NACHA Launches Project ACTION for Internet Transactions

Venture to Develop Payment Product That Solves Authentication,

Security and Consumer Privacy Issues



Apr 23, 2001, 01:00 ET from National Automated Clearing House Association

    WASHINGTON, April 23 /PRNewswire Interactive News Release/ -- NACHA - The
 Electronic Payments Association announced today at its PAYMENTS 2001
 conference that it is launching a project that would enable consumers and
 businesses to make secure payments for Internet transactions.  Called Project
 ACTION -- ACH Credit Transactions Initiated Online -- the program will develop
 a payment method for Internet consumer-to-business, business-to-business, and
 electronic bill payment transactions utilizing Automated Clearing House (ACH)
 credits.
     "An advantage of the ACH Network is the ability to process credit
 payments, in which funds are pushed to sellers or other payment recipients,"
 said Elliott C. McEntee, President and Chief Executive Officer of NACHA.  "For
 example, ACH credits have been in use for more than 25 years for Direct
 Deposit, and in 2000 were used more than 3 billion times to make Direct
 Deposit payments to 100 million people.  Currently, other payment methods
 require account information to be provided to sellers, that then attempt to
 authenticate the buyer and pull funds from buyers' accounts."
 
     How ACTION Works
     The key difference between ACTION and other electronic payment methods is
 that a buyer (a consumer or business) would initiate a payment to a seller via
 its own financial institution, rather than authorizing the seller to debit its
 account.   This feature enhances security of payments while reducing many of
 the risks.
     With ACTION, a buyer visits a seller's web site, decides to make a
 purchase (or pay a bill) and chooses ACTION as the payment method.  The buyer
 selects its financial institution from a drop-down menu, and is linked to its
 financial institution's web site.  The financial institution authenticates the
 buyer, perhaps through an existing Internet banking platform, and asks the
 buyer to authorize the payment.  The financial institution then verifies the
 buyer's account balance and initiates a guaranteed ACH credit payment to the
 seller's financial institution.
     "ACTION brings security and privacy to payments for Internet transactions
 because consumers and businesses will be able to initiate payments directly
 from their financial institutions, rather than providing account information
 to a seller or a third-party," said McEntee.  "Consumers and businesses have
 existing, trusted relationships with their financial institutions, whereas
 they may be uncomfortable providing account information on the Internet to
 sellers or service-providers.  Many financial institutions are already able to
 authenticate their customers online through Internet banking platforms or
 similar methods.  ACTION leverages that existing ability into new
 authentication and payments business opportunities online."
 
     Benefits of the ACTION Payment Model
     ACTION provides financial institutions the ability to serve as a payments
 portal for individual and corporate customers.  ACTION is an opportunity for
 banks to build authentication and guaranteed payment services into their
 payments processing business. Financial institutions can leverage existing
 authentication methods and information technology investment to support
 ACTION.
     Sellers benefit from receiving guaranteed payments from buyers' financial
 institutions, which reduces the risk of returned payments.  The risk of fraud
 is lower because the responsibility for authenticating buyers is shifted from
 sellers to the buyers' financial institutions, where trusted relationships
 with buyers already exist.  ACTION provides sellers the opportunity to offer a
 secure payment option that allows buyers to pay directly from their checking
 accounts.
     Buyers benefit from the ability to keep their financial and payment
 information private from sellers that perhaps were previously unknown to them.
 Buyers can utilize a method to pay directly from checking or savings accounts
 with existing funds.
 
     Next Step
     Project ACTION will be operated as an independent membership program
 within NACHA.  Members will develop the business plans and requirements,
 product design, technology requirements, and a brand identity.  Membership is
 open to all payments industry stakeholders.  The first meeting of the Project
 ACTION membership will take place May 15-16 in Reston, Virginia.  For
 membership information, visit the Project ACTION web site at
 http://www.project-action.org , or contact Julie Hedlund, Senior Director of
 Electronic Commerce, NACHA, at 703-561-3915 or jhedlund@nacha.org.
 
     The ACH Network
     The ACH Network serves 20,000 financial institutions, 3 million
 businesses, and 100 million individuals.  The ACH Network is commonly used for
 Direct Deposit of payroll and government benefits such as Social Security,
 Direct Payment of consumer bills, business-to-business payments, federal tax
 payments, and, increasingly, e-commerce and international payments.  In 2000
 there were almost 6.9 billion ACH payments made worth more than $20.3
 trillion.
 
