Imburse partners with Sapiens to provide access to the global payments ecosystem

Imburse, a cloud-based payment middleware, are pleased to announce their strategic partnership with Sapiens International Corporation, a leading global provider of software solutions for the insurance industry to enable Sapiens’ customers to easily connect with any payment provider or technology of their choice, for both collections and pay-outs.

The partnership provides numerous benefits, including complete payment coverage and accessibility for collections and pay-outs in any market, enablement of multi-tenant architecture, and cost reductions in integrating with payment providers and technologies. Sapiens’ customers are now able to benefit from Imburse’s middleware solution through their Sapiens tooling. 

“Getting payments right is vital for the customer experience as well as business efficiencies. It is the one capability that creates a significant amount of costs and resource drain for insurers. Sapiens deliver a low-code platform for enabling insurers to digitise and improve their customer experience. At Imburse, we simplify how insurers deploy payment capabilities for collections and payouts. The combined capabilities of Sapiens and Imburse will enable insurers to connect to the global payments ecosystem through one single connection giving customers more choice in how they pay and receive claim payouts.” said Oliver Werneyer, Co-founder and CEO of Imburse.

Sapiens International Corporation empowers the financial sector, with a focus on insurance, to transform and become digital, innovative, and agile. Backed by 40 years of industry expertise, Sapiens offers a complete insurance platform, with pre-integrated, low-code solutions and a cloud-first approach that accelerates customers’ digital transformation.

“With over 40 years’ experience in the software market, Sapiens understands the benefit of staying relevant and evolving to suit the needs of partners and customers,” said Roni Al-Dor, Sapiens president and CEO. “Our extensive knowledge of the insurance industry, as well as our deep relationships with insurers around the globe and ground-breaking insurtech providers, has positioned Sapiens to help drive innovation and benefit our clients.”

About Imburse

Imburse is a cloud-based middleware connecting large enterprises to the payments ecosystem, regardless of their existing IT infrastructure. Through a single connection to Imburse, enterprises can collect or pay-out using a variety of payment technologies and providers around the globe.

In a world where consumers’ payment preferences and technologies are ever-evolving, Imburse works with insurers to future-proof their payment requirements. Regardless of the business area, market, or requirements, Imburse will connect you to your choice of technology and provider. For more information, please visit https://imbursepayments.com/

Media Contact

Imburse

Beth Molloy – Account Executive, ClearStory International

beth@clearstoryinternational.com

About Sapiens

Sapiens International Corporation (NASDAQ and TASE: SPNS) empowers the financial sector, with a focus on insurance, to transform and become digital, innovative, and agile. Backed by more than 40 years of industry expertise, Sapiens offers a complete insurance platform, with pre-integrated, low-code solutions and a cloud-first approach that accelerates customers’ digital transformation. Serving over 600 customers in 30 countries, Sapiens offers insurers across property and casualty, workers compensation and life markets the most comprehensive set of solutions, from core to complementary, including Reinsurance, Financial & Compliance, Data & Analytics, Digital, and Decision Management.  For more information visit www.sapiens.com or follow us on LinkedIn.

Media Contact

Shay Assaraf

Chief of Marketing, Sapiens

Shay.assaraf@sapiens.com

The most popular payment methods for Insurance in Europe by country 

While various payment methods are popular worldwide, payment method preferences and solutions vary widely depending on various factors. In Europe alone, multiple solutions apply only to a specific country. Knowing your customers’ exact payment preferences is vital to reducing drop-offs at the checkout stage, which applies to any industry. For instance, insurance premiums, unlike eCommerce purchases, are mostly paid out through several installments, rather than a one-off transaction. Offering methods that enable recurring payments, such as direct debits and credit cards, may contribute to a better customer experience and a more efficient collection operation for insurers.  

There are many demographic factors to take into consideration when choosing which payment methods to offer, including age, gender, and class. The insurers’ target customers will have an effect on payment methods too. For instance, millennials and gen z are likely to be more tech-savvy and to choose less mainstream payment methods. In this report, we focus on the variety of payment solutions across specific European countries and how they differ from each other.     

