September 28, 2009
Coordinating roles in mobile payments--who will we trust?
The concept of mobile payments is beginning to gain some traction as the industry grapples with environmental complexities—namely the myriad participants in the mobile payments arena, the mulitiple channels for a mobile payment to follow, and the ever-present questions about security. Who can be trusted to intercede among the various entities with an interest in the payments process? While a number of roles in the mobile payments arena are taking shape, the least known and possibly the most confusing is the concept of the trusted service manager (TSM). However, this role is also possibly the most critical to establishing a secure and trusted environment for mobile payments. So what exactly is a TSM and what are its responsibilities?
Complex environment for mobile payments
While anecdotes sometimes dismiss the anticipated speed to market of mobile payments as industry hype, the fact is that the ubiquity of the mobile phone is driving the convergence of telecom and payments. This convergence creates a far more complex environment for payments than ever before. Telecom participants and financial institutions have different regulatory and legal frameworks and distinctly different risk exposure, for example. Furthermore, the U.S. mobile payments environment will leverage existing payment channels, such as the automated clearinghouse (ACH) and the card networks. No one knows if the industry and market will ultimately prefer a particular channel. The result is an array of business models with a vast number of unrelated players with competing interests for customer revenue.
Stakeholders in the mobile payments business model
In addition to the traditional payments model that includes the customer, financial institutions, and perhaps payment processors, the developing mobile payments ecosystem also includes large groups of mobile network operators and handset makers who have no previous payments life cycle experience. For payment system interoperability, all participants must agree to operate under uniform technical operating and security standards. In this context, the role of a TSM is to manage collaboration among the various stakeholders.
Role of the TSM
The concept of the TSM was introduced by the Global System for Mobile Communications Association (GSM) in 2007 in an effort to improve interoperability among various and unrelated proprietary mobile networks. The core function of the TSM is to serve as a neutral and independent middleman between financial institutions, payment network operators, customers, and the mobile network operators.
Responsibilites envisioned for the TSM include managing contractual relationships with the large number of mobile network operators (MNOs) as well as acting as a single point of contact for banks and other payment service providers to communicate with customers they share with the MNOs and handset makers. The key to the TSM’s success clearly is the financial wherewithal to inspire trust on behalf of the other payment participants and to support agreements with a large number of partners. Finally, the TSM should also provide the oversight for various systems among participants to ensure secure transmission of payments and personal data in the transaction.
Who should fill the role?
While the need for a TSM is recognized, there is no consensus on who should fill that role. MNOs, payment network operators, and financial institutions lack the economic incentives to form alliances with other participants in the payment ecosystem because of their competing interests for customer revenue. Whether the role is filled by a consortium of existing players or by a new entity yet to be formed will depend on an ability to fulfill these critical responsibilities from a position of neutrality and independence.
By Cindy Merritt, assistant director of the Retail Payments Risk Forum at the Atlanta Fed
September 28, 2009 in ACH, card networks, mobile network operator (MNO), payments, trusted service manager | Permalink
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September 21, 2009
Not all payments are equal under "good funds" laws
Anyone who has participated in a real estate closing can attest that it can be a daunting experience. There are many parties with their hands out at the closing table to consummate the deal—the buyer, seller, and attorneys, to name a few. However, it can all collapse like a house of cards if the funds underlying the transaction are not collected or "good."
Ripple effects can be devestating when a lender fails to properly fund an escrow closing transaction. A notable case is the collapse of mortgage lender Abbey Financial in 1994, which resulted in hundreds of consumers over six states stranded with either unfunded mortgages or double mortgages because their first mortgage was not paid off in a loan refinancing. Many of Abbey's checks were dishonored, which left several attorneys with shortfalls in their trust accounts.
