Automated Clearing House (ACH) volume has been growing exponentially every year for the past ten years. The Electronic Payments Association (NACHA) says ACH payments had already moved past 21 billion transactions in 2012 and was up 7.6% at the end of the second quarter of this year.
As volume increases, securing ACH payments is a priority, and as mobile payments increase, ACH security becomes more and more challenging. Are ACH payments really secure? Yes, they are.
The question going forward though, is how can we maintain that security in the future? The primary concern voiced in regard to the security of ACH processing is manifest in the hesitancy most people feel about sharing their bank information with anyone.
“As far as the risk involved with using ACH, it is really no different than providing your credit card information to someone over the phone or online” says Wayne Hamilton of National Processing.
In response to increased security concerns, technology firms that create ACH related programs are amplifying security by adding more verification layers and checks on transaction integrity that banks can offer their clients.
Other measures include providing fraud detection to outbound ACH credit and wire entries by requiring transaction level validation after transactions are received by the financial institution and prior to release to the payment network.
Fiserv (FISV), for example, just released an expanded version of PEP+, a solution that turns check payments into ACH transactions. The enhanced version of PEP+ will include dual verification, which ensures proper controls to mitigate fraud and error in ACH transactions. The enhanced PEP+ will also enable automated tracking to report on how these controls are performing.
“It’s an automated way to require additional verifications for certain transactions,” says Bert Harkins, who says dual verification helps combat a scenario in which fraudsters with access or who obtain access to account information attempt to create fake payments.
Currently the ACH system has ample safeguards in place to protect the transfer of funds. The greatest threat to security manifests itself as the industry pushes for faster and faster processing speed and higher volumes. As those speeds increase, the technology to secure those transactions will have to evolve and keep pace.