Advantages of offering country-specific payment options at checkout  

ECommerce has boomed drastically over the last few years, and it has been shaping customer expectations for all the other sectors. As increasingly more consumers turn to digital to make purchases, ecommerce has seen the greatest advancements and innovations of all times. From AI-powered personalisation to single-click checkouts, consumers are offered the simplest and most seamless buying experiences, particularly at checkout. The challenge, however, is that customers now expect this quick and straightforward payment service for any product they buy online, including their insurance policies.     

Despite the advancements of eCommerce, the average checkout drop-off rate for desktop users is still at 69.75%, and Baymard Institute estimates that $260 billion could be recoverable by providing better checkout experiences. In a recent survey, 9% of the respondents mentioned the lack of payment method variety as their main reason for dropping off at checkout. Other causes include high extra fees, the requirement to create an account, and the unreliability of the website regarding safety.  

This applies to insurance too, as customers want to be able to pay for their products quickly, efficiently, and using their preferred payment method. Being able to convert that 9% of people who dropped off into real customers poses a serious profit opportunity that can’t be disregarded. It starts with knowing what your customers want and offering the payment methods that are specific to them and to where they are based.  

Imburse is a cloud-based payment middleware offering connectivity to the entire payments ecosystem. Once connected to Imburse, enterprises can easily integrate with any payment provider or technology, in any market, for both collections and payouts, gaining the flexibility to adapt to different markets and unique customers’ needs. Our data team developed a thorough report that covers some of the most popular payment solutions across various European countries. This report highlights the variety of solutions available, as well as the importance of meeting customers’ specific needs at checkout.  

Payment methods in Europe  

Debit or credit cards are the most popular payment method in Europe, with Western and Central Europeans using this payment methods for 45% of their online purchases. Bank transfer is the second most popular payment method, used for 25% of all online purchases in Europe. E-wallets coming in as the third preferred option of Europeans, followed by cash and other less known payment methods (Ppro report). 

Payment methods in the UK 

50% of the UK population prefers using credit and debit cards to make purchases online, with some of the most popular card networks being Visa, Mastercard, and American Express. Digital wallets such as ApplePay, GooglePay, Amazon Pay, and PayPal come in second as the choice of 28% of UK consumers.  

8% of UK residents prefer using cash through payment methods such as Paysafecard, and PaysafeCash. Another 8% prefer other payment methods, including Boku and Zip, as well as Buy Now Pay Later solutions like ClearPay, that enable them to pay in installments and spread the costs throughout a designated period. Bank transfers are actually the preference of only 5% of UK residents, making them one of the least popular payment methods in the UK.  

When it comes to financial recurring payments, Direct Debit is the preferred method of 74% of UK residents. 30% of all recurring payments are financial and include mortgages, insurance, loans, pensions, and investments (GoCardless report).   

Imburse offers over 60% of payment coverage in the UK and over 80% of insurance-specific coverage. Once connected to us, you can connect with most payment providers and technologies, both international and UK-specific, and offer your customers the payment variety they are looking for.  

Payment methods in Portugal 

Credit and debit card payments such as Visa and Mastercard are the most popular payment method in Portugal, preferred by 44% of Portuguese consumers. Digital wallets take second place as the preferred payment choice of 26% of Portuguese. These wallets include the well-known Apple Pay and Google Pay, but also country-specific solutions such as MB Way.  

Imburse has over 60% payment coverage in the Portuguese market and over 80% insurance-specific coverage. By connecting to us, you can easily access most of the payment providers and technologies available in Portugal and offer your Portuguese customers the payment methods of their choice.  

Payment methods in Spain 

Similar to Portugal, Spain’s preferred payment method is debit or credit card, chosen by 47% of Spanish consumers. This is followed by digital wallets such as bizum and CaixaBank, both Spain-based solutions. Bank Transfers take third place and are preferred by 16% of Spanish consumers. Some of Spain’s most popular technologies for bank transfers include BBVA, Safety Pay, Sabadell, and iberCaja.  

Other popular payment methods in Spain include cash, chosen by 8% of Spain residents, and other solutions such as Oney, Mobiamo, and ClearPay. Imburse provides over 60% of payment coverage for the Spanish market and over 80% of insurance-specific coverage.  