The aftermath of Abbey sent shock waves through the mortgage industry and prompted many states to enact "Good Funds" laws to ensure that the money funding a real estate purchase and refinance transaction is secure and ready for disbursement. The purpose of the law is to provide assurance to the consumer and other parties that the funds are in the proper hands before the deed or mortgage is recorded. This thereby protects the seller from conveying property to a buyer whose check is drawn on an account with insufficient funds.
What makes a payment "good"?
Typically, a closing agent will deposit all funds connected to a real estate transaction into an escrow account for disbursement at the closing. Most good funds laws stipulate the type of funds (e.g., cashier's checks, or wire transfers) that an escrow agent can accept. However, what is considered "good funds" can vary by state. In Georgia, for example, the law expressly permits certain types of checks:
A settlement agent may disburse proceeds from its escrow account after receipt of any of the following negotiable instruments even though the same are not collected funds: (1) a cashier’s check from a federally insured bank, savings bank, savings and loan association, or credit union…; (2) a check drawn on the escrow account of an attorney or real estate broker…; (3) a check issued by the United States or Georgia…; and (4) a check or checks not exceeding $5,000 in aggregate per loan closing.
Several states have taken a stricter approach in defining acceptable funds. Specifically, wire transfers are often the only funding mechanism allowed and, in some cases, are required for transactions over a certain dollar amount. Although not an exhaustive list, a general Internet search revealed that Indiana, Minnesota, Missouri, and Texas are among those states with good funds laws that limit electronic funds transfers to "wire transfers" instead of the broader "electronic payment," as defined in Regulation CC (12 CFR 220.10 (p)), which would otherwise permit funding using automated clearinghouse (ACH).
For example, the Indiana Good Funds Law defines wired funds as "good" but requires that they be "unconditionally held by and irrevocably credited to the escrow account of the closing agent." Only funds transferred through Fedwire or CHIPS are immediate, final, and irrevocable. Consequently, it appears that Indiana’s law excludes electronic fund transfers through ACH since consumer Regulation E rights with regard to unauthorized ACH credits may create some risk that ACH funding of a real estate transaction could be reversed long after the closing.
Secure funds important in uncertain times
The current housing crisis has undoubtedly caused some anxiety for all parties in a real estate transaction about the risk of a deal falling through. Numerous bank failures and increased real estate fraud have further complicated the process. Although there are differences by state, the good funds laws help to mitigate some of the risks by helping to ensure that the funding of real estate transactions is reliable.
By Jennifer Grier, senior payments risk analyst at the Atlanta Fed
September 21, 2009 in ACH, checks, fraud, risk | Permalink
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August 17, 2009
Oliver: Funding of risk initiatives faces risky times
This week, we have a special guest blogger: Richard Oliver, an executive vice president with the Federal Reserve Bank of Atlanta. Oliver was a pioneer in electronic payments, working on a Fed system project with the U.S. Treasury to develop direct deposit. He was also instrumental in the Atlanta Fed becoming the second automated clearinghouse (ACH) operation in the United States. Since 1998 he has served as retail payments product manager for the Federal Reserve System. In this capacity, he has responsibility for managing the Fed's check and ACH businesses nationwide.
As we look forward to a slow but steady emergence of the banking industry from the current financial firestorm, the question arises as to how investments in the payment system will fare. More specifically, will banks and other payment system players secure funding for initiatives critical to mitigating payment fraud and risk?
Experiences gained from previous economic crises have reshaped individual and corporate attitudes and practices. Certainly, the folks who experienced the Great Depression turned into a generation of savers, conservative spenders, and cautious borrowers. Recent discussions with payment leaders have given rise to the possibility that conservative spending habits may be with us for some time. These habits may be manifested in restricted, prioritized spending on payment initiatives in general and fraud and risk mitigation efforts more specifically.
Given the already narrowing margins in retail payment profits, coupled with enterprisewide scrutiny of expenses across business silos, it is likely that payment organizations will have to prioritize spending in ways not typical of the last decade of innovation and constant change. These limitations will create choices concerning which investments are mandatory and which are discretionary. Investments in initiatives directed at data security and fraud detection might take a back seat to investments in relieving the pent-up demand for maintenance and enhancements of core payment and settlement systems or investments in exciting new technology.
