NACHA — The Electronic Payments Association®, developed the program to improve the reliability of online banking bill pay and reduce checks issued in association with bill pay exceptions. The result will improve efficiency both for billers and bill pay originators.

The majority of bill payments made through a bank or credit union are processed electronically and without issue. However, there are instances (typically when customers provide incorrect information) when the process does not flow smoothly. Previously in these cases, the bill pay provider would default to sending a paper check payment, or "drop to check," because electronic routing was reserved for payments with valid account numbers. When billers determined the correct information needed to post a flawed payment, they did not have a means to update the bank or credit union's bill pay provider since the payment had not been delivered electronically.

NACHA's program allows iPay Solutions to electronically send payments with flawed account numbers over the ACH Network to participating billers, eliminating the paper cycle and improving overall efficiencies. iPay Solutions will "tag" these payments, providing billers with additional information (such as the customer's name and address) with which they can correct the account number and proceed with the electronic process.  Once the biller determines the correct information, they can electronically update iPay so that future payments do not require research.

Tede Forman, group president of iPay Solutions, explained, "This program corrects the current process of delayed, misdirected and wrongly posted payments. The benefits encountered from eliminating redundant corrections and a laborious paper trail will improve business for billers and address a point of customer frustration. This is one of the many ways that iPay Solutions is working with industry leaders like NACHA to continue to improve the payments industry."

NACHA estimates that bill pay exceptions cost the industry nearly $800 million per year. Robert Unger, senior director, eBilling and payments, NACHA, commented, "iPay's participation in the BPE Mitigation Opt-In Program is an opportunity for billers and financial institutions to solve a growing business problem. As electronic bill pay adoption continues to increase, we are dedicated to improving the processes. We expect this new set of standards to greatly reduce exceptions to bill pay, saving millions of dollars. As a result, billers and processors will be equipped to manage the increasing volumes with ease and efficiency. At NACHA, we hope other providers and billers will follow iPay's lead to help the consumer."