A new outsourcing service to help large and mid-tier financial institutions reduce Automated Clearing House (ACH) processing costs and gain quicker time to market with new ACH services and Nacha Rule updates is now available from Fiserv (NASDAQ: FISV), the leading global provider of financial services technology solutions.
ACH Outsourcing from Fiserv will enable financial institutions to move from a variable cost structure of in-house processing to a more predictable, volume-based cost model, built with the NACHA Rule updates included. The move to outsourcing could help banks gain immediate operational and IT cost savings, such as the elimination of ACH mainframe expense, software maintenance and upgrade costs.
Fiserv is expanding its ACH outsourcing services, beyond what is already used by many small banks and credit unions through its core processing solutions, by offering a more robust version of the outsourcing service to larger banks. For nearly three decades, PEP+TM from Fiserv has been the preferred in-house solution for originating and receiving electronic payments through the ACH and currently is used in more than two thirds of the top 100 ACH participants Now, due to evolving market needs and customer demand, Fiserv is combining its proven ACH technology expertise with its long-running experience as an ACH outsource provider to offer larger financial institutions the advantage of a single technology partner for best-in-class ACH processing.
"All financial institutions are looking for ways to trim costs these days," said Nancy Atkinson, senior analyst, Aite Group. "They want to eliminate overhead that keeps their fixed costs high, and outsourcing makes good business sense - even for something like ACH processing."
Outsourcing typically affords businesses both cost reductions and the ability to preserve capital. In today's complex payments marketplace, ACH payment volumes continue to rapidly increase. NACHA reports 18 billion ACH transactions in 2007, up from 16 billion in 2006. Regulatory pressures continue to grow with tighter controls anticipated on risk and fraud management. In addition, new International ACH Transactions regulations are expected to go into effect September 18, 2009 as the industry moves toward 'same day' processing.
"This is truly an exciting offering for banks that either want to get off the mainframe or gain significant cost reductions in their ACH-related IT and operational expense," said Pat Korb, senior vice president and general manager of Fiserv Global Payment Solutions. "Banks who choose to outsource their ACH processing with us will see faster time to market with new ACH products and services and NACHA Rule updates, as well as have access to the highest quality technical support."
Fiserv offers three ACH Outsourcing operating models:
- Hosted Services - Fiserv hosts the bank's existing processing platform at a Fiserv Data Center
- ASP - Fiserv hosts and performs various operational functions for the bank on a Fiserv software processing platform
- BPO - Fiserv hosts and runs all aspects of the bank's ACH processing
While basic functionality of the PEP+ system remains the same across all three models, each option can provide unique benefits depending on the bank's processing needs.