In an ideal world, focused and well-reasoned business case analysis would dictate the priority of spending. My personal experience, however, has revealed that investments in fraud reduction, data security, etc., face an uphill battle when competing for scarce dollars. This phenomenon stems from three major factors.
First, there is always a perception that risk/fraud expenditures are discretionary. It remains to be seen if the staggering cost of poor risk management that led to the financial crisis, coupled with the everyday visibility of fraud schemes, will help shed the discretionary label. Discretion, by the way, not only involves expenditures on new artificial intelligence software or high-tech encryption devices; it also involves more subtle decisions about the number of staff authorized to monitor systems, notify customers of breaches, and research problems. After all, the risks involved in past lending and investment practice that were at the heart of the financial crisis largely involved "payment" of obligations and not "payments."
Second, to do effective business case analysis, good data must be present. It is not at all clear whether banks and other payment providers have transparent and reliable systems in place to detect, measure, and categorize fraud in a way that allows its financial impacts to be estimated. Certainly, banks have historically been reluctant to share such data externally. Further, do banks have in place systems that can collect and allocate fraud management costs in such a way as to complete a meaningful cost-benefit analysis? Without good data, business case analysis becomes an art, not a science. Clearly, for bad actors fraud is their core business; there is no business case to explore and no budget committee to satisfy. In fact, their pursuits are recession proof.
Finally, investments are about the future, not the past. My personal experience in this area is that the past is a poor predictor of the future. In that light, how does an organization forecast likely trends in fraud losses? Is the past a good predictor of the future? Can recent trends such as the reduction of unauthorized activity in the ACH network reasonably be extrapolated, or will the fraudsters simply move to another payment channel where controls are weaker? More importantly, will new technology help bad actors commit fraud more easily or help banks do a better job of detecting and preventing fraud? Should the business case for the future depend on average industry trend data or should it protect against "the big one," the major incident that culminates in a $100 million–$200 million loss? Answers to these questions will ultimately separate the prepared from the unprepared.
Regardless of the answers to these perpetually difficult questions, most of which will stem from core experiences and individual philosophies, one thing is certain in the wake of our recent experience: Reputation is more important than ever. Positive reputations are difficult to build, hard to maintain, easy to lose, and even harder to reclaim. The value placed on reputation must be carefully considered by senior decision makers in setting the course for the future.
August 17, 2009 in ACH | Permalink
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August 03, 2009
Accounting for ACH losses: What are the right numbers to crunch?
From talking with a number of industry players, it has become increasingly clear that there is both a healthy desire for ACH origination loss data to help understand risks and also business practices that limit the extent to which data to benchmark ACH losses are available in the first place. The challenge is to reconcile these two conflicting objectives.
Many banks today treat ACH origination as credit underwriting, particularly for business customers. Given this, one way banks may account for losses as a result of ACH origination is as credit losses against loan loss reserves or other similar accounts. This method is entirely appropriate as a risk management practice given the potential for losses the ACH originating bank may incur as a result of unauthorized debit items that are returned by the receiver through its bank. The originating bank, having already credited its customer’s account, may find itself unable to collect the returned item and thus may incur a loss.
NACHA does publish aggregate trend data on what is probably the best metric it has available—unauthorized returns as a percentage of all ACH debits in the network. While this is a good starting point, it is not a fully accurate picture of the actual losses banks may incur as a result of ACH origination (whether for debits or credits). While the trend of unauthorized debit returns is instructive, it does not explain the dollar losses to banks.
