NACHA - The Electronic Payments Association reported at Payments 2009 that the number of automated clearing house payments in 2008 topped 18.2 billion, representing an increase of 1.2 billion over 2007.
The portion of ACH volume passing through the ACH operators grew in 2008 to nearly 15 billion transactions, which is 7.1 percent higher than the previous year.
The gross dollar volume of these payments was $29.96 trillion, an increase of 4 percent over 2007. "Consumers, businesses and government are continuing to embrace the safe, smart and green attributes of ACH payments and choosing electronic over paper," said Janet O. Estep, NACHA President and Chief Executive Officer. "Despite the overall economy slowing in 2008, the ACH network continues to see positive growth."
In its 2009 Global Consumers and Convergence survey, tax and advisory firm KPMG LLP revealed that 85 percent of U.S. respondents believe that, while they admit mobile banking is important, they don't want to pay for it.
Additionally, they are wary of using their cell phones, smart phones and personal digital assistants for financial transactions and online banking.
Ninety-one percent of those surveyed said they had never tried banking through a mobile device. Of those, almost half cited security and privacy concerns as the primary reason.
KPMG also reported that 68 percent of U.S. respondents said their current financial institution doesn't offer mobile banking.
"U.S. and worldwide consumers need to be convinced that new payment methods and banking vehicles are safe and secure in order for them to succeed," said Mitch Siegel, Director of Payment Advisory Services in KPMG's Financial Services practice.
"Once these concerns are addressed, consumer confidence can grow, and adoption could potentially increase."
According to the most recent results of the Royal Bank of Canada (RBC) Consumer Attitudes and Spending by Household (CASH) Index, overall consumer confidence in the economy advanced 30.1 points in April 2009, bringing the RBC Index to 38.3, compared to only 8.2 in March 2009.
The index is a monthly survey of consumer perceptions on the current and future state of local economics, personal finance, savings and confidence when making purchases. Consumer sentiment was bolstered by a 58.3 point increase in Americans' expectations for the future.
"The April readings provide more evidence of a stabilization in consumer spending," said Larry Miller, Managing Director, RBC Capital Markets."
Stabilization does not mean recovery, but is a far better prospect than the free-fall of late last year. Whether this translates into an improvement in consumer spending is another ball game, and one that is far too early to call."
AllTrust Networks, formerly BioPay Paycheck Secure, a biometric payment services firm, said that Ontario, Calif.-based Pro's Ranch Markets implemented AllTrust's fingerprint check cashing service, Paycheck Secure, at all 11 of its stores across four states: Arizona, California, New Mexico and Texas.
Payment platform developer Billeo Inc. introduced its Billeo plug-in browser for use with the Apple Mac computer, which enables users to set up a one-stop transaction center with stored account information and transaction charts and reports, card data, bill pay and shopping directories, password management, bill reminders, and a record of saved receipts.
Remote deposit capture solutions provider Bluepoint Solutions Inc. introduced RDC Consumer, which enables bank and credit union account holders to deposit checks from their homes or offices anytime with only a computer, a secure Internet connection and a scanner.
RDC Consumer integrates with Bluepoint's transport service to compile image files which allows for immediate clearing of merchant and ATM RDC products, resulting in faster funds availability. It also maintains a central depository, making image files immediately available for research and retrieval enterprisewide.
ControlScan Inc., a Payment Card Industry (PCI) Data Security Standard (DSS) compliance solutions company, launched PCI 1-2-3 Security Awareness Training, the latest enhancement to its PCI compliance solution.
The PCI 1-2-3 SAT delivers on-demand security training to small merchants and their employees in a nontechnical, easy-to-digest manner that satisfies requirement 12.6 of the PCI DSS, according to ControlScan.
In other company news, payment processor Electronic Commerce International joined forces with Control Scan Inc. to assist ECI's small and mid-sized businesses in meeting PCI DSS requirements. ECI will offer Control Scan's PCI 1-2-3, which helps merchants understand, choose and complete the Self-Assessment Questionnaire and on-demand security scanning.
Payment processor Elavon Inc. signed an agreement with Tappan Street Restaurant Group to provide debit and credit card processing for all 24 of the company's Taco Mac restaurants in Chattanooga, Tenn., and Atlanta.
At NACHA's Payments 2009 in April, payment solutions provider Epson Corp. introduced a suite of three scanning devices designed for small-business payment processing.
The three products include the CaptureOne single-feed check scanner, the Perfection V30 flatbed check and document scanner, and the WorkForce 500 all-in-one scanner with print, copy, fax and photo capabilities. Epson is the first company to combine customized RDC software with multifunction scanning and document processing devices.
Payment solutions company Fiserv Inc. introduced an outsourcing service to help large and mid-tier financial institutions reduce ACH processing costs and gain quicker time to market with new ACH services and NACHA rule updates. Outsourcing is designed to reduce operational and information technology costs by eliminating ACH mainframe expenses, software maintenance and upgrade costs.
Lancaster, Pa.-based Fulton Financial Corp. selected Metavante Corp.'s Direct Branch and VisionIP check imaging and processing solution. Direct Branch reportedly reduces the time required to prepare settlements.
