Posted by Mark Brousseau
By 2014, 15 percent of enterprises will adopt layered fraud prevention techniques for their internal systems to compensate for weaknesses inherent in using only authentication methods, according to Gartner, Inc.
Gartner analysts say no single layer of fraud prevention or authentication is enough to keep determined fraudsters out of enterprise systems. Multiple layers must be employed to defend against today's attacks and those that have yet to appear.
"Malware-based attacks against bank customers and company employees are levying severe reputational and financial damage on their victims. They are fast becoming a prevalent tool for attacking customer and corporate accounts, and stealing sensitive information or funds," said Avivah Litan, vice president and distinguished analyst at Gartner. "Fighting these and future types of attacks requires a layered fraud prevention approach."
Litan explained that while the layered approach to fraud prevention tries to keep the attackers from getting inside in the first place, it also assumes that they will make it in, and that multiple fraud prevention layers are needed to stop the damage once they do. She said that no authentication measure on its own, especially when communicating through a browser, is sufficient to counter today's threats.
Gartner breaks down fraud prevention into five layers:
Layer 1
Layer 1 is endpoint-centric, and it involves technologies deployed in the context of users and the endpoints they use. Layer 1 technologies include secure browsing applications or hardware, as well as transaction-signing devices. Transaction-signing devices can be dedicated tokens, telephones, PCs and more. Out-of-band or dedicated hardware-based transaction verification affords stronger security and a higher level of assurance than in-band processes do. The technologies in this layer can be typically deployed faster than those in subsequent layers and go a long way toward defeating malware-based attacks.
Layer 2
Layer 2 is navigation-centric; this monitors and analyzes session navigation behavior and compares it with navigation patterns that are expected on that site, or uses rules that identify abnormal and suspect navigation patterns. It's useful for spotting individual suspect transactions as well as fraud rings. This layer can also generally be deployed faster than those in Layers 3, 4 and 5, and it can be effective in identifying and defeating malware-based attacks.
Layer 3
Layer 3 is user- and account-centric for a specific channel, such as online sales; it monitors and analyzes user or account behavior and associated transactions and identifies anomalous behavior, using rules or statistical models. It may also use continuously updated profiles of users and accounts, as well as peer groups for comparing transactions and identifying the suspect ones.
Layer 4
Layer 4 is user- and account-centric across multiple channels and products. As with Layer 3, it looks for suspect user or account behavior, but it also offers the benefit of looking across channels and products and correlating alerts and activities for each user, account or entity.
Layer 5
Layer 5 is entity link analysis. It enables the analysis of relationships among internal and/or external entities and their attributes (for example, users, accounts, account attributes, machines and machine attributes) to detect organized or collusive criminal activities or misuse.
Litan said that, depending on the size and complexity of the end-user institution, implementing the systems that support a layered fraud management framework can take at least three to five years, especially when it comes to the upper layers — Layers 3, 4 and 5. These efforts are continuous, because fraud prevention rules and models require ongoing maintenance, tuning and care.
"Organizations don't have years to wait to introduce fraud prevention while malware-based attacks proliferate. We recommend starting with the first layer of this fraud prevention framework, as well as the second layer, resources permitting, since these can be deployed relatively quickly," says Litan. "Enterprises that start by deploying lower levels of the layered stack can help to stave off immediate threats, with the assurance that these layers are part of an overall strategy that relies on basic fraud prevention principles, such as user and account profiling that have generally stood the test of time."
What do you think?
Showing posts with label ACH fraud. Show all posts
Showing posts with label ACH fraud. Show all posts
Tuesday, May 24, 2011
Monday, March 14, 2011
BAI attendees look for new approach to fighting fraud
Posted by Mark Brousseau
Combating fraud -- and more efficiently and precisely identifying suspect transactions -- was the hot topic at last week's BAI Payments Connect conference in Phoenix, said US Dataworks (www.usdataworks.com) Product Manager Leilani Doyle (ldoyle@usdataworks.com).
