The growth of the ACH payment system is amazing, and it looks to keep up this strong growth trend for the foreseeable future. Last month, we discussed some ACH best practices for businesses. And this month we wanted to expand on that.
ACH security is a topic that seems to encourage more and more people and businesses to use the payment system. But as cyber threats grow and evolve, it’s important to monitor your ACH activity to ensure you are operating optimally and aren’t leaving your assets vulnerable. So, let’s dive into a discussion about ACH security, including some of the biggest concerns, as well as the best tips and tricks!
ACH Updates 2022
There are several reasons why ACH is one of the most secure payment forms. When you replace cash and check payments with ACH, you lower your chances of being defrauded and of losing funds through other unsavory means.
But that doesn’t mean you shouldn’t pay attention to any new or growing ACH security concerns and protocols. Nacha has published several articles about the changes to ACH in 2022.
The second phase of the most recent changes went into effect on June 30, 2022. This involved increasing data security requirements. One year ago, Nacha changed its operating rules to “require each Non-Consumer Originator that is not a Participating DFO, each Third-Party Service Provider, and each Third-Party Sender, whose ACH Origination or Transmission volume exceeds 6 million Entries annually to protect DFI Account Numbers used in the initiation of Entries by rendering them unreadable when stored electronically.”
This year, with the Phase 2 compliance window coming to a close, that origination and transaction volume has been lowered to just 2 million entries annually.
And as same day limits have now been increased to $1 million, ACH security only becomes more important.
ACH Security Concerns
Like any form of payment, it’s important that you monitor your business’s activities. There are some risks with ACH, so let’s go through the biggest security concerns.
Identity theft and payment fraud top the list of ACH security concerns, and the speed with which you can send and receive ACH payments means that you only have one business day to alert your bank to recover lost or stolen funds. But, as with any other payment form, ACH has regulations that safeguard payment data. And ReliaFund’s ACH services are built with compliance and security in mind. We even have reports and reconciliation services that can help you catch any issues before they impact your business operations greatly.
There is always a risk associated with large transactions. And as ACH becomes more and more well-known for handling these transactions seamlessly, more fraudsters and bad actors may try to manipulate and corrupt ACH transactions for their own benefit.
Fraud can also be carried out from “inside the house,” as it were. Consumer data is vulnerable and can be altered or manipulated by your business’s employees, or even the bank employees at financial institutions that help you fulfill ACH transactions. As we mentioned above, this is not a unique ACH security concern – wherever sensitive data is, there could be someone looking to steal it.
Similarly, credit and debit risks are also associated with ACH security. This occurs when someone doesn’t have sufficient funds to cover an ACH transaction or if scammers steal the account information of one of the parties involved.
The ACH system is federally regulated, and that coupled with the ACH transaction protocol and guidelines makes ACH an easy choice when it comes to efficient and secure payment methods.
ACH Security Tips & Tricks
There are security tips and tricks for all industries, networks, and technology. And we wanted to share some of our favorite ACH security tips and tricks to help keep your payments running smoothly.
- First, you should find a payment provider that can process ACH, credit, debit, and any other payments your business needs access to. It’s much easier to monitor your payment activity if it can all be found in the same software or platform. ReliaFund’s payment platform does just that.
- Set up recurring billing with ACH – this is both a great addition to the security tips and tricks as well as operationally more efficient. Wherever you can automate your payments, you should do so. This can help you and your staff see discrepancies and errors much more easily.
- Know your vendors – again, if you are on top of what normal operations and transactions look like, it will be easier to catch things that could compromise ACH security.
- Stay informed. Nacha and several other verified sources are reporting the latest security tips and protocol changes to the ACH system, and it’s important to maintain compliance and follow educated advice on best practices.
- Embrace end-to-end encryption. Unencrypted emails were blamed for several of the major breaches that took place in recent years. And all the security training in the world won’t stop a vulnerable employee from accidentally clicking on or responding to fraudulent content.
- Implement a micro-transaction verification protocol. This allows the merchant to send two small (usually less than $1) test transactions to the receiving account to verify that the account holder you’ve been doing business with actually has access to the account they claim to. This is a great way to discourage and root out scammers.
Secure Your ACH Processing with Fully Integrated Software
ReliaFund is a perfect solution for all your ACH and payment processing needs. No matter the size or scale of your business, we create tailored solutions to help you streamline your payment systems with a fully integrated platform.
The benefits of partnering with ReliaFund for your ACH processing include:
- Increased efficiency
- Faster payments
- Powerful security
- Lower costs
- Payment diversity: use ACH for one-time, recurring, payroll, and many other payments
- Accept payments online and by phone
Looking for more information about how ReliaFund’s service can help your business? Give us a call or fill out our contact form today.