Magazine article American Banker

Nacha Seeks Banks to Test Easier Phone Bill-Paying

Magazine article American Banker

Nacha Seeks Banks to Test Easier Phone Bill-Paying

Article excerpt

As much of the banking industry focuses on Internet bill payments, the National Automated Clearing House Association is developing a new method of paying bills over the phone.

The Herndon, Va., association, which sets operating rules for direct deposits and other paperless payments, is seeking out banks to test simplified telephone bill payment procedures.

Participants would join Chase Manhattan Corp. and Mellon Bank Corp. in a nine-month pilot test, beginning July 1, that would let billers debit checking accounts after the account-holder authorizes payment with a phone call.

Under current Nacha rules, all ACH debits to consumer accounts require a one-time advance authorization in writing.

The Nacha guidelines for the test are particularly suited to latepayment situations, when consumers would want their payments posted as quickly as possible. They could call their billers directly to authorize a single funds transfer simply by giving the biller their checking account number.

The goal is to remove the "up-front hurdle" of written authorization, said Phillip Ahwesh, a first vice president of Mellon Bank, who helped draft the guidelines.

"We are in the payments business," Mr. Ahwesh said, "and we are competing with other payments businesses."

Telephone authorizations would be a convenient alternative to writing and mailing checks and would give consumers a greater sense of control, said Chase vice president Mary O'Toole.

"Consumers have shied away from preauthorized debits via the ACH," she said. …

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