"Here is the issue: financial institutions have fraud systems that send alerts each time a suspect transaction is idenitified," Doyle explained. "Seventy-five percent of these suspects prove to be false positives. Financial institutions need a better way to prune out the false positives with a higher percentage of accurately identified fraud."
"By using an enterprise fraud hub -- which consolidates payments and related data from various channels -- banks can reduce the number of false-suspect alerts they receive by more than 50 percent, without the risk of letting a higher number of fraudulent transactions slip through," Doyle said. "One bank did a presentation at the BAI conference explaining how breaking down payments silos would allow banks to more easily 'connect the dots' to identify systematic fraud. If payments silos do not share information, the ability to identify organized fraud is far more difficult -- if not impossible."
Another bank did a presentation at BAI Payments Connect on how it has used modeling to monitor a higher number of transactions while reducing the staff required for this function by over 30 percent.
Beyond fraud, another theme of the event was how banks can regain a competitive advantage in the payments space. Doyle noted that Federal Reserve Bank executive Richard Oliver gave an insightful presentation on how banks have lost their edge in transaction processing to non-bank competitors. Banks have been too slow to react to changing market demands, and this dawdling could eventually cause them to be lose further ground to nimble competitors with more compelling products, she said.
The good news: Oliver said businesses still have tremendous trust in banks -- something that should not be discounted. But banks will likely have to partner with other entities to bridge their product gaps.
What do you think?
Combating fraud -- and more efficiently and precisely identifying suspect transactions -- was the hot topic at last week's BAI Payments Connect conference in Phoenix, said US Dataworks (www.usdataworks.com) Product Manager Leilani Doyle (ldoyle@usdataworks.com).
"Here is the issue: financial institutions have fraud systems that send alerts each time a suspect transaction is idenitified," Doyle explained. "Seventy-five percent of these suspects prove to be false positives. Financial institutions need a better way to prune out the false positives with a higher percentage of accurately identified fraud."
"By using an enterprise fraud hub -- which consolidates payments and related data from various channels -- banks can reduce the number of false-suspect alerts they receive by more than 50 percent, without the risk of letting a higher number of fraudulent transactions slip through," Doyle said. "One bank did a presentation at the BAI conference explaining how breaking down payments silos would allow banks to more easily 'connect the dots' to identify systematic fraud. If payments silos do not share information, the ability to identify organized fraud is far more difficult -- if not impossible."
Another bank did a presentation at BAI Payments Connect on how it has used modeling to monitor a higher number of transactions while reducing the staff required for this function by over 30 percent.
Beyond fraud, another theme of the event was how banks can regain a competitive advantage in the payments space. Doyle noted that Federal Reserve Bank executive Richard Oliver gave an insightful presentation on how banks have lost their edge in transaction processing to non-bank competitors. Banks have been too slow to react to changing market demands, and this dawdling could eventually cause them to be lose further ground to nimble competitors with more compelling products, she said.
The good news: Oliver said businesses still have tremendous trust in banks -- something that should not be discounted. But banks will likely have to partner with other entities to bridge their product gaps.
What do you think?
Tuesday, June 29, 2010
Taking the Sting Out of ACH Dispute Management
Posted by Mark Brousseau
The financial services landscape is undergoing radical change, with transaction processing rapidly migrating from paper-based to electronic payments. According to the Federal Reserve's 2007 Payments Study, electronic payments now exceed two-thirds of all non-cash payments -- a big change from a decade ago when paper checks were still king. Automated Clearing House (ACH) transactions have been a key to the growth of electronic payments. The number of ACH transactions in 2008 topped 18.2 billion, representing an increase of 1.2 billion over 2007, NACHA reports.
But this ACH growth also has created new back-office challenges, particularly in the area of transaction dispute management. The limitations of traditional in-house ACH systems and the strict time constraints and complex processing requirements imposed by NACHA rules and Regulation E have led to increases in operations expenses and potentially higher charge-offs associated with ACH disputes. And changes in the interpretation of Regulation E -- spelled out by Federal Reserve Bank staff and an OCC Advisory Letter -- may further complicate matters.
