Links Related
to this Story:

• nacha.org

Teach Your Merchants Well

N ACHA is introducing three endeavors designed to educate and create awareness among financial institutions and merchants on managing risk and preventing fraud associated with Internet-initiated payments.

Through two projects that are beginning in January 2002 and are scheduled to wrap up by mid-2002, the Internet Council of NACHA will provide resources and information to assist organizations in identifying the types of risk and fraud that pose threats to their businesses and methods to mitigate them.

The third project will examine the application of Unified Modeling Language tools and techniques to ACH processes and develop documents and diagrams to depict them in educating merchants. This project is set to begin during the first quarter of 2002.

"Managing risk and preventing fraud are both major concerns to organizations doing business on the Internet," said David L. Merritt, Chairman of the Internet Council and Vice President and Product Design Manager in the New Business Development Groups of Mellon Global Cash Management.

Fraud at the transaction level, identity theft, invalid accounts and non-sufficient funds are some of the types of payment issues that "Fraud 101" will identify and catalog. The project's goal is to produce a report that includes information on preventing, detecting and addressing fraudulent activity.

The risk-management project will focus on the risks of specific Internet-initiated payments, such as automated clearing house (ACH), credit card, online and offline debit cards, and person-to-person payments. Credit, operational, fraud, systemic and reputation risks all will be studied. Participants in the risk-management project will create an industry publication and guide on Internet-initiated payments.

The Internet Council of NACHA was established in 1996 to facilitate the development of global electronic commerce by enabling business, governments and consumers to send and receive payments over open, secure and cost-effective networks. The council has more than 100 members, including financial institutions, companies, technology providers and government agencies.

For more information on the Internet Council of NACHA and the payment risk and fraud projects, visit the Web site at http://internetcouncil.nacha.org.