International ACH Transactions (IAT) can expedite international payments and help eliminate problematical cross-border ACH processes.
With the incorporation of International ACH Transaction (IAT) capability into ACOM’s EZPayManager payment software, users of the solution now have an answer to previously problematical cross-border ACH processes, the delays and security issues inherent to mailing checks, and the high costs of international wire transfers, it was announced today by James R. Scott, general manager of ACOM’s Core Business Division.
The initial implementation facilitates ACH transfers between the United States and Canada, with implementations for other countries to follow as needed. The company also expects to add the capability in its EZPayManager/400 software for the IBM i market in the near future.
Lower Costs and Greater Reliability
“Companies that regularly transact cross-border business will find IAT of significant value,” Scott said. “Postal mail has always been a problem, with delays of several days, and checks exposing organizations to fraud. Conversely, ACH transactions are fast and secure, with payment recipients notified by email when the funds are scheduled to arrive. Companies that typically have relied on wire transfers to complete transactions can now pay as little as 15 cents for an ACH payment versus $25 or more for an electronic fund transfer.”
IAT is an SEC code (standard entry class) that replaces the Corporate Cross-border Payment (CBR) and Consumer Cross-border Payment (PBR) codes that typically have been used for international ACH transactions. Both the Federal Reserve Bank and NACHA rules now require the IAT code and format for ACH payments entering or exiting the U.S.
It was developed in response to Office of Foreign Assets Control requests to align the NACHA Rules with OFAC compliance obligations and to make it easier for Receiving Depository Financial Institutions (RDFIs) to comply with those obligations.
According to Federal Reserve sources, many U.S. financial institutions were receiving international payments that entered the country through correspondent banking relationships and were often difficult to trace or accurately process as international payments. The IAT code supports and promotes the clearing and traceability of these payments.
Channel Partner Impact
Channel Division Vice President Joe Torano noted that ACOM’s value-added resellers (VARs) and partners should find the IAT capability a strong selling point when dealing with clients and prospects engaged in cross-border commerce, since it enhances cash flow management and effectively removes the problem of delayed and/or lost payments, a frequently encountered bottleneck in the conduct of international business.
“Now, our VARs can offer their clients the same high level of payment delivery options to their foreign-based locations and trading partners as they routinely experience domestically,” he said.
Market Trend
According to Scott, the IAT capability is integrated as part of the EZPayManager for Windows ACH suite and can be implemented through ACOM’s Professional Services Group. The Professional Services Group can also provide a field upgrade for companies with EZPayManager already installed.
“Companies using EZPM can still issue checks if they wish to do so,” he said. “But the domestic U.S. market and others are moving to ACH payments and electronic remittance advice for good reasons and now, the same advantages of speed, security and reliability can apply to international ACH as well.”
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