The Situation
One of the nation's largest bank ACH processors has taken proactive measures to better manage its ACH disputes. The bank's ACH operations perform a wide range of functions, including daily inbound and outbound transaction management, implementation and maintenance, customer service, compliance, and exception support.
Over the past several years, the bank has achieved significant growth in its ACH transaction volume. Along with this growth in overall ACH transactions, the bank has seen its ACH disputes increase 25 percent during the same period.
To be sure, the overall growth in ACH volumes is a factor in the increasing number of disputes. But customers also are better educated about ACH, and have higher expectations. Regardless of the cause, ACH disputes are costly to manage (with different attributes for each dispute and conflicting Regulation E and NACHA timelines), and present the risk of non-compliance and charge-off losses.
The Solution
Recognizing these challenges, the bank began an evaluation of solutions to better manage its ACH dispute process. At that time, the bank used an ACH processing product that kept transactions online for a short period of time, after which the information was archived to an offline report warehouse. The offline warehouse required the bank to "restore" reports and customer statements, a time-consuming and costly process that prevented the bank from providing quick responses to customer inquiries.
The bank evaluated three options for enhancing its ACH capabilities: further extending its legacy ACH solution's capabilities, developing an in-house solution, or leveraging a hosted solution. Scarce in-house IT resources precluded the bank from extending its legacy solution's warehouse capabilities. Similarly, the bank ruled out developing a custom solution because of competing demands for its limited IT resources and the long time-to-market required to develop an in-house solution.
Ultimately, the bank selected a hosted ACH solution from eGistics based on its compelling business case and its track record in the bank's lockbox operation. Using eGistics, the bank was able to implement an ACH Dispute Management solution faster, more effectively, and more economically than it could using internal resources or its current ACH vendor.
Within a few weeks of selection eGistics delivered its ACH solution, which supports a range of ACH functions including dispute research, customer service inquiries (notably questions about transaction details and debit authorization), and compliance reporting for potential rules violations. eGistics’ ACH Dispute Management solution provides a secure, easy to use Web interface that enables users to quickly search ACH transactions using a variety of configurable search criteria.
The Benefits
Most important to the bank, the eGistics hosted framework streamlined the research, management and reporting of ACH transaction disputes. Here's how it works: The bank receives ACH transmission files from the ACH network. A copy of these files is forwarded to the eGistics ACH solution. Operators log in to the eGistics platform and are able to search for transactions in real-time. Additionally, transactions can be marked as disputed, and then managed through the resolution process. Because there is a single view of the transactions, all operators can see the status of a dispute or inquiry. Finally, each disputed transaction is given a disposition status such as: credited, denied, or returned.
Streamlined research and management of ACH disputes were part of an overall business case for the bank that included long-term storage, improved customer service, attractive total cost of ownership, minimal internal resources, minimal capital expense, and rapid deployment. And eGistics provided the bank with the peace of mind that its solution complied with industry requirements, was reliable and scalable, ensured the privacy of critical data, and maintained complete access management through transaction tracking, auditing and reporting.
The eGistics hosted solution enhances the bank's dispute management process by providing: real-time distributed data access to any authorized user (even across branches or operations centers); intuitive search capabilities; the ability to annotate comments to disputed transactions; and the ability to export data (such as for batch extracts). The eGistics solution also has provided the bank with expanded search capabilities, including the ability to search on any alpha-numeric field (e.g. date, amount, customer, etc.) or using multiple "operators" (e.g. "contains," "greater than," "less than," "equal to," etc.). eGistics' ability to search data based on configurable parameters allows the bank to spot trends and react more effectively to unauthorized ACH debits. And the filtering capabilities provided by the eGistics research tool will enable the bank to block and restrict access to certain transactions, when required. What's more, the bank can store data in the eGistics solution for an unlimited period of time.
The functionality delivered by the eGistics solution supports a range of ACH functions at the bank, including: dispute research; customer service inquiries (notably, questions about transaction details and debit authorization); fraud mitigation; and compliance (reporting for potential rules violations).
