Posted by Mark Ranta on 18 Jun 2020
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:
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?