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As higher ed institutions continue to evolve to offer more cashless payment solutions, automated clearing house (ACH) payments are becoming more popular. This week, Brad Smith, senior director of industry engagement and advocacy at Nacha, joins FOCUS to discuss the benefits of ACH payments for campus transactions. Learn more about ACH payments on campus, Nacha, and efforts to update the ACH rules for better risk management in the network.
What are ACH payments?
“If you get paid by direct deposit, you know what the ACH network is,” said Smith.
In 2022, 30 billion transactions were made through the ACH network totalling $76.7 trillion. Business-to-business payments through same-day ACH saw a 44% growth in 2022, and in the first quarter of 2023 alone, same-day ACH transactions grew by 94% compared to first quarter of 2022.
Institution implementation
Nacha’s role in ACH payments
For institutions implementing more ACH payment options on campus, Nacha is also working on a suite of tools to help educate students, parents, and vendors on why ACH is a good option.
Avoiding fraud
To help, Nacha provides a risk framework for partners that helps merchants address fraud. The first part of the framework are strict rules to set a solid anti-fraud foundation, which now includes a provision to validate transactions without needing to give out routing and account numbers. The second part is the operating guidelines that show merchants how to apply the rules to their processes.
Nacha recently rolled out new supplemental data security requirements to ensure data is secure while it’s at rest. This means that account information is unreadable, deleted, or masked properly any time ACH data is not being used. Third party vendors also held to the same standards as ACH originators to keep security a priority.
Best practices
Smith believes one of the ways to stay vigilant against fraud is to continue education on the latest trends. This can be managed with an institution’s relationship with their bank or processor and completing regular training to stay up-to-date on compliance and fraud trends. There are also different organizations that offer training to colleges and universities on the latest ACH rules, risk courses, and audit courses.
Learn more about ACH rules and alleviating risk at www.nacha.org/rules/new.
Special Guest: Brad Smith.
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As higher ed institutions continue to evolve to offer more cashless payment solutions, automated clearing house (ACH) payments are becoming more popular. This week, Brad Smith, senior director of industry engagement and advocacy at Nacha, joins FOCUS to discuss the benefits of ACH payments for campus transactions. Learn more about ACH payments on campus, Nacha, and efforts to update the ACH rules for better risk management in the network.
What are ACH payments?
“If you get paid by direct deposit, you know what the ACH network is,” said Smith.
In 2022, 30 billion transactions were made through the ACH network totalling $76.7 trillion. Business-to-business payments through same-day ACH saw a 44% growth in 2022, and in the first quarter of 2023 alone, same-day ACH transactions grew by 94% compared to first quarter of 2022.
Institution implementation
Nacha’s role in ACH payments
For institutions implementing more ACH payment options on campus, Nacha is also working on a suite of tools to help educate students, parents, and vendors on why ACH is a good option.
Avoiding fraud
To help, Nacha provides a risk framework for partners that helps merchants address fraud. The first part of the framework are strict rules to set a solid anti-fraud foundation, which now includes a provision to validate transactions without needing to give out routing and account numbers. The second part is the operating guidelines that show merchants how to apply the rules to their processes.
Nacha recently rolled out new supplemental data security requirements to ensure data is secure while it’s at rest. This means that account information is unreadable, deleted, or masked properly any time ACH data is not being used. Third party vendors also held to the same standards as ACH originators to keep security a priority.
Best practices
Smith believes one of the ways to stay vigilant against fraud is to continue education on the latest trends. This can be managed with an institution’s relationship with their bank or processor and completing regular training to stay up-to-date on compliance and fraud trends. There are also different organizations that offer training to colleges and universities on the latest ACH rules, risk courses, and audit courses.
Learn more about ACH rules and alleviating risk at www.nacha.org/rules/new.
Special Guest: Brad Smith.