The Bottom Line
At a time when rising ACH dispute volumes are impacting the back-office operations at banks, one of the largest ACH banks in the United States has achieved significant benefits by moving to a hosted ACH dispute management solution. These benefits include better, faster customer service, more accurate and timelier dispute status and tracking, streamlined ACH operations with lower costs, and reduced losses from charge-offs.
The financial services landscape is undergoing radical change, with transaction processing rapidly migrating from paper-based to electronic payments. According to the Federal Reserve's 2007 Payments Study, electronic payments now exceed two-thirds of all non-cash payments -- a big change from a decade ago when paper checks were still king. Automated Clearing House (ACH) transactions have been a key to the growth of electronic payments. The number of ACH transactions in 2008 topped 18.2 billion, representing an increase of 1.2 billion over 2007, NACHA reports.
But this ACH growth also has created new back-office challenges, particularly in the area of transaction dispute management. The limitations of traditional in-house ACH systems and the strict time constraints and complex processing requirements imposed by NACHA rules and Regulation E have led to increases in operations expenses and potentially higher charge-offs associated with ACH disputes. And changes in the interpretation of Regulation E -- spelled out by Federal Reserve Bank staff and an OCC Advisory Letter -- may further complicate matters.
The Situation
One of the nation's largest bank ACH processors has taken proactive measures to better manage its ACH disputes. The bank's ACH operations perform a wide range of functions, including daily inbound and outbound transaction management, implementation and maintenance, customer service, compliance, and exception support.
Over the past several years, the bank has achieved significant growth in its ACH transaction volume. Along with this growth in overall ACH transactions, the bank has seen its ACH disputes increase 25 percent during the same period.
To be sure, the overall growth in ACH volumes is a factor in the increasing number of disputes. But customers also are better educated about ACH, and have higher expectations. Regardless of the cause, ACH disputes are costly to manage (with different attributes for each dispute and conflicting Regulation E and NACHA timelines), and present the risk of non-compliance and charge-off losses.
The Solution
Recognizing these challenges, the bank began an evaluation of solutions to better manage its ACH dispute process. At that time, the bank used an ACH processing product that kept transactions online for a short period of time, after which the information was archived to an offline report warehouse. The offline warehouse required the bank to "restore" reports and customer statements, a time-consuming and costly process that prevented the bank from providing quick responses to customer inquiries.
The bank evaluated three options for enhancing its ACH capabilities: further extending its legacy ACH solution's capabilities, developing an in-house solution, or leveraging a hosted solution. Scarce in-house IT resources precluded the bank from extending its legacy solution's warehouse capabilities. Similarly, the bank ruled out developing a custom solution because of competing demands for its limited IT resources and the long time-to-market required to develop an in-house solution.
Ultimately, the bank selected a hosted ACH solution from eGistics based on its compelling business case and its track record in the bank's lockbox operation. Using eGistics, the bank was able to implement an ACH Dispute Management solution faster, more effectively, and more economically than it could using internal resources or its current ACH vendor.
Within a few weeks of selection eGistics delivered its ACH solution, which supports a range of ACH functions including dispute research, customer service inquiries (notably questions about transaction details and debit authorization), and compliance reporting for potential rules violations. eGistics’ ACH Dispute Management solution provides a secure, easy to use Web interface that enables users to quickly search ACH transactions using a variety of configurable search criteria.
The Benefits
Most important to the bank, the eGistics hosted framework streamlined the research, management and reporting of ACH transaction disputes. Here's how it works: The bank receives ACH transmission files from the ACH network. A copy of these files is forwarded to the eGistics ACH solution. Operators log in to the eGistics platform and are able to search for transactions in real-time. Additionally, transactions can be marked as disputed, and then managed through the resolution process. Because there is a single view of the transactions, all operators can see the status of a dispute or inquiry. Finally, each disputed transaction is given a disposition status such as: credited, denied, or returned.