     About NACHA - The Electronic Payments Association
     NACHA is the leading organization in developing electronic solutions to
 improve the payments system.  NACHA represents more than 12,000 financial
 institutions through direct memberships and a network of regional payments
 associations, and 600 organizations through its six industry councils.  NACHA
 develops operating rules and business practices for the Automated Clearing
 House (ACH) Network and for electronic payments in the areas of Internet
 commerce, electronic bill payment and presentment (EBPP), financial electronic
 data interchange (EDI), international payments, electronic checks, and
 electronic benefits transfer (EBT).  Visit NACHA on the Internet at
 http://www.nacha.org .
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X21432761
 
 

SOURCE National Automated Clearing House Association
    WASHINGTON, April 23 /PRNewswire Interactive News Release/ -- NACHA - The
 Electronic Payments Association announced today at its PAYMENTS 2001
 conference that it is launching a project that would enable consumers and
 businesses to make secure payments for Internet transactions.  Called Project
 ACTION -- ACH Credit Transactions Initiated Online -- the program will develop
 a payment method for Internet consumer-to-business, business-to-business, and
 electronic bill payment transactions utilizing Automated Clearing House (ACH)
 credits.
     "An advantage of the ACH Network is the ability to process credit
 payments, in which funds are pushed to sellers or other payment recipients,"
 said Elliott C. McEntee, President and Chief Executive Officer of NACHA.  "For
 example, ACH credits have been in use for more than 25 years for Direct
 Deposit, and in 2000 were used more than 3 billion times to make Direct
 Deposit payments to 100 million people.  Currently, other payment methods
 require account information to be provided to sellers, that then attempt to
 authenticate the buyer and pull funds from buyers' accounts."
 
     How ACTION Works
     The key difference between ACTION and other electronic payment methods is
 that a buyer (a consumer or business) would initiate a payment to a seller via
 its own financial institution, rather than authorizing the seller to debit its
 account.   This feature enhances security of payments while reducing many of
 the risks.
     With ACTION, a buyer visits a seller's web site, decides to make a
 purchase (or pay a bill) and chooses ACTION as the payment method.  The buyer
 selects its financial institution from a drop-down menu, and is linked to its
 financial institution's web site.  The financial institution authenticates the
 buyer, perhaps through an existing Internet banking platform, and asks the
 buyer to authorize the payment.  The financial institution then verifies the
 buyer's account balance and initiates a guaranteed ACH credit payment to the
 seller's financial institution.
     "ACTION brings security and privacy to payments for Internet transactions
 because consumers and businesses will be able to initiate payments directly
 from their financial institutions, rather than providing account information
 to a seller or a third-party," said McEntee.  "Consumers and businesses have
 existing, trusted relationships with their financial institutions, whereas
 they may be uncomfortable providing account information on the Internet to
 sellers or service-providers.  Many financial institutions are already able to
 authenticate their customers online through Internet banking platforms or
 similar methods.  ACTION leverages that existing ability into new
 authentication and payments business opportunities online."
 
     Benefits of the ACTION Payment Model
     ACTION provides financial institutions the ability to serve as a payments
 portal for individual and corporate customers.  ACTION is an opportunity for
 banks to build authentication and guaranteed payment services into their
 payments processing business. Financial institutions can leverage existing
 authentication methods and information technology investment to support
 ACTION.
     Sellers benefit from receiving guaranteed payments from buyers' financial
 institutions, which reduces the risk of returned payments.  The risk of fraud
 is lower because the responsibility for authenticating buyers is shifted from
 sellers to the buyers' financial institutions, where trusted relationships
 with buyers already exist.  ACTION provides sellers the opportunity to offer a
 secure payment option that allows buyers to pay directly from their checking
 accounts.
     Buyers benefit from the ability to keep their financial and payment
 information private from sellers that perhaps were previously unknown to them.
 Buyers can utilize a method to pay directly from checking or savings accounts
 with existing funds.
 
     Next Step
     Project ACTION will be operated as an independent membership program
 within NACHA.  Members will develop the business plans and requirements,
 product design, technology requirements, and a brand identity.  Membership is
 open to all payments industry stakeholders.  The first meeting of the Project
 ACTION membership will take place May 15-16 in Reston, Virginia.  For
 membership information, visit the Project ACTION web site at
 http://www.project-action.org , or contact Julie Hedlund, Senior Director of
 Electronic Commerce, NACHA, at 703-561-3915 or jhedlund@nacha.org.
 
     The ACH Network
     The ACH Network serves 20,000 financial institutions, 3 million
 businesses, and 100 million individuals.  The ACH Network is commonly used for
 Direct Deposit of payroll and government benefits such as Social Security,
 Direct Payment of consumer bills, business-to-business payments, federal tax
 payments, and, increasingly, e-commerce and international payments.  In 2000
 there were almost 6.9 billion ACH payments made worth more than $20.3
 trillion.
 
     About NACHA - The Electronic Payments Association
     NACHA is the leading organization in developing electronic solutions to
 improve the payments system.  NACHA represents more than 12,000 financial
 institutions through direct memberships and a network of regional payments
 associations, and 600 organizations through its six industry councils.  NACHA
 develops operating rules and business practices for the Automated Clearing
 House (ACH) Network and for electronic payments in the areas of Internet
 commerce, electronic bill payment and presentment (EBPP), financial electronic
 data interchange (EDI), international payments, electronic checks, and
 electronic benefits transfer (EBT).  Visit NACHA on the Internet at
 http://www.nacha.org .
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X21432761
 
 SOURCE  National Automated Clearing House Association