Further, while it is likely that most banks track or have the ability to track their losses from ACH origination, there is no standard regulatory or other financial reporting for banks to report ACH loss information. Such losses may be attributable to fraud or not, but the extent of these losses in terms of aggregate dollars and velocity is likely to be a more robust data point for analysis of ACH fraud and ACH origination risks than the data available today. Improved data on banks’ ACH loss experience would go a long way to explain the true extent of ACH origination risk within the network overall and may promote banks’ ability to benchmark their own losses in an effective way. It also would enable both the network and individual banks to better tailor their risk management efforts. Most importantly, having more data could help dispel any mistaken assumptions about how much financial loss banks are experiencing from operational and fraud risks in ACH origination activities.
By Clifford S. Stanford, assistant vice president and director of the Retail Payments Risk Forum at the Atlanta Fed.
August 3, 2009 in ACH, banks and banking, fraud, risk | Permalink
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July 24, 2009
Transparency: Seeing through International ACH
There are andecdotal reports that some financial institutions are treating their preparatory efforts for the new international ACH transaction (IAT) rule and format like a Y2K event. However, they shouldn’t lose sight of the fact that the industry stands to reap substantial benefits from the new rule, largely because of improved transparency in the ACH network. As you may be aware, the new IAT rule and format go into effect on Sept. 18, 2009. NACHA, the rulemaking body for the ACH network, has conducted extensive industry outreach to provide education on the new rule and format.
In many respects, the change in the international ACH transaction format is attributable to the Office of Foreign Assets Control (OFAC). OFAC administers and enforces economic and trade sanctions in accordance with U.S. foreign policy and national security goals against targeted foreign entities such as international drug traffickers, terrorists, and other threats. Beginning in the late 1990s, OFAC began to have concerns about abuses from terrorists in cross-border ACH transactions. OFAC had reason to believe that we needed better safeguards for our financial system, especially after 9/11. The ACH network today is increasingly vulnerable to potential abuse with respect to the international cross-border movement of funds because of the expanded use of the ACH for one-off transactions from the practice of recurring transactions between known and trusted parties, as well as the speed and efficiency of the ACH network in general.
To address their concerns, OFAC worked with NACHA to construct a payment format that would permit sufficient information to identify parties to the cross-border transaction. In 2004 NACHA began working with OFAC on a proposed rule change for international ACH transactions and a new format that would include the data elements from the Bank Secrecy Act’s (BSA) “travel rule.” Essentially, the BSA travel rule includes more robust information about the payment originator and beneficiary so that a financial institution can review the transaction for OFAC compliance. When the IAT rule goes into effect, all transactions that meet the new definition of international ACH transactions made via the ACH Network will be required to use the IAT SEC code.
The IAT code will make it easier for financial institutions to identify international payments in the ACH network since currently many transactions are mistakenly coded as domestic. This mistake occurs because today many international payments are introduced into the U.S. ACH network through domestic correspondent relationships and are then inadvertently transmitted as domestic transactions. So the new code will make it easier for financial institutions to identify these payments and comply with their OFAC obligations, which incidentally, have not changed. IAT really creates more transparency in two significant ways: by identifying the transaction as international and by revealing all parties to the cross-border transaction. In the end, transparency in retail payment systems is a good thing and should help the banking industry combat fraud and other abuses in the ACH network.
By Cindy Merritt, assistant director of the Retail Payments Risk Forum at the Atlanta FedJuly 24, 2009 in ACH, fraud, risk | Permalink
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accounting services |
July 28, 2009 at 02:25 AM
June 07, 2009
How much risk lurks in the shadows of daylight overdraft?
With the U.S. banking system in financial distress, the Fed provides payments services to a greater number of problem banks. So how much of an issue is the credit risk associated with retail payments today? As you know, financial institutions, much like the commercial and retail customers they serve, from time to time experience the need for overdraft credit—short-time loans to accommodate the management of incoming and outgoing funds. The Fed provides daylight overdraft protection to financial institutions that experience timing differences in ACH service offerings so that they can meet their cash flow obligations, in the same way a financial institution provides overdraft protection. The Fed, like any prudent lender, also maintains a responsibility to carefully manage the credit risk exposure from these provisions of credit. The need for the Fed to monitor ACH activity for overdraft exposure becomes critical when a financial institution's health is in question.