Streamlined research and management of ACH disputes were part of an overall business case for the bank that included long-term storage, improved customer service, attractive total cost of ownership, minimal internal resources, minimal capital expense, and rapid deployment. And eGistics provided the bank with the peace of mind that its solution complied with industry requirements, was reliable and scalable, ensured the privacy of critical data, and maintained complete access management through transaction tracking, auditing and reporting.
The eGistics hosted solution enhances the bank's dispute management process by providing: real-time distributed data access to any authorized user (even across branches or operations centers); intuitive search capabilities; the ability to annotate comments to disputed transactions; and the ability to export data (such as for batch extracts). The eGistics solution also has provided the bank with expanded search capabilities, including the ability to search on any alpha-numeric field (e.g. date, amount, customer, etc.) or using multiple "operators" (e.g. "contains," "greater than," "less than," "equal to," etc.). eGistics' ability to search data based on configurable parameters allows the bank to spot trends and react more effectively to unauthorized ACH debits. And the filtering capabilities provided by the eGistics research tool will enable the bank to block and restrict access to certain transactions, when required. What's more, the bank can store data in the eGistics solution for an unlimited period of time.
The functionality delivered by the eGistics solution supports a range of ACH functions at the bank, including: dispute research; customer service inquiries (notably, questions about transaction details and debit authorization); fraud mitigation; and compliance (reporting for potential rules violations).
The Bottom Line
At a time when rising ACH dispute volumes are impacting the back-office operations at banks, one of the largest ACH banks in the United States has achieved significant benefits by moving to a hosted ACH dispute management solution. These benefits include better, faster customer service, more accurate and timelier dispute status and tracking, streamlined ACH operations with lower costs, and reduced losses from charge-offs.
Monday, April 26, 2010
TAWPI @ NACHA Payments
Posted by Mark Brousseau
Consumers’ use of their Internet-capable mobile phones to access online banking and pay bills online climbed significantly over the past 12 months, according to new research released and jointly sponsored by FIS, NACHA, and eCom Advisors. This research was unveiled at a breakfast press conference this morning at NACHA’s PAYMENTS 2010 Conference at the Washington State Convention Center in Seattle.
“With expanding ownership of Internet-capable smartphones, consumers’ use of their mobile devices to access online banking information, view and pay bills, and make online purchases is becoming much more mainstream. We worked with NACHA and eCom Advisors on this research to better understand the pace of mobile banking adoption and the primary factors that are driving this consumer behavior,” stated Kay Nichols, executive vice president of channel solutions at FIS. FIS is a pioneer in delivering integrated mobile banking and payment solutions that provide end-customers with the convenience and immediacy in accessing their banking information.
The March 2010 survey, completed by 1,236 U.S. consumers who own and use mobile phones, was designed as a repeat of a similar consumer survey fielded by eCom Advisors in March 2009. The 2010 research found that 27 percent of consumers who own an Internet-capable mobile phone had used the device to access their financial institution’s online banking website within the past 30 days, compared to the 2009 result of 22 percent. In addition, 20 percent of consumers who own an Internet-capable mobile phone had used the device within the past 30 days to pay bills through a financial institution or a biller website, a significant increase from last year’s response of 11 percent.
In addition to adoption and use, the 2010 research foundthat consumers’ propensity to use mobile devices to conduct banking functions correlates more to the sophistication of the mobile device rather than the consumer’s age. The percentage of consumers who reported using their Internet-capable mobile phone to conduct online banking transactions within the past 30 days varied significantly by type of device owned:
… 65 percent of consumers who owned the newest touch screen smartphones (e.g., Apple iPhone, BlackBerry Storm, Motorola Droid, Google Nexus);
… 30 percent of consumers who owned other touch screen smartphones (e.g., Motorola Surf, Samsung Impression, LG Dare);
… 27 percent of consumers who owned non-touch screen smartphones with QWERTY keyboards (e.g., BlackBerry Curve, BlackBerry 8800 Series, Samsung Gravity, Palm Treo);
… 9 percent of consumers that owned of all other types of Internet-capable mobile phone models (e.g., Motorola RAZR, Verizon Escapade, Nokia 2680 Slide, Nokia 1680 Classic).