Payment methods in Switzerland 

Contrary to Portugal and Spain, a bank transfer is actually the most popular payment method in Switzerland. 53% of Swiss consumers prefer bank transfers to pay for products and services. The technologies used for these transfers vary widely, some of the most popular ones being SEPA, Powerpay, Availabil, and Trustly. This is followed by 24% of the Swiss population opting for credit or debit cards such as Visa, Mastercard, and Myone. Digital wallets come in third place, chosen by 20% of Swiss consumers. Aside from ApplePay, GooglePay, and PayPal, there are other equally popular digital wallets such as Twint and Skrill.  

Imburse covers over 30% of all the Swiss payment providers and technologies and over 50% of the insurance-specific payment market. Our solution also enables you to add or change providers easily and quickly to adapt to customers’ ever-changing needs.  

Payment methods in Germany 

Bank transfer is Germany’s most popular payment method, with 49% of German residents preferring it over other methods. The technologies used include SEPA, Giropay, Paydirekt, Sofort, Paymorrow, Laterpay, and Klarna, so there is a mix of international and Germany-specific bank transfer technologies.  

Digital wallets such as Bluecode, Skrill, and Zimpler are chosen by 28% of German consumers, followed by credit and debit cards, preferred by 11% of German consumers. Other solutions and cash come in fourth and fifth place, respectively. Imburse offers coverage for over 30% of payment providers and technologies in Germany and over 50% of insurance-specific payment coverage.   

Offer country-specific payment methods with Imburse.  

Ensuring that your customers have their payment needs met should be of utmost priority to any business. Unlike in other sectors, insurers need to focus on premium collections and claims payouts or claims reimbursements. They need to deliver a great payment experience on both occasions to ensure customer satisfaction. However, connecting to multiple payment providers and technologies is nothing short of a hassle, mainly when insurers are reliant on traditional IT systems incompatible with modern technologies.  

Imburse is a cloud-based middleware connecting large enterprises to the payments ecosystem, regardless of their existing IT infrastructure. Through a single connection to Imburse, enterprises can collect or pay out using various payment technologies and providers around the globe. 

In a world where consumers’ payment preferences and technologies are ever-evolving, Imburse works with insurers to future-proof their payment requirements. Regardless of the business area, market, or needs, Imburse will connect you to your choice of technology and provider. 

Reach out to our team below should you want to discuss how Imburse can help you. Our team is happy to show you what our platform can do for your business and offer you a free demo. 

Why payment tracking is essential

It isn’t uncommon to receive tracking details for orders we make online. Much like any product delivery or important mail, payments can also be tracked. In this article, we discuss what is payment tracking and the importance of keeping track of your payment records.

What is payment tracking?

In the same way that you receive real-time updates from delivery firms, such as for a product you just bought online or for important mail, payment tracking provides you with real-time updates on the progress of your payment. You can see information such as the route your payment took, any routing bank fees or deductions, when the payment reached your recipient’s bank, and when it was credited to your recipient’s account. You may also be able to see the name, address, and SWIFT code of the bank that handled your payment.

A Payment Tracking System tracks and manages payments for various vendors through a web-based application. It consolidates payment requests and delivers all payment information in real-time. This allows companies to gain visibility over their Accounts Payable (AP) and Accounts Receivable.

How to track an online payment

Nowadays, most banks offer the possibility to track bank transfers via their apps, enabling customers to check the status of their payment at any time and to see added fees. However, tracking each payment manually is a cumbersome task that is far from reasonable, especially for large companies that collect and pay out money to thousands of customers on a daily basis. Manual bookkeeping doesn’t work anymore and is also prone to human error. That is why there are several tools and platforms that companies can use to automate their bookkeeping while still ensuring they can get a full view of their cash flow.   

Insurers, for instance, use Direct Debit frequently to collect premiums. In order to keep track of every payment, they need to ensure they have a robust and digital mandate management tool that enables them to have all records on file, without the hassle of having to store physical contracts. They can also automate payments and check the status of the payment in real-time. Imburse offers a mandate management tool that manages all the components of your Direct Debit collections. This includes also unified reporting across all sources. You can learn more about mandate management services and how Imburse can help in our previous article. Also make sure to check our use case on Direct Debits.