How does the Fed monitor the financial health of financial institutions?
It is important to remember that the Fed is also a bank regulator, and it works collaboratively with other bank regulators to monitor bank conditions. When a bank's financial condition deteriorates, the agencies communicate the institution's regulatory rating and other relevant information to the Fed in its U.S. payments oversight role. Wearing that hat, the Fed may choose to restrict lending in a number of ways, such as limiting access to daylight credit.
Real-time monitor
One tool that can be used to restrict daylight credit access is "real-time monitoring" (RTM), which is implemented through the Account Balance Monitoring System (ABMS). With RTM, the Fed can reject certain transactions from posting to an institution's account if that posting would cause the institution to exceed its daylight credit limits. Under RTM, any funds transfers from the account or ACH credit originations (which are required to be prefunded) that would cause an institution to exceed its daylight credit capacity would be rejected.
Interest on reserves and daylight overdrafts
One conundrum in this equation is that the need for overdrafts has diminished recently as banks began maintaining higher reserves, prompted by the Fed's decision to start paying interest on reserve balances. Before, banks were reluctant to hold too many reserves because they were a nonearning asset. Since the Fed didn't compensate banks for holding the reserves, banks could find more rewarding uses for their funds. With more reserves in the system, the need for intraday borrowing from the Fed has decreased. Whether that trend will continue as the economy improves and the financial condition of the banking sector stabilizes, thereby creating more lucrative uses for excess reserves, remains to be seen—but then maybe we won't have as many high-risk banks as the economy improves. Let's hope not.
By Cindy Merritt, assistant director of the Retail Payments Risk Forum at the Atlanta Fed
June 7, 2009 in ACH, banks and banking | Permalink
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May 19, 2009
State attorneys general shine light on gray areas of payments risk
When considering due diligence standards in payments relationships, banks and others may want to look beyond bank regulators, legal requirements, and NACHA rules to also include considerations developed out of the work of state attorneys general. During the last several years, state attorneys general have found their way into the payments risk management space as they have sought to inhibit merchants from evading taxes, promoting internet tobacco sales to minors, and other illegal behaviors. In their pursuit of wrongdoers, states have investigated the payments processors who aggregate and/or initiate ACH payments or remotely created checks, and the banks who accept these items through their account relationships as well. In doing so, these states have negotiated settlement agreements, which include due diligence policies for banks and payment processors. The results of these efforts may raise interesting questions as to whether or not existing regulatory guidance, NACHA rules, or legal requirements are sufficiently specific or clear standing alone.
One instance is instructive. Beginning in 2006, the states of California, Idaho, and New York began to investigate Internet tobacco sales activities in violation of various state laws. These investigations led to negotiated settlements with ECHO Inc., a payments processor, and with First Regional Bank, a California-based financial institution. These settlements included detailed requirements for the processor and the bank to perform due diligence on their customers (or, for the bank, their customers' customers). In particular, First Regional Bank was required to institute a "Tobacco Policy" under which the bank would perform specific steps to ensure it did not permit illegal tobacco sales activity to be facilitated using payments originated via its accounts. As an example, the bank's policy would include terminating accounts with any processor who failed to terminate processing for any customer who a) switched ACH activity to "demand drafts" (presumably focused on remotely created checks) once notified of a problem or b) offered "demand drafts" as a means to avoid ACH return scrutiny. This provision highlights a particular concern with illegal activity, including frauds, switching between ACH payments, and remotely created checks to avoid the network scrutiny instituted by the ACH operators and NACHA.
