Paybyweb conforms with - and criticises - Nacha rules

Paybyweb conforms with - and criticises - Nacha rules

Florida's has announced compliance with new online payment rules developed by Nacha - the US-based Electronic Payments Association - while complaining that the regulations do not go far enough.

The regulations, designed to enhance security for Internet payments from consumer current accounts, are slated to go into effect on 16 March, 2001. Under the new regime, Nacha will require companies offering an ACH (electronic debit from current accounts) as an Internet payment method, to:
* ensure that the originator has a secure Internet session with the receiver prior to the transmission of any banking information;
* ensure that the originator is utilising a commercially reasonable fraudulent transaction detection system; and
* ensure that the originator has verified that routing numbers and account number structures are valid.

Paybyweb president, David Weiss does not feel the new regulations go far enough. "Anyone can validate a routing number with a simple mod-10 algorithm. Our job, as a payment processor, is to provide a balance between protecting the consumer from potential Internet security risks, and protecting the merchant from consumer fraud."

He claims that Paybyweb is the only major player in the electronic cheque-payment industry to offer live bank verification. "With our `Verification Plus' service, our operators actually call the consumer's bank for every transaction, verifying routing and account numbers, as well as availability of funds. Without that, there is no real way to know whether the checking account information provided by the consumer is valid."

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