
The Automated Clearing House (ACH) Network is a well-known money transfer method used by organizations to handle checks, direct deposits, cash transfers, and bill payments between businesses and individuals.
Reward:
Risk:
- The ACH Network processed over $73 trillion in payment value in 2021.
- It’s being regulated by Nacha and is considered to be the most popular payment rails worldwide.
- It unlocks opportunities in terms of accepting and sending payments (debit and credit) from financial institutions and brokerage firms, sending and accepting payroll payments (employee wages), and bill payments.
- Adding ACH payment as part of your offering can bring more “traditional” users to your platform, app, or exchange. And, with the current state and variety of integration platforms, you can expect no heavy lifting from an engineering perspective.
- Generate revenue from fees on outbound transactions.
- ACH is a “batch” processing system and most transactions clear within 3-5 business days.
- In recent years, direct payments (requests to pull funds from an account) became popular among bad actors because they could take advantage of clearing days and abuse internal disputes policies.
- Bad actors are pulling funds from accounts with insufficient balances, blocked/frozen accounts, or simply use their own 3rd party accounts and dispute the transaction several days after original initiation.
- Those acts result in what are called “ACH Returns,” which have associated fees and may result in legal action taken by NACHA if certain return thresholds are exceeded.
- Direct deposits are another potential risk factor to consider. In those cases, bad actors will push the payment to your accounts and the intended payee name on the deposit will usually don't match the name of your account holder.
Reward:
- The ACH Network processed over $73 trillion in payment value in 2021.
- It’s being regulated by Nacha and is considered to be the most popular payment rails worldwide.
- It unlocks opportunities in terms of accepting and sending payments (debit and credit) from financial institutions and brokerage firms, sending and accepting payroll payments (employee wages), and bill payments.
- Adding ACH payment as part of your offering can bring more “traditional” users to your platform, app, or exchange. And, with the current state and variety of integration platforms, you can expect no heavy lifting from an engineering perspective.
- Generate revenue from fees on outbound transactions.
Risk:
- ACH is a “batch” processing system and most transactions clear within 3-5 business days.
- In recent years, direct payments (requests to pull funds from an account) became popular among bad actors because they could take advantage of clearing days and abuse internal disputes policies.
- Bad actors are pulling funds from accounts with insufficient balances, blocked/frozen accounts, or simply use their own 3rd party accounts and dispute the transaction several days after original initiation.
- Those acts result in what are called “ACH Returns,” which have associated fees and may result in legal action taken by NACHA if certain return thresholds are exceeded.
- Direct deposits are another potential risk factor to consider. In those cases, bad actors will push the payment to your accounts and the intended payee name on the deposit will usually don't match the name of your account holder.
Play:
The key to success is to establish a good product fit for your customer base, and understand the true needs of your customers and how they’re expected to use this feature.
For new account funding, it is vital to take the following actions:
- Verify 3rd party account ownership.
- Have a clear idea who is the owner of the account the funds are being pulled from and how they’re related to your account holder.
- Adding ACH payment as part of your offering can bring more “traditional” users to your platform, app, or exchange. And, with the current state and variety of integration platforms, you can expect no heavy lifting from an engineering perspective.
- Develop strong internal policies around who will get access to ACH payments.
It is also pertinent to have documentation around what actions will be taken in case of ACH Returns with a strong monitoring strategy to keep track of ACH pulls and direct deposits.
Using Unit21, you can run this play in under an hour from rule strategy through to deployment. Without Unit21, this could take your team up to a month to deploy.
Industry Standard
With Unit21
Rule Strategy
1-2 Days based on availability of analytics team
15-20 minutes
Rule Creation
Dependent on engineering resources*
5-10 minutes
Submitting Ticket to Engineering
1 Day
Not required
Engineering Resources to Build & Edit Rules in Software
2-3 weeks (Dependent on resources)
Not required
Total Time for Rule Strategy for Deployment
3-4 weeks
30-45 minutes
Industry Standard
Rule Strategy
1-2 Days based on availability of analytics team
Rule Creation
Dependent on engineering resources*
Submitting Ticket to Engineering
1 Day
Engineering Resources to Build & Edit Rules in Software
2-3 weeks (Dependent on resources)
Total Time for Rule Strategy for Deployment
3-4 weeks
With Unit21
Rule Strategy
15-20 minutes
Rule Creation
5-10 minutes
Submitting Ticket to Engineering
Not required
Engineering Resources to Build & Edit Rules in Software
Not required
Total Time for Rule Strategy for Deployment
30-45 minutes
* Based on a survey we found average risk teams get less than 15 hours of engineering time a week