The efforts of the states, such as in the example above, raise potential questions about the specificity and clarity of the guidelines issued by the banking regulators, such as those issued by the OCC and FDIC with regard to payments processor relationships. The bank supervisors promote banks taking a risk-based view of due diligence requirements rather than prescribing specific actions. NACHA rules require commercially reasonable standards generally, suggest contracts should be in place with third-party senders, and make clear the ODFI bears the responsibility for the items it introduces into he ACH network but do not otherwise prescribe due diligence standards for processor relationships.
Subject to the principles-based standards described in supervisory guidance, NACHA rules, and other considerations, banks and even payments processors themselves might want to consider the standards included in state attorney general settlements in developing their own due diligence policies.
By Clifford S. Stanford, assistant vice president and director of the Retail Payments Risk Forum at the Atlanta Fed
May 19, 2009 in ACH, bank supervision, checks, remotely created checks | Permalink
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March 10, 2009
B2B: Will checks ever really go away?
While check writing in the aggregate is on the decline, one last bastion may remain in the business-to-business (B2B) arena. While consumers are adopting electronic payments at an increasing rate, most B2B payments continue to be made by check—roughly 74 percent, according to a 2007 survey conducted by the Association of Financial Professionals (AFP). This study found that the average business surveyed makes 65 percent of its B2B payments to suppliers by check, with 18 percent by automated clearinghouse (ACH) credit and 11 percent by wire transfer. With the myriad payment choices available to suit a variety of user preferences for both consumers and businesses, why has the migration to electronic payments by businesses lagged that of consumers?
The adoption of electronic payments by consumers has exceeded analysts' projections in recent years as a result of a confluence of a number of different variables, namely convenience, security, and efficiency, which have provided the necessary incentives for adoption. The Internet has emerged as an increasingly trusted payments and product distribution channel as well, facilitating the initiation of electronic payments via both card networks and the ACH. While the same benefits of electronic commerce are desirable to the B2B payments segment, the complexity of the B2B payments landscape along with technology constraints for smaller business partners contribute to a less rapid adoption than seen in the consumer-to-business segment. What are the major B2B barriers to adoption, and how are they being addressed?
The problem with cards
Cards are an expensive proposition for payments between trusted and known business partners, particularly for large value payments. While they offer advantages such as financial management and control, they also impose a hefty interchange fee of roughly 2 percent of the transaction. If you know and trust your customer, you are probably more inclined to write a check, which has no transaction fee. This scenario is likely to be particularly true during times of economic downturn such as we are now experiencing.
ACH and wire transfers
Wire transfers are important for payments that are high dollar and require immediate settlement. Their high cost limits their use, however. Also, wire transfers tend to be used by larger versus smaller business organizations. The ACH is growing more popular for larger organizations for payments between major trading partners but is used more to receive than to make payments. It is also important to note that NACHA rules currently prohibit the conversion of business checks in the ACH. While the ACH format permits the transmission of payments and remittance data, there are a number of other alternative methods to deliver remittance information.
Obstacle: no standard remittance information
One clear obstacle to the migration from paper to electronic payments is the lack of standardization in the way remittance information is sent with the payment. Because of variations in data formats, trading partners may not be able to send or receive automated remittance information with electronic payments, inhibiting the automation of accounts receivable systems. Smaller organizations typically lack full integration between electronic payment and accounting systems, as their incentives to invest in the enabling technology are likely to differ from their large corporate counterparts.
Since electronic payments are typically faster than checks, an accounts receivable function might embrace an electronic payment in order to reduce the time to collect receivables, in direct contrast to an accounts payable function. Sophistication and size generally correlate to willingness to invest in the technology to adopt electronic payments.
