SPECIAL BONUS EPISODE 01: Jordan Bennett on ACH Risk Management Evolution

06/08/23 • 30 min

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Episode Summary
This episode was recorded live at the Annual Payments Management Conference, this year NEACH celebrated its 50th Anniversary.

In this episode of Wrestling Payments, host Joe Casali welcomes Jordan Bennett from Nacha to delve into the intricacies of risk management for ACH payments. They discuss the evolving role of the Risk Management Advisory Group and how it aids financial institutions in mitigating risks on the ACH network. In addition, Jordan shares insights the current Nacha Request for Comment on proposed Rule Changes, emphasizing the importance of feedback and adjustments to perfect the system.
The conversation takes a deeper dive into the proposed rules for combating fraud. Jordan explains the potential use of reversals to return funds to the originator, which could significantly impact how financial institutions handle fraudulent transactions. They also discuss the new use of a return code, R 17, to specifically flag suspicious transactions.
Towards the end, the discussion shifts to the future of ACH payments, with Jordan and Joe pondering the possibility of continuous settlement and the implications for risk management. The episode concludes with Jordan's advice for professionals in operations, encouraging them to stay aware of organizational changes and fill gaps where necessary.
Guest:
Jordan Bennett, AAP, APRP
Senior Director, Network Risk Management
Nacha
Key Insights
The Evolving Role of the Risk Management Advisory Group
The Risk Management Advisory Group plays a crucial role in mitigating risks on the ACH network. Jordan explains how the group is continuously refining rules and regulations to ensure the safety and efficiency of transactions. The process involves gathering feedback and making necessary adjustments to perfect the system. This insight underscores the importance of dynamic risk management in the rapidly evolving payments industry.
Proposed Rules for Combating Fraud
Jordan discusses the potential use of ACH REVERSALs to return funds to the originator in cases of fraudulent transactions. This proposed rule could significantly change how financial institutions handle fraud. Additionally, the introduction of a new return code, R17, is discussed. This code would specifically flag suspicious transactions, providing another layer of security in the ACH payment process.
The Future of ACH Payments
The conversation shifts towards the future of ACH payments, with Jordan and Joe pondering the possibility of continuous settlement. This could have significant implications for risk management in the payments industry. Jordan also encourages professionals in operations to stay aware of organizational changes and fill gaps where necessary, highlighting the importance of adaptability in this rapidly changing field.

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Previous Episode

Proposed Rules Changes That Could Change the ACH Forever

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Episode Summary
In this episode, our host delves into the timely topic of ACH's proposed rule changes with guest expert, Sean Carter. The conversation digs into the specifics, including the revised rules around defining entries as ‘PURCHASE’ or 'PAYROLL'. They discuss the implications these modifications could have on the e-commerce and payroll sectors, while acknowledging the necessity of such standardization for seamless data analysis.

The dialogue gets particularly thought-provoking when the discussion shifts towards the potential challenges presented by the proposed standardization of individual names on transactions. Both host and guest candidly express their concerns about the complexity of implementation and compliance with this rule.

The conversation concludes with a strong call to action, urging listeners to voice their opinions during this crucial rulemaking process. Both the host and Sean emphasize the importance of industry feedback in shaping fair and balanced rules. A must-listen for anyone navigating the changes in the payment industry.

Guest-at-a-Glance
Name: Sean Carter
What they do: CEO
Company: NEACH
Noteworthy: Pioneering advocate for modernization in the payment industry.
Where to find them: LinkedIn

Key Insights
The Role of NEACH in the Payments Industry. Both Sean Carter and Joe Casali represent NEACH, an organization focused on enhancing the payments ecosystem. In the episode, they discuss NEACH's efforts to provide resources, educate stakeholders, and drive innovation in the payments arena. They also highlight the organization's role in aiding businesses navigate regulatory changes and how they are actively inviting feedback to help shape their approach.

Episode Highlights
An Invitation to Influence Rule Changes
The podcast delves into the power companies have in shaping regulations that directly impact their operations. Sean emphasizes the importance of participating in the Request for Comment (RFC) process and providing valuable feedback on proposed rules.

"Don't just sit back and let these rules happen to you. It's much better to have an active role in shaping them."

NEACH's Role in Navigating Regulatory Changes
Both Sean and Joe talk about the role NEACH plays in aiding businesses navigate through regulatory changes. They highlight NEACH's commitment to educating and providing resources to stakeholders, especially when it comes to understanding AML regulations.

"We're here to help, obviously, if you wanna to have us jump on a call with a couple of your staff to go through these things, we do that all the time."

The Permanent Change in the Payments Arena
The podcast concludes with a strong message about the permanence of changes in the payments industry. Joe underlines that these shifts, particularly in regulations and the rise of RTP, are not temporary disruptions but rather lasting transformations.

"This is changing now, and this is, uh, it's, it's permanent. This is how things will be. If, if, uh, if they all get approved without any comments."

Top Quotes

Sean Carter [00:20:00]: "Don't just sit back and let these rules happen to you. It's much better to have an active role in shaping them."

Next Episode

SPECIAL BONUS EPISODE 02: Fireside Chat with Peter Tapling

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This episode was recorded live at the Annual Payments Management Conference, this year NEACH celebrated its 50th Anniversary.
Episode Summary

In this episode of Wrestling Payments, host Joe Casali sits down with Peter Tapling from PTAP Advisory, LLC. They dive into the world of payments, discussing the importance of continuous learning in the face of constant innovation. Peter emphasizes the need to understand how new faster payment methods can be applied to existing work processes, encouraging listeners to disrupt their routines for the sake of progress.

The conversation then shifts to the concept of directories in payment systems. Peter explains how directories work in popular payment platforms like Zelle, PayPal, and Venmo. He also highlights the lack of a directory in instant payment schemes, sparking curiosity about the future of this feature in the payment industry.

Finally, the duo explores the realm of artificial intelligence (AI). Peter shares insights on the evolution of AI since the 1960s, highlighting the importance of computational resources and data in AI development. He encourages listeners to learn more about AI and its implications in the payments industry. This episode is a must-listen for anyone looking to stay ahead in the ever-evolving world of payments.

Guest-at-a-Glance
Peter Tapling
Managing Director
PTAP Advisory, LLC
LinkedIn

Noteworthy: Peter is a technology expert with over 20 years of experience in the payments industry. His deep understanding of the intersection of fraud, identity, risk, and payments, coupled with his interest in innovation, makes him a valuable resource in the rapidly evolving world of payments.