Nacha’s WEB Debit Account Validation Rule Takes Effect

The nonprofit Nacha, which enables Automated Clearing House (ACH) payments, announced that the WEB Debit Account Validation Rule took effect on Friday (March 19), according to a press release.

However, Nacha said it would not enforce the rule until March 19, 2022 for “covered entities that are working in good faith toward compliance, but that require additional time to implement solutions,” according to the release, which noted that the organization urges every covered entity to quickly work toward compliance.

Initially, Nacha members green-lighted the rule in November 2018 to take effect on Jan. 1, 2020. But “the Nacha Board of Directors approved an extension in effective date to allow for additional time, education and guidance to be provided to the industry,” the press release stated.

In a previous interview with PYMNTS, Kimber Johnson, executive vice president of strategic alliances at GIACT, said that account validation is becoming more and more important in an era where commerce is speeding up and increasingly moving to the web.

At a high level, the modifications to Nacha’s WEB Debit Account Validation Rule require that account verification is a part of anti-fraud initiatives. The new regulation comes as Nacha has reported that ACH payments have become more and more popular — perhaps not a surprise, as more transactions and commerce move online.

In the first six months of last year, for instance, Nacha has said its network volume attained 13 billion payments, marked in part by a 37 percent surge in same-day ACH payments, as measured year over year in the second quarter.

As to why the account validation rule is especially timely, Johnson said, “Nacha’s goal with this change is to clean up the ACH system. So they are looking beyond just the typical financial institutions that are originating these ACH transactions, and they extended the rule to apply to those entities that are actually originating the ACH transactions.”