Mobile payments have yet to take off domestically, but Nacha is positioning the automated clearing house network to play a prominent role, if and when they do.
The Herndon, Va., electronic payments association said last week that in May its members had approved a new rule for classifying ACH debit transactions initiated via mobile channels.
Consumers, billers and their banks already have been performing and authorizing ACH payments using mobile devices but Nacha had not specifically addressed how such transactions should be classified.
"We wanted to try to get out in front of the use of the network with mobile devices," Mike Herd, the managing director of ACH network rules at Nacha, said in an interview Thursday.
"We know it's starting to happen, so we want there to be some guidance and some clarity and consistency of usage among all the participants."
The new rule is not a major change; it says that mobile ACH payments will use Nacha's existing WEB Standard Entry Class code, which pertains to debit to consumer accounts that are set up by a receiver over the Internet. The definition was expanded to include debits initiated or involving communication sent over a wireless network.
The rule change does not pertain to credit entries when funds are "pushed" out of a consumer's account rather than "pulled" from them; credits fall under Nacha's existing Consumer Initiated Entry, or CIE, code, according to the payments association.
The mobile rule becomes effective Jan. 1 but Nacha members can begin adhering to it now.
A Nacha Rules Work Group issued a request for comments last fall seeking industry input about the extent to which mobile devices were used to perform ACH payments and whether a separate SEC code was necessary.
The conclusion was that, at least for now, scenarios involving mobile ACH debits already were addressed by the existing WEB transaction code.
Still, "we saw a gap in the rules that just fails to acknowledge mobile payments," said Devon Marsh, a senior vice president and risk manager in Wells Fargo & Co.'s treasury management, risk and compliance group.
However, Nacha expects to "take a more thorough review" to "see if there's any other type of unique risk or management" issues that would require creating an entirely separate entry code for mobile payments at some point in the future, Herd said.
"It makes sense" to use the WEB code today, because in most mobile ACH situations a Web browser is involved in initiating the transaction, said Nancy Atkinson, a senior analyst for wholesale banking for Aite Group LLC.
"The primary advantage is there is no coding changes," Atkinson said. "None of the providers of ACH software or services for the banks have to go out and make any changes to their systems."
The downside is that there is no way to tell, which means it will be difficult to track how much ACH transaction volume mobile payments are generating, which could be valuable data for Nacha, its members and technology providers, she said.
"We looked at it as an opportunity for the ACH network to position itself for the new innovative ideas that are starting to pop up relative to mobile," said Timothy Schmidt, the vice president of electronic payments for U.S. Bancorp in Minneapolis and a member of the rules work group that addressed the mobile ACH issue.
"We've seen some stuff with mobile payments that our banks are rolling out to their consumers," Schmidt said. "Many of those solutions utilize the ACH network."
Including mobile entries in the WEB category provides a foundation upon which Nacha can build if a separate transaction category should become necessary, Schmidt said.
U.S. Bancorp this month said it planned to roll out CashEdge Inc.'s Popmoney person-to-person transfer service to customers this year.
The service will be available to U.S. Bancorp's mobile banking customers and through its mobile application called U.S. Bank Mobile Wallet.
The service will enable customers to send money to other banks' customers through the ACH network, Schmidt said.
The ACH network and industry players such as Nacha could play a larger role in ushering in mobile payments, especially person-to-person systems, if it was easier for people to find information about potential payment recipients, Liisa Kanniainen, the executive director of the Mobey Forum, an international group that promotes mobile payments.
"The only additional piece of infrastructure that would be needed is a database" linking mobile phone numbers to individuals' bank account numbers, Kanniainen said.
With Nacha's move, there now is a rule that "clearly states" how participants "can carry at least part of a transaction that could lead to a P-to-P type of payment" through the ACH network, Wells Fargo's Marsh said.
