driven experiences would be where it is now?)
• Don’t be afraid of new technologies. This goes without saying, but the evolution cycle from TTFHW, to being the number one thing under the tree in December is compressing. As new technologies become available the best thing to do is roll up your sleeves and jump in!
• Choose a partner (or partners) rather than a provider. The innovation in this space may be built by individual companies, but they will most certainly be perfected by communities! 

So if you start the journey to where you meet your customers where they want to pay with how they want to pay, with digital payments transformation, what are the business outcomes you could expect?

• Cost reduction – While there may be incremental spending required to implement new technology, as mentioned in our webinar, it may actually lower your overall TCO. Whether that’s a reduction of penalties or fees, or a reduction to call centers for level one support, there can be notable reductions in overall costs with modern systems. 
• Streamline operations - This is an extension of the cost reduction bucket. To have a great front end/client experience, your platform and workflows internally have to be simplified as well. As data and client expectations move to real-time, the back end has to keep up. By modernizing your payments platforms this benefit can’t be overstated and shouldn’t be overlooked. 
• Improving the payer’s experience – The payer experience is vital. Giving customers a choice and putting them at the center of discussion is a sure way of improving their satisfaction. 
• Rapid adaptation to industry change  – Adapting quickly to changing business needs is something that is a core tenant at Alacriti. Speed to market with new and improved experiences, along with rolling out functionality in advance of rule changes is key to minimizing the impact on end-user experience. Also important, having a solution that is adaptable in this new payment era we are entering. 

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