Benefits of payment tracking for businesses

There are several benefits to keeping track of your payments. We compiled some of them below:

Cash flow management

Payment tracking enables you to keep a close eye on your financials over a fiscal year, which is essential to better manage your cash flow. The more visibility you have over your expenses, the more accurately you can predict how much money you will have and decide on what to do with that money. A key factor for businesses to thrive is to be able to have a positive cash flow, so monitoring it closely can help you to avoid surprises and enable you to make better business decisions.

Improved forecasting

Because you get greater visibility over your financials, this means you have a clearer idea of how much money you actually have and can calculate your expenses and revenue more accurately. Knowing your numbers is crucial, even to estimate the value of the company and to be able to plan ahead when it comes to investing money in new tools or products. It will also enable you to easily allocate the money you have available into different teams and activities.

Doing your taxes

As you will have complete records of your payments (both collections and payouts), when the time comes to file your taxes, it will be much easier to collect information. You will also be able to more easily separate the non-deductible expenses from tax-deductible expenses, facilitating the job of your accounting team. You should keep a record of every single payment made to or by your customers, as well as other vendors and partners you work with. Unified reporting enables you to do just that. No matter how many payment providers you are connected with, you are able to condense that information into a single platform. Learn more about unified transaction reporting here.

Unpredicted expenses and reimbursements  

Recording expenses and knowing how much financial power you have enables you to allocate money to other tasks comfortably. It is crucial that you have enough money to cover for unpredicted expenses that wouldn’t usually be a part of your payment records, as well as enough money to give bonuses or reimburse employees for work expenses.

About Imburse

Imburse is a cloud-based middleware connecting large enterprises to the payments ecosystem, regardless of their existing IT infrastructure. Through a single connection to Imburse, enterprises can collect or pay out using various payment technologies and providers around the globe.

In a world where consumers’ payment preferences and technologies are ever-evolving, Imburse works with insurers to future-proof their payment requirements. Regardless of the business area, market, or needs, Imburse will connect you to your choice of technology and provider.

Reach out to our team below should you want to discuss how Imburse can help you. Our team is happy to show you what our platform can do for your business and offer you a free demo.

What is embedded insurance?

Embedded insurance is a relatively new term that is transforming the insurance industry and shows no signs of slowing down. In fact, according to an InsTech London report, the embedded insurance market is expected to grow to $722bn in GWP by 2030. This article will dive into this industry phenomenon and explain the benefits it can bring to customers and insurers.

What is embedded insurance?

Embedded insurance is offering insurance services alongside other products that customers are purchasing. Think about, for instance, buying a car. Customers can purchase their vehicle and car insurance simultaneously as a bundled deal with embedded insurance. Buying insurance services stops being an ad-hoc task, as it is provided as a native feature included in the website/platform that customers buy their products from. 

With more customers turning digital to buy products, e-commerce has boomed drastically, and other industries were forced to meet customers there. Embedded insurance provides the customers with the convenience they are looking for, as it fits seamlessly in their online customer journeys. Embedded insurance is offering insurance services alongside other products that customers are purchasing.

Aside from the e-commerce boom, customers’ lifestyles have changed significantly over the past few years. There are fewer people buying cars, for instance, and more people renting e-scooters. Embedded insurance is an opportunity for insurers to reap the benefits of these lifestyle changes and adapt to their customers’ needs.

Examples of embedded insurance

There are many examples and use cases for embedded insurance, particularly in the mobility products arena. Aside from purchasing or renting a car, which we mentioned above, you can also:

  • buy travel insurance when purchasing flights
  • get Host Guarantee insurance when using home rentals platforms
  • opt for add-in insurance on your new mobile phone
  • add insurance protection to your new home appliances online

Most of these use cases fall into the P&C space.

