DALLAS — August 24, 2020 — GIACT®, the leader in helping companies positively identify and authenticate customers, today announced a new report, Securing Faster Payments: Addressing the Account Validation Rule, on the rapid growth of ACH payments, the latest fraud trends surrounding faster payments as well as how to secure ACH transactions. The report comes in advance of Nacha’s upcoming WEB Debit Account Validation Rule, slated to take effect on March 19, 2021, and serves as a guide on how to apply proper account validation measures.
Click here to download the white paper, click here.
“The latest rule change from Nacha is a welcome step when it comes to strengthening fraud protections,” said Kimber Johnson, EVP, Strategic & Client Relations at GIACT. “By adding account validation as a required component of a commercially reasonable fraudulent transaction detection system, businesses will have a better understanding of who they are disbursing money to before a payment is issued. The move will also help deter some of the more commonly used cybercrime tactics – including different types of identity fraud schemes, business email compromise and other social engineering tactics. But it’s not foolproof. Businesses will also need to examine how to apply more robust account validation measures that extend beyond simply confirming if an account is active.”
The latest rule change from Nacha is a welcome step when it comes to strengthening fraud protections. By adding account validation as a required component of a commercially reasonable fraudulent transaction detection system, businesses will have a better understanding of who they are disbursing money to before a payment is issued.
Kimber Johnson
Executive Vice President, Strategic & Client Relations, GIACT
The Paradox of Faster Payments
“The latest rule change from Nacha is a welcome step when it comes to strengthening fraud protections,” said Kimber Johnson, EVP, Strategic & Client Relations at GIACT. “By adding account validation as a required component of a commercially reasonable fraudulent transaction detection system, businesses will have a better understanding of who they are disbursing money to before a payment is issued. The move will also help deter some of the more commonly used cybercrime tactics – including different types of identity fraud schemes, business email compromise and other social engineering tactics – but it’s not foolproof. Businesses will also need to examine how to apply more robust account validation measures that extend beyond simply confirming if an account is active.”
According to the report, ACH payments have become increasing popular, particularly as more and more transactions and accounts move online. In the first half of 2020, for example, Nacha reported its network volume reached 13 billion payments – an increase of nearly one billion payments compared to the same perior year over year. Speed has also been key to the network’s growth as highlighted by a 37% jump in Same Day ACH volume in the second quarter of 2020 compared to the same period the year prior.
“The paradox of faster payments is that it can also lead to faster instances of fraud,” said Erika Baumann, Senior Analyst, Wholesale Banking & Payments at Aite Group. “The past six months have been an extremely busy time for fraud operators. They’ve used the pandemic to socially engineer or apply malware that can leverage business and consumer accounts in order to misdirect funds. It’s now more important than ever, especially as the protocols for securing transactions move from the office to the home, that businesses apply advanced account validation measures that will give them a full, precise picture of the receiving account.”
GIACT’s report shows how businesses can both address the rule change and move beyond traditional methods of account verification, to understand account status, payment history, ownership as well as the consistency of the personally identifiable information (PII) associated with the account. GIACT’s identity and account verification solutions – including gAUTHENTICATE® and gVERIFY® — provide these tools through an easy-to-use, easy-to-integrate platform.
To access the full white paper, click here.
— via PR Newswire
About GIACT
GIACT® has been helping companies verify valued customers since 2004. From financial to insurance, to retail, to solutions for your industry, GIACT offers customer intelligence for complete payment confidence. As the leader in providing real-time data to help companies mitigate payment risk and fraud, our OFAC screening, ID verification, account verification and authentication, and mobile verification solutions enable you to focus on providing unmatched customer experiences. Since our founding, we’ve processed billions of transactions for our more than 1,000 customers. For more information, visit www.giact.com or call 1-866-918-2409. Follow us on LinkedIn and Twitter.
