The volume of transfers via the ACH Network is at an all-time high, proving that consumers are increasingly using ACH payments for more regular, predictable transactions. NACHA credits the massive growth to both an increase in bill payments and account-to-account transfers, which grew 24 percent, as well as a rise in business-to-business payments, which rose 13 percent.
This increase among B2B payments underscores the demand for ACH among business customers; therefore, financial institutions should consider offering a service that allows businesses to easily exchange payments with other businesses, as they often initiate regular payments between one another.Making this even more important is the fact that check fraud is at an all-time high. Businesses often fall victim to check scams, as checks are often used for high-dollar B2B transactions like vendor payments and payroll. In fact, in 2017, 74 percent of organizations experienced check fraud, according to the AFP Payments Fraud and Control Survey.Same-day ACH is a viable alternative to B2B check payments to reduce fraud and increase revenue, but the process must be completely digitized. In fact, there is an intense market demand for more automation and robust features for delivering translated EDI information (820 & 835) contained within incoming ACH files, NOC and ACH return information to business account holders. Financial institutions must take note.
Today, many financial institutions send secure emails with PDF documents, forcing business customers to log in, print them and manually post payments. Instead of emailing PDF reports with remittance data in “human-readable format,” financial institutions should provide methods for business clients to be alerted when payments containing EDI information posts to their account. They should also be able to obtain payment information in “computer-usable formats.”
With this method, business customers can view remittance information (including free form addenda) within the transaction history screen and/or export all remittance data to automate posting in their accounting systems. Further streamlining the process, automating the delivery of posting files should be made possible.
Ultimately, financial institutions should provide methods to effectively monitor incoming ACH transactions and alert account holders when incoming ACH transactions contain EDI information or when they have ACH returns or NOC’s. Information should be presented by settlement date to aid in the reconcilement process. Account holders should be able to access the information online, export it in a variety of formats or have data delivered electronically to automate posting.
By providing these capabilities, financial institutions strengthen their online banking systems for business account holders and increase their competitiveness among the majority of institution that currently do not. Failure to do so will leave them in the Dark Ages.
