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Is ACH a Secure Network for Payments?

The subject of security is always a sticking point especially when dealing with money matters. This time the spotlight is on ACH with both merchants and customers eager to find out if ACH is a safe way to make and receive payments.

Similar to all payment technologies, ACH also comes with its risks. There’s no 100% guarantee you are safe from fraud. However, there are a number of measures users can take to guard themselves when receiving or sending payments via the ACH network.
ACH is normally regulated by the state government and managed by National Automated Clearing House Association (NACHA). To register on the network, you must provide useful data such as bank details, usernames, passwords and routing numbers.

These requirements are similar to what is expected of you in the credit card industry. Only, with ACH, it’s not obligatory that payments comply with the PCI standards. That’s why as a merchant, it’s advisable to employ extra protection which include;

  • Secure Vault Payments (SVP)

SVP is a new service that allows a user to carry out ACH transactions without having to share sensitive financial information with the recipient. With this feature, you can now approve all your transactions directly via your online bank account.

  • Merchant-Specific Registration

One advantage that ACH has over others is the fact you must officially build personal relationships with all your receivers and payees. The ACH system does not allow transaction for unidentified and random transfers.

  • Micro-validation

After forming a business rapport that allows transactions with a merchant, the provider who processes your payments will add two “micro-deposits” into your bank account.  Identical to the validation process for PayPal, you must then confirm the exact amount of the deposits so as to start on receiving or sending any money.

Security guidelines ACH Customers should have at their fingertips

For customers, it’s safer carrying out transactions with merchants who make use of some if not all of the above security measures. Then again, there are more ways to guard your secret data from snooping eyes. While it’s true The National Automated Clearing House has listed some of the best practices, the following tips apply evenly to all known types of electronic transactions, together with online banking, payments via credit cards and transfers by ACH. Here are some key tips:

  • Do not click any links sent within emails, even if they are from a “trusted” source. Alternatively, you should physically type the URLs if you wish to initiate a transaction.
  • Do not use public or unidentified computers for your financial transactions
  • Safeguard your data using virus protection on any computer you often use

Fraudsters are out to exploit naïve merchants and customers. They are clever and convincing enough to lead you into an open trap. The only way to ensure your financial accounts are safe is to keep up with the advancement in protection measures. For other security questions about the Automated Clearing house you can contact staff at FAM.