VisionIP uses an integrated platform to process transactions from multiple sources, including distributed, remote capture and proof-of-deposit.
Payment software company Fundtech Ltd. reported it now offers a range of new features in its PAYplus USA products that enhance risk management and compliance, as well as extend process automation and customer-facing services.
PAYplus USA improves financial institutions' capability to research and investigate payments; it also provides automated extraction and conversion of ACH payment files into wire transfers, automated alerts for managing a customer's account for insufficient funds, and a rules-based, real-time transaction threshold data monitoring and reporting feature, Fundtech noted.
Hypercom Corp. reported that payment processor Elavon Class A certified Hypercom's PCI PIN-entry device (PED)-approved Optimum T4205 card payment terminal. The terminal is available to Elavon's direct and third-party sales channels in North America.
Addtionally, First Data Corp. Class B+ certified the Optimum T4205 payment terminal with Hypercom's SPOS32 software. This certification opens a sales channel for Hypercom's entry-level dial device through First Data's 5.5 million merchant locations.
In other company news, Hypercom introduced its HyperSafe Secure solution at the Electronic Transaction Association's Annual Meeting & Expo in Las Vegas.
The solution encrypts cardholder data during processing that eliminates exposure of sensitive information and was designed to combat escalating criminal efforts to steal unencrypted data.
Online bill pay provider iPay Technologies LLC released Biz 2.0, a bill payment and electronic invoicing solution for small to mid-sized businesses that connects bill payment, payroll deposits and invoicing into a single solution. iPay said that more than 390 banks and credit unions are already offering the solution to small businesses nationwide.
As a sponsor of the National Breast Cancer Foundation, Meta Payment Systems released a new gift card product. The gift card features the NBCF logo and the pink ribbon image associated with the foundation's cause. The card is available to the more than 900 banks that participate in Meta's gift card program.
Dallas-based Money One Federal Credit Union converted the processing of its $8 million card program to TNB Card Services. Money One now has the ability to implement TNB's Rewards2U loyalty program, portfolio management tools and real-time reporting capabilities.
A PayItGreen Alliance study reported that direct deposit can save up to one pound of paper per person annually. And if every employee who had access to direct deposit used it, Americans could save an additional 11 million pounds of paper, 4 million gallons of gas and avoid releasing 32 million pounds of greenhouse gases into the atmosphere every year.
Payment solutions provider Tier Technologies Inc. said that its subsidiary Official Payments Corp. was awarded a multiyear contract by the Internal Revenue Service to provide payment solutions for personal and business taxes. The contract runs through Dec. 31, 2013.
Security compliance management firm Trustwave unveiled its Network Access Control solution at the RSA Conference in San Francisco in April 2009.
NAC technology helps prevent unknown or unauthorized devices from entering a network, one of the leading causes of the introduction of viruses or other malware onto corporate networks.
United Airlines Inc. became cash-free on flights within North America - with the exception of United Express flights - as of April 20, 2009.
EasyPurchase allows customers to use all five major credit cards, as well as Visa Inc. and MasterCard Worldwide debit cards, for all onboard purchases.
Processor United Bank Card Inc. expanded its free credit card terminal program started in 2004. The initiative gives UBC the most diversified selection of free terminal options available from any processor, according to UBC. Free terminals include the VeriFone Vx510 Dual Com; Hypercom's T4210 dial, T7Plus or T4220 Internet Protocol/dial; and Nurit's 2085, 8320, 8500X and 8020 wireless.
Axway Inc., a multi-enterprise and infrastructure solutions provider, teamed up with Edifecs Inc., a security compliance, quality and analytics firm, to offer integrated migration solutions for the Health Insurance Portability and Accountability Act (HIPAA) modifications recently disclosed by the Centers for Medicare and Medicaid Services.
The modifications are designed to facilitate the U.S. transition to an electronic health care environment and include new guidelines for claims, eligibility inquiries, remittance advice and referral authorization.
Doin' it right
Travel and technology innovations, telecommunications and the Internet continue to make the world seem like a smaller place. Consequently, the payments industry in the United States continues to expand its footprint across international borders as demand for electronic transactions and cross-border currency exchange grows.
Riding this wave of global expansion, The Federal Reserve Banks signed a memorandum of understanding with pan-European payment processor Equens SE in April 2009 to process automated clearing house payments from the United States to Europe and vice versa.
Part of the Federal Reserve System, the Banks comprises the largest ACH operator in the United States with 8,800 financial institutions in a proprietary network.
Across cultures, across borders
Starting in early 2010, both institutions will begin processing cross-border payments in multiple currencies. This partnership will enable Equens to process and settle ACH transactions in 22 Single Euro Payment Area countries.
"When talking with clients, we saw a clear demand for expanded payment services to and from Europe," said Elizabeth McQuerry, the Federal Reserve's Assistant Vice President, Retail Payments Office.
"And this partnership with Equens allows us to offer our clients a secure and inexpensive ACH solution. It's such an important expansion for all countries involved, as well as the payment types used, since we'll be doing a variety of foreign exchange types. We'll be processing U.S. dollars to local currencies, which could be the Danish krone, the pound, or any other European currency they transact with that is not the euro."
