Protect Yourself
from Your
Customer
Kristin A. Stedman, AAP
Senior Vice President
Education Services
kristin@tacha.org
© 2014 TACHA. All Rights Reserved
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Mark of Excellence
• © 2014 TACHA. All rights reserved.
• This material is derived from collaborative work
product developed by NACHA ─ The Electronic
Payments Association and its member Regional
Payments Associations. This material is not
intended to provide any warranties or legal
advice, and is intended for educational purposes
only. NACHA owns the copyright for the NACHA
Operating Rules & Guidelines
© 2014 TACHA. All Rights Reserved
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Telephone
Banking
Internet
Banking
© 2014 TACHA. All Rights Reserved
Bill
Pay
Mobile
P2P
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Telephone
Banking
Internet
Banking
Bill
Pay
© 2014 TACHA. All Rights Reserved
Mobile
P2P
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Telephone
Banking
Internet
Banking
Bill
Pay
Mobile
© 2014 TACHA. All Rights Reserved
P2P
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Telephone
Banking
Internet
Banking
Bill
Pay
Mobile
Banking P2P
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Telephone
Banking
Internet
Banking
Bill Pay
Mobile
Banking
P2P
© 2014 TACHA. All Rights Reserved
Here we are
today!
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The
Person-to-Person
Payment
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ACH Network
ODFI
RDFI
ACH Operator
Debit
Originator’s
Account
Credit
Receiver’s
Account
Originator
Receiver
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Introducing the Person-to-Person Payment
DEFINITIONS
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Person-to-Person Entry
(P2P Entry)
• Credit entry initiated by or on
behalf of a holder of a
consumer account that is
intended for a consumer
account of a receiver
• P2P entry uses the InternetInitiated/Mobile Entry (WEB)
Standard Entry Class Code
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Customer Initiated Entry
(CIE)
Credit entry initiated by or
on behalf of the holder of a
consumer account to the
non-consumer account of a
receiver
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Internet Initiated/Mobile Entry
(WEB)
• Credit entry initiated by or
on behalf of the holder of a
consumer account that is
intended for the consumer
account of a receiver,
regardless of whether the
authorization of such entry
is communicated via the
Internet or wireless network
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P2P AND NACHA OPERATING
RULES
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Person-to-Person Rule Objectives
• Provides clarity and consistency about how to
apply the Rules to P2P Payments
• Allows RDFIs to receive P2P transactions with
standard formatting for use in providing
transaction information to their customers
• Enables Originators and Third Party Service
Providers to implement internal processes and
procedures in order to improve operations and
customer service, reduce costs, reduce risk and
fraud, and minimize exceptions and disputes
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Person-to-Person
Effective March 21, 2014
Approved: March 7, 2013
• Defines P2P payment in NACHA
Operating Rules
• Creates new Credit WEB Entry specifically
for P2P payments
• Clarifies how Notifications of Change
(NOCs) should be handled for P2P WEB
credits and for bill payment CIEs
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Company Name Field
•
•
•
•
•
To identify P2P service provider
In Company Batch Header Record
Field 3 and position 05-20
Alphameric
16 characters in length
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Company Entry Description
• Descriptive statement for P2P type
payment
• Field 7 and position 54-63
• Alphameric
• 10 characters in length
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Individual Identification Number Field
•
•
•
•
•
•
Identifies Sender or Originator
WEB Entry Detail
Field 7 and position 40-54
Alphameric
15 characters
Required on statement & transaction
reports
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Payment Related Information
•
•
•
•
•
Free form plain text option
Addenda Record
Field 3 and position 04-83
80 characters
Not required for statement but consider
value
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P2P Formatting
• Individual Name = Receiver’s name
– Who is receiving the P2P entry?
• Individual ID = Originator/Sender’s name
– Who sent the P2P entry?
• Company Name = P2P service provider
– Whose assisted in sending the P2P entry?