Payment Service Providers are responsible for authorising a payment

Benefits of embedded insurance

Embedded insurance brings a significant number of advantages to both customers and insurers. Let’s explore how it can benefit both:

Benefits for customers

For customers, embedded insurance means they can get their insurance policies when it matters the most to them and the products that matter the most to them. Easy access to insurance at the time of purchase means that customers don’t have to look for insurance afterward and get more personalized and affordable deals. It is a two-for-one packaged offer that is more convenient for them.

There is an industry-wide emphasis on personalisation and its benefits in improving customer satisfaction, reaching new customers, and retaining existing ones. Embedded insurance is a part of this journey towards more personalised products, services, and customer experiences. It offers customers an end-to-end, frictionless experience that is likely to make them more satisfied with their customer journey and more willing to purchase insurance services.

As the saying goes, “Insurance is sold, not bought.” Buying insurance products can often be a cumbersome task that many will avoid, either due to complex customer journeys or simply because they think insurance isn’t necessary. Embedded insurance helps close the protection gap between customers and their products.

Benefits for insurers

For insurers, embedded insurance means reaching more customers while having lower-cost distribution and low acquisition costs. While the social media era makes it easier for insurers to know where their customers are, what they are seeing, and what they are interested in, it also comes with its downfalls.

Due to very high competition and high customer demands, getting customers’ attention and engagement is a challenging task. Embedded insurance helps insurers get their products and services to their customers in a much simpler and more effective way when they need it the most.

Insurers can also access more data that can be used to improve existing products, reduce underwriting risks, and explore new revenue streams. Most importantly, embedded insurance is here to stay, so failing to adopt it may make it increasingly difficult for insurers to remain relevant. However, reaping the benefits of embedded insurance isn’t as easy as it may seem.

Challenges of adopting embedded insurance and how to overcome them

The most significant barrier to adopting embedded insurance lies with the reliance on decades-old technology stacks. Large insurers that have been around for a long time still entirely rely on their traditional IT infrastructure, which hasn’t been changed or updated. Embedded insurance is a newer phenomenon that requires new and advanced technology. However, insurers struggle to connect to new technologies, as these integrations are highly complex, lengthy, and expensive. Aside from that, they require a lot of resources and expertise.

Embedded insurance’s biggest challenge is an excellent opportunity for collaboration with third parties that offer innovative solutions. For instance, in the payments space, insurers benefit from having a solution like Imburse to connect to the payments world and optimize their payments system. This digital transformation would be incredibly lengthy and costly without a third party. It is also essential to trust the subject matter experts and receive as much guidance as possible for insurers to make sure they make the right business decisions, as these can make or break the success of any product.  

About Imburse

Imburse is a cloud-based middleware connecting large enterprises to the payments ecosystem, regardless of their existing IT infrastructure. Through a single connection to Imburse, enterprises can collect or pay out using various payment technologies and providers around the globe.

In a world where consumers’ payment preferences and technologies are ever-evolving, Imburse works with insurers to future-proof their payment requirements. Regardless of the business area, market, or needs, Imburse will connect you to your choice of technology and provider.

Reach out to our team below should you want to discuss how Imburse can help you. Our team is happy to show you what our platform can do for your business and offer you a free demo.

What are card-on-file transactions?

Card-on-file transactions are up there among the fastest and most convenient payment types. Customers want speed above all else, and nothing says speed more than the simple press of a button. Card-on-file transactions are adaptable to any industry and work particularly well with subscription-based businesses such as insurance, streaming services, or utility services. This article explores card-on-file transactions, how they work, and their benefits and disadvantages.

What are card-on-file transactions?

Card-on-file transactions are transactions where the cardholder’s details don’t have to be introduced. The cardholder needs to authorise the merchant to store their card details for future purchases. Once payment details are stored, every purchase from then on can be initiated simply by clicking a button. In the case of recurring payments, the card details are held, and the price automatically leaves the customer’s account on a set date.

Card-on-file transactions are prevalent in subscription-based services such as video and music streaming platforms. These services already contain all the payment information they need from the customer and are allowed by the customer to charge their card on a set basis. But card-on-file transactions are becoming increasingly popular in many other business models. E-commerce, for instance, is an industry that experienced exponential growth and that is helping shape other sectors too. Marketplaces like Amazon or eBay enable customers to purchase products using the card details already stored on the platform.  