Moving from checks to electronic payments can reduce fraud
In the AFP's 2008 Payments Fraud and Control Survey organizations of all sizes reported more attempted or actual payments fraud in 2007 from checks than from other payment methods. However, the report also notes that the majority of survey respondents did not actually suffer financial loss from the fraudulent activitity, suggesting that effective use of risk mitigants to control fraud once it is identified.
| Payment Methods Subject to More Payments Fraud in 2007 Compared to 2006 (Percent of Organizations Subject to Greater Amount of Attempted or Actual Payments Fraud) | |||||||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||||||
| * receive only | Source: 2008 AFP Payments Fraud and Control Survey | ||||||||||||||||||||||||||||||||
B2B future is likely electronic
While the pace of migration to B2B electronic payments may not accelerate in today's distressed financial environment, eventually the obstacles to the electronification of B2B will be resolved. For now, the bottom line is that businesses want to send payments in the most cost-effective way possible, and no one payment type may suit every payment need. Just as consumers will continue to avail themselves to the full spectrum of payment alternatives, depending upon what is cheapest, trusted, and most convenient, so too will businesses choose payment options that makes the most business sense.
Electronic payments are growing in the B2B space, but not by leaps and bounds, even in recent times when the economic outlook was favorable and financial institutions were readily investing in payments technology. While the future of B2B payments will likely be electronic versus paper-based, there is no clear evidence to show whether businesses will choose one electronic option to the exclusivity of another. For now, checks continue to represent a good value proposition to businesses, particularly when they can be imaged during the collection process to avoid transportation costs.
By Cindy Merritt, assistant director of the Retail Payments Risk Forum at the Atlanta Fed
March 10, 2009 in ACH, cards, checks | Permalink
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B2B electronic payments may not accelerate in today's distressed financial environment, eventually the obstacles to the electronification of B2B will be resolved. For now, the bottom line is that businesses want to send payments in the most cost-effective way possible, and no one payment type may suit every payment need.
Posted by:
B2B portals |
October 07, 2009 at 09:59 AM
I understand the fact that cards, ACH, and wire transfers are in effect, to some degree, competing with one another based on the size of the transaction, but are they also targeting different types of payments/transactions from different types of businesses? It seems like consumers are paying for everything by either credit card or an automatic bank withdrawal (checks are a payment choice of the past or in some sense a last resort). Are there any statistics available that show or breakout percentages of B2B or consumer payments by avenue over time? Are they heading in an evident direction? Do you think that one type may win out over the other in the near future?
Posted by:
Megan |
March 20, 2009 at 09:47 AM
February 02, 2009
Retail Payments Risk and Fraud: Detection and Mitigation
The Retail Payments Risk Forum hosted a conference titled "Risk and Fraud in Retail Payments: Detection and Mitigation" at the Federal Reserve Bank of Atlanta on Oct. 6–7, 2008. This conference provided a collaborative forum to facilitate information sharing among experts and foster improved detection and mitigation of retail payments risks and fraud in check and automated clearinghouse (ACH) payment systems. Experts from banking agencies, state and federal law enforcement, NACHA, the ACH operators, and others explored barriers and discussed opportunities. The meeting leveraged the assembled expertise to identify opportunities for further collaboration.
Three expert panels discussed themes regarding third-party risks in retail payments, enforcement actions, and consumer protection concerns. Participants were then asked to discuss key topics in smaller breakout groups, including information-sharing limitations, policing bad actors, collaborative opportunities, substantive areas of concern, and the role of the Retail Payments Risk Forum.
The proceedings of the conference are summarized in the full-length conference summary, which can be found as text or pdf. We encourage you to review the conference summary and also to provide any comments you may have within Portals and Rails. In particular, we want to know what you thought of the topics addressed. Did the discussions reflect your understanding of the issues? Did we miss anything? What topics would you like to see addressed in future such events? How do we best ensure ongoing collaborative work among industry, regulatory, and law enforcement parties in the detection and mitigation of retail payments risks and fraud? Your thoughts are very valuable to us!
By Clifford S. Stanford, assistant vice president and director of the Retail Payments Risk Forum at the Atlanta Fed.
February 2, 2009 in ACH, bank supervision, banks and banking, checks, financial services, risk | Permalink
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Thanks for posting this good information and keep posting with more new information...
Regards,
accounts outsourcing