“Some smartphones are clearly smarter than others when it comes to inducing mobile banking and bill pay usage,” stated Fred Brothers, managing partner of eCom Advisors. “Regardless of the consumer’s age, those equipped with iPhones or the newest smartphones with full-sized touch screens are twice as likely to use them for mobile financial services as those who have smartphone devices with smaller screens or keyboards,” said Brothers.
The influence of mobile device sophistication was also apparent in consumers’ bill payment behaviors. The percentage of consumers who reported using their Internet-capable mobile phone to pay bills online through a financial institution or a biller websitewithin the past 30 days varied significantly by type of device owned:
… 40 percent of consumers who owned the newest touch screen smartphones (e.g., Apple iPhone, BlackBerry Storm, Motorola Droid, Google Nexus);
… 16 percent of consumers who owned other touch screen smartphones (e.g., Motorola Surf, Samsung Impression, LG Dare);
… 22 percent of consumers who owned non-touch screen smartphones with QWERTY keyboards (e.g., BlackBerry Curve, BlackBerry 8800 Series, Samsung Gravity, Palm Treo);
… 13 percent of consumers that owned of all other types of Internet-capable mobile phone models (e.g., Motorola RAZR, Verizon Escapade, Nokia 2680 Slide, Nokia 1680 Classic).
Consistent with a key finding from the 2009 research, the 2010 study revealed that while overall mobile bill-pay adoption is increasing, there is room for financial institutions to drive market growth. Of the 20 percent of consumers who reported using their mobile devices to pay bills online within the past 30 days, 62 percent stated they went directly to billers’ websites most often, while 38 percent reported that they went to their financial institution’s website most often.
“The results reiterate that the time is right for financial institutions to expand their online bill presentment, as well as bill payment, solutions,” stated Janet O. Estep, president and CEO, NACHA. “Introducing PC- and mobile-based products that make it easy for consumers to navigate the complete billing cycle is critical to ongoing adoption. Initiatives such as EBIDS, supported via by ACH Network, offer a way to efficiently deliver electronic bills of all kinds to a wide breadth of consumers via online banking.”
What do you think?
Consumers’ use of their Internet-capable mobile phones to access online banking and pay bills online climbed significantly over the past 12 months, according to new research released and jointly sponsored by FIS, NACHA, and eCom Advisors. This research was unveiled at a breakfast press conference this morning at NACHA’s PAYMENTS 2010 Conference at the Washington State Convention Center in Seattle.
“With expanding ownership of Internet-capable smartphones, consumers’ use of their mobile devices to access online banking information, view and pay bills, and make online purchases is becoming much more mainstream. We worked with NACHA and eCom Advisors on this research to better understand the pace of mobile banking adoption and the primary factors that are driving this consumer behavior,” stated Kay Nichols, executive vice president of channel solutions at FIS. FIS is a pioneer in delivering integrated mobile banking and payment solutions that provide end-customers with the convenience and immediacy in accessing their banking information.
The March 2010 survey, completed by 1,236 U.S. consumers who own and use mobile phones, was designed as a repeat of a similar consumer survey fielded by eCom Advisors in March 2009. The 2010 research found that 27 percent of consumers who own an Internet-capable mobile phone had used the device to access their financial institution’s online banking website within the past 30 days, compared to the 2009 result of 22 percent. In addition, 20 percent of consumers who own an Internet-capable mobile phone had used the device within the past 30 days to pay bills through a financial institution or a biller website, a significant increase from last year’s response of 11 percent.