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Payment Type Code
• “S” or “R”
– Single or recurring
• Entry Detail
• Field 9 and position 77-78
• Denoted like the WEB debit
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WEB Can Batch Together
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Periodic
Statements
 For P2P Company Name is Service Provider, not
Originator
 RDFI must provide the Receiver with Originator’s
(sender’s) name
 Originator for WEB Credits is in Individual ID Number
 RDFI Must provide contents of Individual ID Number
field to consumer only for WEB Credits
 Not if WEB Entry is a reversal of a debit WEB Entry
 “REVERSAL” would appear in Company Entry Description in
Company Batch Header Record
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P2P WEB Credit ≠ WEB Debits
• Credit WEB - No Origination Agreement
• Credit WEB - No Receiver Authorization
• Credit WEB - Additional ODFI Warranties do
not apply
– Debit WEB Entries are subject to risk
management rule provisions that apply as a
prerequisite to Origination
– WEB Audit requirement does not apply to WEB
Credits
– P2P Debits consumer to consumer
• Consumers’ originating debits to Consumers require
Originator Agreement and all applicable Rules
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Impact to ODFIs
• Statement requirements
–
–
–
–
–
–
–
This is same information
RDFI provides to its
consumer Receivers of
ACH entries
Posting date
Dollar amount
Payee name
Entry description
Account type and Account number
Amount of charges for services related to entry
Balances in account at beginning and end of statement
period
– Address and telephone number for inquiries or notice of
errors
• Education with staff and customers
• Conversation with vendors
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P2P– Notifications of Change
• Clarifies the treatment of NOCs for CIEs and
credit WEB Entries
• When CIE or WEB credit NOC is received by
the ODFI, the ODFI required to make the
changes, or provide the bill payment or P2P
provider with the necessary information
– Within two Banking Days of the Settlement Date
of the NOC or corrected NOC
– Regular NOC time frames apply
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WHAT IS YOUR FINANCIAL
INSTITUTION DOING TODAY?
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Bill Payment
vs.
P2P Portal
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Who’s the ODFI of the P2P
entries?
TPSP
Your financial
institution
ODFI
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I need to send money
to my daughter’s
account at another
financial institution
every month.
Would you please send
this to my account at my
other financial institution?
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THINGS FOR FINANCIAL
INSTITUTIONS TO CONSIDER
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Take Into Consideration…..
• Can consumer customers send debit
and/or credit entries through online
banking?
– If so, can this also be done through mobile
banking?
• Who does the financial institution use as a
Third-Party Service Provider for the P2P
product?
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Take Into Consideration…..
• Does the financial institution have any
restrictions in place for P2P payments?
• Are there eligibility requirements?
– Customer ratings
– Length of relationship
– Overdrafts
– Returns
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Take Into Consideration…..
• Are there limits in place related to P2P
payments?
– Are limits the same for all consumers?
• What authentication is in place for
consumers initiating P2P payments
through online banking?
– What are password requirements?
– What locked out procedures are in place?
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Take Into Consideration…..
• How are online account changes
monitored and verified?
– Address changed
– Phone number changed
– Email address changed
– Alert notifications changed
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Take Into Consideration.....
• Employee access
– Does the financial institution minimize and
monitor the number of personnel with access to
systems that support ACH services?
– Does the financial institution minimize and
segregate ACH staff and limit access to various
maintenance and transaction support functions
•
•
•
•
Editing users
Editing account numbers
Editing transaction limit
Editing user profiles
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In Conclusion…..
• Financial institutions are welcoming new
products and services
• NACHA Operating Rules provides
framework for P2P payments
• Financial institution has to manage the risk
related to the new products and services
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Contact Information
1000 NorthChase Drive
Suite 201
Goodlettsville, TN 37072
Office: (615) 859-4188
Cell: (615) 636-8695
Fax: (615) 859-3719
Website: www.tacha.org
© 2014 TACHA. All Rights Reserved
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