Millennials are more likely to use online payments.

Advantages of card-on-file transactions

The main advantage we see is the speed and convenience of transactions for customers. Offering customers a fast and frictionless payment experience with one-click checkouts gives businesses the upper hand in retaining them and making them loyal to the brand. When competition is sky-high and new innovative players are frequently coming up, this is fundamental to nail. The less work the customer has to do, the better.

Enterprises can also leverage the latest technology to ensure data protection and payment security with card-on-file transactions. Technologies such as tokenisation and encryption are prevalent for card-on-file transactions, and it’s easy to see how they are relevant.

Disadvantages of card-on-file transactions

When it comes to the disadvantages of using card-on-file, one of the most significant risks of card-on-file transactions is safely storing this payment data. This can easily be a concern for customers, as they may not be aware of the security tools used to protect their data. However, aside from the potential reluctance from customers, these transactions are as safe as any other payment method.

Customers also do need to update their card details should they lose their card or should the card expire. This is an added task to the simplicity of card-on-file payments and a distinguishing factor between card-on-file and digital wallets. Customers don’t have to worry about updating their payment details with digital wallets, even when their card expires. These details are updated automatically, and the digital wallet is ready to use at any time, giving customers more flexibility and assurance. Because customers need to update their details on their accounts, card-on-file has a more significant risk of customer churn due to lost, stolen, or expired cards.

Payment networks regulations for card-on-file transactions

Card networks often issue their own set of regulations to protect customer data. These apply primarily to how merchants handle and manage stored payment credentials. While each payment network’s rules may be slightly different, there are some general terms that all of them include. These are:

  • Merchants must obtain consent from the cardholder before storing any payment details
  • Merchants must disclose precisely how the cardholder’s payment details are stored and when they will be used
  • Merchants must notify cardholders whenever there are any changes to the terms of use
  • Merchants must use specific data indicators to identify transactions made using stored payment data
Payment references are important for companies to match the payment with the customer account.

Card-on-file EMV payment tokenization

We have mentioned security as a concern for card-on-file transactions, and statistics back it up. In the UK, in 2020 only, the value of annual losses from CNP fraud reached £452.6 million (Statista report). This is a worrying figure that has been increasing over the past two decades. To prevent fraud and help protect customers’ card data, merchants can use various security technologies such as 3D Secure and Tokenisation. While these technologies are vital, they also can’t affect the user experience and the seamless journey customers expect.  

EMV payment tokenisation ensures that fraudsters can’t access the data stored in merchants’ databases. It replaces the customers’ primary account number (PAN) with a unique token. Even if fraudsters can get into the transaction flow, these tokenised numbers aren’t unreadable. This type of security tool enhances data protection while still ensuring that customers get a frictionless experience. You can read more about card tokenisation in our previous article or access a complete guide to payment tokenisation here.

While card-on-file transactions come with their risks, they are a very convenient way for merchants to process transactions,  and they are also heavily regulated. When storing and managing cardholders ‘ details, it is essential to keep in mind both the payment networks’ set of regulations and the international standards for payments, such as the PCI DSS, as meeting these standards ensures your customers’ protection.

Imburse can deliver a fully Level 1 PCI compliant solution while offering a truly payment provider agnostic ecosystem and highly customizable user interfaces and journeys. Imburse is PCI Level 1 compliant, delivering a suite of services and features that suit the enterprise’s broad needs.

About Imburse

Imburse is a cloud-based middleware connecting large enterprises to the payments ecosystem, regardless of their existing IT infrastructure. Through a single connection to Imburse, enterprises can collect or pay out using various payment technologies and providers around the globe.

In a world where consumers’ payment preferences and technologies are ever-evolving, Imburse works with insurers to future-proof their payment requirements. Regardless of the business area, market, or needs, Imburse will connect you to your choice of technology and provider.

Reach out to our team below should you want to discuss how Imburse can help you. Our team is happy to show you what our platform can do for your business and offer you a free demo.