In addition to adoption and use, the 2010 research foundthat consumers’ propensity to use mobile devices to conduct banking functions correlates more to the sophistication of the mobile device rather than the consumer’s age. The percentage of consumers who reported using their Internet-capable mobile phone to conduct online banking transactions within the past 30 days varied significantly by type of device owned:
… 65 percent of consumers who owned the newest touch screen smartphones (e.g., Apple iPhone, BlackBerry Storm, Motorola Droid, Google Nexus);
… 30 percent of consumers who owned other touch screen smartphones (e.g., Motorola Surf, Samsung Impression, LG Dare);
… 27 percent of consumers who owned non-touch screen smartphones with QWERTY keyboards (e.g., BlackBerry Curve, BlackBerry 8800 Series, Samsung Gravity, Palm Treo);
… 9 percent of consumers that owned of all other types of Internet-capable mobile phone models (e.g., Motorola RAZR, Verizon Escapade, Nokia 2680 Slide, Nokia 1680 Classic).
“Some smartphones are clearly smarter than others when it comes to inducing mobile banking and bill pay usage,” stated Fred Brothers, managing partner of eCom Advisors. “Regardless of the consumer’s age, those equipped with iPhones or the newest smartphones with full-sized touch screens are twice as likely to use them for mobile financial services as those who have smartphone devices with smaller screens or keyboards,” said Brothers.
The influence of mobile device sophistication was also apparent in consumers’ bill payment behaviors. The percentage of consumers who reported using their Internet-capable mobile phone to pay bills online through a financial institution or a biller websitewithin the past 30 days varied significantly by type of device owned:
… 40 percent of consumers who owned the newest touch screen smartphones (e.g., Apple iPhone, BlackBerry Storm, Motorola Droid, Google Nexus);
… 16 percent of consumers who owned other touch screen smartphones (e.g., Motorola Surf, Samsung Impression, LG Dare);
… 22 percent of consumers who owned non-touch screen smartphones with QWERTY keyboards (e.g., BlackBerry Curve, BlackBerry 8800 Series, Samsung Gravity, Palm Treo);
… 13 percent of consumers that owned of all other types of Internet-capable mobile phone models (e.g., Motorola RAZR, Verizon Escapade, Nokia 2680 Slide, Nokia 1680 Classic).
Consistent with a key finding from the 2009 research, the 2010 study revealed that while overall mobile bill-pay adoption is increasing, there is room for financial institutions to drive market growth. Of the 20 percent of consumers who reported using their mobile devices to pay bills online within the past 30 days, 62 percent stated they went directly to billers’ websites most often, while 38 percent reported that they went to their financial institution’s website most often.
“The results reiterate that the time is right for financial institutions to expand their online bill presentment, as well as bill payment, solutions,” stated Janet O. Estep, president and CEO, NACHA. “Introducing PC- and mobile-based products that make it easy for consumers to navigate the complete billing cycle is critical to ongoing adoption. Initiatives such as EBIDS, supported via by ACH Network, offer a way to efficiently deliver electronic bills of all kinds to a wide breadth of consumers via online banking.”
What do you think?
TAWPI @ NACHA Payments
Posted by Mark Brousseau
Historically, cash and checks have dominated as the primary means of settlement for person-to-person (P2P) transactions, but that has the potential to change rapidly according to new research released by NACHA and eCom Advisors in partnership with FIS and PayPal. The research was unveiled this morning at a breakfast press conference at NACHA’s PAYMENTS 2010 Conference at the Washington State Convention Center in Seattle.
“Financial institutions and solution providers are increasingly seeking to leverage the ACH Network to enable their retail customers to conduct electronic P2P payments,” stated Janet O. Estep, president and chief executive officer of NACHA—The Electronic Payments Association. “This research adds to our understanding of consumer demand for this payment service.”
The February 2010 survey, completed by 1,180 active online banking consumers in the U.S., was designed to test consumer reaction to two new concepts. The first concept was using a P2P payment service offered within the online bill-payment applications of financial institutions. Nearly half (48 percent) of active online banking consumers are likely to use such a service, according to the research.
The research also investigated consumer interest in several different scenarios for P2P payments offered by financial institutions. Results concluded that:
… 33 percent of consumers are likely to use P2P payments to send money to a son or daughter at college;
… 31 percent are likely use P2P to send money out of the country to a family member, friend, or associate;
… 25 percent are likely to use P2P to split the cost of a gift with co-workers, friends, or family members.