The Federal Reserve launched its FedGlobal ACH service at NACHA - The Electronic Payments Association's Payments 2009 conference in Orlando, Fla. The offering was developed for the upcoming implementation of NACHA's International ACH Transaction (IAT) rule, which allows U.S. ACH networks to connect with other global payment systems and process inbound and outbound transactions.
"One of the core problems, I think, in cross-border payments has been the lack of a standardized format across countries," McQuerry said. "So if you want to put bulk payment, which is ACH, into other countries, you have to be able to do it in their format. And what our partnership with Equens has done is to create a virtual global format that has been agreed upon by the participants.
"This is based on the ISO 20022 format, which is the evolving international standard for payment processing, and we'll be using that as our basis of file exchange with Equens. Then we'll use that same payments converter to expand to other countries, so the cost of having to create a new converter in every separate country is eliminated - as long as you agree to use that format of course."
Equens Chairman Michael Steinbach said this partnership is an important step for Equens and fits well with the company's vision for a global payments area.
"We are constantly looking for economies of scale, thereby creating opportunities for our clients - the banks - to further reduce their processing costs," he said. "And by offering a standardized channel for cross-border payment processing, our clients won't have to worry about maintaining different cross-border systems."
The Federal Reserve Bank employs a direct sales force. However, ISOs and merchant level salespeople can offer the FedGlobal ACH service through their reseller channels by joining the Fed Reserve Bank network.
"It's been very exciting to expand our efforts and develop a new business process that could really revolutionize cross-border payments over time," McQuerry said. "And certainly we welcome any payment professionals looking to resell our service. More people selling our ACH service means more revenue streams, and the more volume we have, the lower we can make our price over time."
San Diego-based online processing solutions firm Miva Merchant partnered with Chase Paymentech LLC to implement Chase's Orbital processing gateway, allowing Miva to process multiple payment types in 140 different currencies for its largest merchants.
Payment solutions firm Transaction Network Services Inc. signed an agreement with mobile POS solution provider WAY Systems Inc. to offer PIN debit capabilities to mobile merchants via Synapse, TNS' wireless payment gateway. The Synapse solution offers a one-stop shop for ISOs, acquirers and processors to manage transactions for merchants using wireless terminals.
Venture capital firm Austin Ventures and Century Payments Inc., a payment services company funded by AV, acquired ISO National Merchant Solutions. "The acquisition of NMS allows us to strengthen our regional footprint in the Southeast and further our goal of building a premier, nationwide payments business," said AV CEO Robert Wechsler.
Stored-value solutions company ProfitPoint Inc. acquired the merchant processing portfolio of Louisville, Ky.-based ISO ePayment Consultants.
"This acquisition reinforces our commitment to expanding our business, especially at a time when many players in the payments space are in a 'wait and see' mode," said Vaden Landers, CEO of ProfitPoint.
Global fleet card company FleetCor acquired Wichita, Kan.-based lodging management program provider Corporate Lodging Consultants Inc. from Nautic Partners. FleetCor and CLC both operate closed-loop proprietary acceptance networks (gas stations and hotels respectively).
CLC also provides lodging and payment processing services to federal agencies and to its proprietary network of 12,000 U.S. hotels.
Payment software and solutions company ACI Worldwide Inc. made a number of appointments across its enterprise to strengthen its infrastructure and prepare for potential payments industry growth opportunities. The appointments include:
Louis Blatt, Chief Product Officer; David Nussenbaum, Vice President Global Risk Solutions; Mike Pottinger, Vice President of Services in the Europe, Middle East and Africa (EMEA) region; Bernard Delahaye, Vice President for Strategy and Planning in the EMEA region; James Campbell Grant, Vice President of Asia Pacific Services; and John Northwood, Vice President of Operations for Asia Pacific.
Aaron Blockley joined payment processor Yapstone Inc. as Senior Account Executive. Mr. Blockley previously served as the Senior Account Executive at PayPal Inc. and brings seven years of experience working with merchant banks, Web developers and custom software providers.
Payment gateway solutions company USA ePay, a GorCorp company, added Martin Drake as its new Vice President of Business Development. Drake will be responsible for current reseller relationships, partnership agreements, and new products and technology for the USA ePay reseller force.
MasterCard appointed information technology (IT) veteran Antonio "Tony" Ferri as Group Executive of its newly created Enterprise Architecture division. Ferri's responsibilities include ensuring the company's technology and operations capabilities are aligned with its business strategies and overseeing the implementation of processes to improve IT and business operations.
Additionally, Vicky S. Bindra will join the company in June 2009 as its new President, Asia Pacific, Middle East, Africa region. Bindra will replace 20-year MasterCard veteran Andre Sekulic, who is retiring.
Ray Stawiarski joined accounts receivables management company Option Solutions LLC as the company's new District Sales Manager, Western Division.
Stawiarski will help expand the team of sales representatives at Optio's Rohnert Park, Calif., headquarters and work directly with clients in the area.
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