What is Nacha? Guide to the ACH network

Being one of two leading national payment networks in the US, the ACH network processed over 426.3 million payments in 2021, which are valued at $2 trillion. If you accept or make ACH payments, you should know NACHA, its requirements, and how it influences the ACH payment network. This article tells you all you need to know about NACHA, including its operating rules and how they may affect you.

What is Nacha?

Nacha, short for National Automated Clearing House Association, is a not-for-profit organisation that manages the administration, development, and governance of the ACH network. The ACH network, divided into the two US national operators, The Clearing House and FedACH, is the American system for transferring funds between banks. While The Clearing House deals with private banks and accounts, the FedACH deals with government entities and accounts.

It was founded in 1974 and represents close to 11,000 financial institutions in the US that also fund the organisation. Some of NACHA’s tasks include:

  • Providing clear guidance for member banks and ACH network participants, taking into account federal regulations
  • Enforcing those rules to its member banks and network participants
  • Developing the ACH system and its adoption across the US
  • Providing education to its members, participants, and the general public, in the shape of events, documentation, and reports
payment gateway

What are NACHA’s operating rules?

NACHA provides unequivocal guidance for its members and participants. You can find a whole website section on the rules NACHA enforces on their website. These rules are based on pressing topics within the industry, including fraud detection and higher security, audit requirements, speeding up payments for a better customer experience, and improving the network quality. Participants that must follow this rule include payment processing partners, merchants, and even individuals that use the ACH network to process payments.

In 2021, NACHA developed a new rule to prevent payment fraud. This rule dictates that any business that sends ACH debits must include account validation. That means companies must ensure the account numbers they provide are valid and that the bank account is open and connected to the ACH network. More rules may be enforced regularly, and you can check all of these here.  

What are NACHA’s requirements?

NACHA’s requirements have the primary purpose of protecting customers’ information and preventing fraudulent payments and cyber-attacks. Ultimately, this results in more seamless operations and higher payment success rates. The list of requirements that NACHA imposes on its participants and members is long and detailed so we will go over some of its most relevant sections:

Ensure security when transmitting and storing sensitive data

All payment data must be encrypted and sent through secure web forms or emails such as Microsoft Office 365 Message Encryption. Merchants need to ensure that their Payment Service Providers have the proper encryption tools and standards to comply with this NACHA rule, as any unencrypted sensitive information is prohibited.

Validation of Routing Numbers

NACHA requires participants and members to validate their customers’ routing numbers before accepting transactions. This rule applies to the first-time use of routing numbers or routing number changes. Already verified accounts don’t need to be validated again. As we mentioned before, this rule was imposed in 2021 and aimed to strengthen the security around validating accounts and preventing fraud. There is no specific method that businesses must follow to ensure this, as long as they have a detailed process plan that covers routing numbers.

Customer verification

KYC or Know Your Customer is an already well-known term representing a set of rules any company that deals with money must follow. One of KYC’s requirements is the performance of CDD or Customer Due Diligence, which essentially means ensuring that the customers’ details are legitimate. This can be done by matching bank account details with official documents such as a passport or driving license or requesting customers to take a selfie (facial recognition) to ensure they are the same person as they say they are. Customer verification is also one of NACHA’s rules, and companies can use third-party solutions to ensure they meet the standards.

chargebacks are initiated by customers who request a transaction cancellation.

Security policies

NACHA requirements also include having a clear set of policies that cover all payment methods you take. If you are already PCI-compliant (check the full PCI compliance checklist here), your company certainly has this documentation already. However, if you take or accept ACH payments, include all the relevant regulations and procedures for ACH payments.

About Imburse

Imburse is a cloud-based middleware connecting large enterprises to the payments ecosystem, regardless of their existing IT infrastructure. Through a single connection to Imburse, enterprises can collect or pay out using a variety of payment technologies and providers around the globe.

In a world where consumers’ payment preferences and technologies are ever-evolving, Imburse works with insurers to future-proof their payment requirements. Regardless of the business area, market, or requirements, Imburse will connect you to your choice of technology and provider.

Reach out to our team below should you want to discuss how Imburse can help you. Our team is happy to show you what our platform can do for your business and offer you a free demo.