The second concept tested in the research was an ePayment Portal, defined as a service provided by a financial institution allowing consumers to transfer money, pay bills, conduct P2P payments, and track all their money movement from a single place online. Nearly half of consumers (49 percent) expressed interest in the Portal concept. Of this interested population, 70 percent would likely use P2P payment services within the Portal.
Paul McAdam, a Partner at eCom Advisors stated, “We are very encouraged by the results of this research. Nearly half of today’s online banking consumers expressed interest in using a P2P payment service offered by a financial institution, and if the P2P service is integrated with a suite of money movement solutions within the online bill-payment application, consumer interest jumps significantly. This research provides significant evidence of a large pool of pool of likely P2P adopters.”
Another key finding is consumers who have already adopted mobile financial services likely will be the first adopters of financial institutions’ P2P payment solutions. Consumers who used their mobile phones to access their bank account or view or pay a bill within the past 30 days reported a likeliness to use the study’s P2P payment concepts at rates more than two times higher than those reported by the overall sample of active online banking consumers.
“Today’s active mobile banking consumes are clearly attracted to the notion of replacing cash and check transactions with P2P payments via their mobile devices,” stated McAdam. “In addition to targeting marketing communications to encourage this segment to adopt P2P, financial institutions should also integrate P2P payments with their mobile banking services.”
Historically, cash and checks have dominated as the primary means of settlement for person-to-person (P2P) transactions, but that has the potential to change rapidly according to new research released by NACHA and eCom Advisors in partnership with FIS and PayPal. The research was unveiled this morning at a breakfast press conference at NACHA’s PAYMENTS 2010 Conference at the Washington State Convention Center in Seattle.
“Financial institutions and solution providers are increasingly seeking to leverage the ACH Network to enable their retail customers to conduct electronic P2P payments,” stated Janet O. Estep, president and chief executive officer of NACHA—The Electronic Payments Association. “This research adds to our understanding of consumer demand for this payment service.”
The February 2010 survey, completed by 1,180 active online banking consumers in the U.S., was designed to test consumer reaction to two new concepts. The first concept was using a P2P payment service offered within the online bill-payment applications of financial institutions. Nearly half (48 percent) of active online banking consumers are likely to use such a service, according to the research.
The research also investigated consumer interest in several different scenarios for P2P payments offered by financial institutions. Results concluded that:
… 33 percent of consumers are likely to use P2P payments to send money to a son or daughter at college;
… 31 percent are likely use P2P to send money out of the country to a family member, friend, or associate;
… 25 percent are likely to use P2P to split the cost of a gift with co-workers, friends, or family members.
The second concept tested in the research was an ePayment Portal, defined as a service provided by a financial institution allowing consumers to transfer money, pay bills, conduct P2P payments, and track all their money movement from a single place online. Nearly half of consumers (49 percent) expressed interest in the Portal concept. Of this interested population, 70 percent would likely use P2P payment services within the Portal.
Paul McAdam, a Partner at eCom Advisors stated, “We are very encouraged by the results of this research. Nearly half of today’s online banking consumers expressed interest in using a P2P payment service offered by a financial institution, and if the P2P service is integrated with a suite of money movement solutions within the online bill-payment application, consumer interest jumps significantly. This research provides significant evidence of a large pool of pool of likely P2P adopters.”
Another key finding is consumers who have already adopted mobile financial services likely will be the first adopters of financial institutions’ P2P payment solutions. Consumers who used their mobile phones to access their bank account or view or pay a bill within the past 30 days reported a likeliness to use the study’s P2P payment concepts at rates more than two times higher than those reported by the overall sample of active online banking consumers.
“Today’s active mobile banking consumes are clearly attracted to the notion of replacing cash and check transactions with P2P payments via their mobile devices,” stated McAdam. “In addition to targeting marketing communications to encourage this segment to adopt P2P, financial institutions should also integrate P2P payments with their mobile banking services.”
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