News

Contacts:

• Michael Herd
  703/561-3924
  mherd@nacha.org
• Rob Unger
  703/561-3913
  runger@nacha.org

Herndon, VA, April 5, 2002 - The Automated Clearing House (ACH) Network has the flexibility to accommodate XML-formatted payment remittance records in the same manner that it currently transmits EDI-formatted records, according to NACHA - The Electronic Payments Association. In addition, NACHA's Internet Council has identified five types of potential changes to the existing business-to-business e-commerce and payments environment for which it would recommend that the ACH Network be changed to accommodate XML-formatted remittance data.

"XML is a topic of great interest that the Internet Council will continue to monitor closely," said David L. Merritt, Chairman of the Internet Council and vice president and product design manager in the New Business Development Group of Mellon Global Cash Management. "The Council will recommend rule and format changes to NACHA as warranted by developments in the marketplace."

The Internet Council has issued a white paper entitled XML Formatted Remittance Data in the ACH: A Feasibility Assessment. The white paper reviews the current state of ACH business-to-business payments and remittance processing, the emerging use of XML in remittance processing, and the perceived future of Internet-based B2B payments. The paper is posted on the Council's web site at http://internetcouncil.nacha.org.

The Council identified five types of potential changes in market conditions that may warrant the need for XML remittance data in the ACH:

• Industry adoption of an XML payment standard;
• Substantial increase in customer or constituent demand;
• Establishment of regulatory requirements by a legal or governing authority;
• A legal or risk assessment showing that stakeholders are somehow at risk or have liability for not providing this capability;
• Evidence of adoption and use on competitive bulk-payments networks.

Businesses require remittance information in order to reconcile payments within accounts receivable systems. The ACH Network permits remittance data in standard electronic data interchange (EDI) formats to be transmitted with an ACH payment. In 2001 there were 143 million such payments using the ACH Network with 413 million EDI records. Financial EDI payments on the ACH Network have grown by 216 percent since 1997; use of EDI records has grown by 279 percent during that period.

Despite the growth of Financial EDI, the Internet Council has identified several opportunities associated with changing the ACH Network to accommodate XML-formatted remittance information. These opportunities include lower long-term costs, lower barriers to e-commerce entry for small- and medium-enterprises, integration of payment systems with XML-formatted supply chains, and increasing markets for payment and remittance services.

The Internet Council was established in 1996 to facilitate the development of global electronic commerce by enabling business, governments and consumers to utilize present and future payments over open networks in a secure and cost-effective manner. The Internet Council has more than 100 members including financial institutions, companies, technology providers and government agencies.

About NACHA - The Electronic Payments Association
NACHA represents more than 12,000 financial institutions through its 33 regional payments associations, and 600 organizations through its seven industry councils and corporate Affiliate Membership program.  NACHA develops operating rules for the Automated Clearing House (ACH) Network and for electronic payments in the areas of Internet commerce, electronic bill payment and presentment (EBPP), financial electronic data interchange (EDI), international payments, electronic checks, electronic benefits transfer (EBT) and student lending.