The Association for Financial Professionals (AFP) has called on Nacha, the Electronic Payments Association, to delay its rule change permitting corporate cheque conversion to automated clearing house (ACH) debits.
In a letter to Nacha, AFP reported that most members oppose having cheques converted to ACH debits and needed more time to learn how to opt out of the initiative and place ACH debit blocks or filters on disbursement accounts.
In support of its claim, the AFP pointed to a January survey in which 79% of corporate treasury and finance professionals said their companies would not permit cheques to be converted to ACH debits.
Conversion disrupts corporate cash management practices and controls and increases exposure to fraud claims the AFP. The Association argues that cheque payers - not payees - should retain control over payments and decide how they should be made.
Under the proposed Nacha rule, paying companies would be able to prevent conversion if they use an auxiliary on-us field in the MICR line of cheques, which usually contains the serial number, but the AFP says its survey revealed widespread uncertainty about this.
If Nacha proceeds with its proposal, the AFP says it recommends a delay in implementation until March 2004 so the payments association can conduct a corporate education campaign to inform firms about the opt out mechanism.