opinion

News from NACHA

Well, it was yet another eventful banking conference at which the music and alcohol flowed until 8:30 p.m. This allows the payment professionals the appropriate amount of time for proper sleep in order to be bright eyed at the 7 a.m. breakfast roundtables. It is comforting to know that the people responsible for the processing of trillions of dollars annually in the U.S. are so conscientious!

In the multitude of sessions which I attended, related to risk, fraud, enforcement rules and third-party sender aspects of the payment world, many relevant and interesting points surfaced.

The concept of protecting personal identifiable information (PII) is reaching new heights.

A few key ones are identified below.

Developments in personal identifiable information. The concept of protecting personal identifiable information (PII) is reaching new heights. California used to be on the cutting edge of this topic but there is legislation in Massachusetts, which is now leading the way in the U.S. in defining and protecting PII.

Basically, when you possess a first initial, last name, and an account number of a Massachusetts resident, then you have PII and you become subject to this legislation. I would encourage you to take a closer look at this legislation when you get a chance.

New Lists. Some of you may be familiar with the concept of a terminated merchant file (TMF) or MATCH as this has been active in the credit card world for some time. This initiative impairs the merchant's ability to keep switching from bank to bank when an account is terminated with cause.

NACHA has unveiled a similar structure with its terminated originator database (TOD). Keep in mind that an Originator is NACHA's terminology for a merchant. Banks that terminate the merchant populate this database. Its purpose is to allow other banks to reference this one central database during their underwriting of new merchants to see if this merchant has been an issue in the past and to keep the risk out of the network.

Another list has been introduced called the originator watch list (OWL). This list is basically a suspect list. NACHA states the following: "…Originator watch list identifies originators and third-party senders that meet certain risk criteria, but does not introduce or imply any prohibition on initiating entries for entities listed." Nowhere have they released what defines these "certain risk criteria" but they will become apparent and we will respond to it accordingly.

Everyone is patting themselves on the back in their great success in taking risk out of the NACHA network. The conclusion that has been drawn is … current measures are working so let's do more of the same!

The Risk Management Group at NACHA is preparing a new request for comment. The teasers they were giving us were noncommittal but included reducing the one percent rule down to .75 percent then .5 percent. Their reasoning is that the network as a whole runs at .03 percent so if someone is running at one percent then they are at a rate of 33 times the average. Another enhancement that they would like is to reduce the length of time a merchant has for corrective action. Today it is 60 days, and they are suggesting perhaps 45 or 30 days would be more appropriate. Several years ago when they were suggesting 60 days, people were arguing that a consumer has 60 days to dispute the transaction so 60 days to correct is inadequate. The presenter also relayed that at the merchant level there didn't seem to be any improvement with processing within the existing 60 days so, that being the case, 60 days can easily be reduced and we can get bad merchants out of the network more quickly.

Why is it that no one supports that maybe more than 60 days would be a better number to preserve the volume and give a merchant time to adjust to the circumstance that led to the issue?

The request for comment is in process and is expected to hit the public domain in the next few weeks. There is a group working on providing real data, real experience and real thought regarding the true issues and the results of changes of this nature. The belief is that by providing empirical evidence as to the reality of these changes, the rule makers may postpone and re-evaluate any proposed changes.

NACHA's annual conference yet again provided insights into rule making, regulatory concerns, and opportunities to meet payment professionals from both sides of the spectrum. As I left the conference I reflected how truly amazing it is to me that the banking industry is so focused on the understanding and performance of the rules that they lose sight of the real issues they are trying to solve.

Related:  

Copyright © 2025 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More Articles

opinion

What France's New Law Means for Age Verification Worldwide

When France implemented its Security and Regulation of the Digital Space (SREN) law on April 11, it marked a pivotal moment in the ongoing global debate surrounding online safety and access to adult content.

Corey D. Silverstein ·
opinion

From Tariffs to Trends: Staying Resilient in a Shaky Online Adult Market

Whenever I check in with clients these days, I encounter the same concerns. For many, business has not quite bounced back after the typical post-holiday-season slowdown. Instead, consumers have been holding back due to the economic uncertainty around the Trump administration’s new tariffs and their impact on prices.

Cathy Beardsley ·
opinion

Optimizing Payment Strategies for High Ticket Sales

Payment processing for more expensive items, such as those exceeding $1,000 per order, can create unique challenges. For adult businesses, those challenges are magnified. Increased fraud risk, elevated chargeback ratios and heavier scrutiny from banks and processors are only the beginning.

Jonathan Corona ·
profile

WIA Profile: Lexi Morin

Lexi Morin’s journey into the adult industry began with a Craigslist ad and a leap of faith. In 2011, fresh-faced and ambitious, she was scrolling through job ads on Craigslist when she stumbled upon a listing for an assistant makeup artist.

Women In Adult ·
profile

Still Rocking: The Hun Celebrates 30 Years in the Game

In the ever-changing landscape of adult entertainment, The Hun’s Yellow Pages stands out for its endurance. As one of the internet’s original fixtures, literally nearly as old as the web itself, The Hun has functioned as a living archive for online adult content, quietly maintaining its relevance with an interface that feels more nostalgic than flashy.

Jackie Backman ·
opinion

Digital Desires: AI's Emerging Role in Adult Entertainment

The adult industry has always been ahead of the curve when it comes to embracing new technology. From the early days of dial-up internet and grainy video clips to today’s polished social media platforms and streaming services, our industry has never been afraid to innovate. But now, artificial intelligence (AI) is shaking things up in ways that are exciting but also daunting.

Steve Lightspeed ·
opinion

More Than Money: Why Donating Time Matters for Nonprofits

The adult industry faces constant legal battles, societal stigma and workplace challenges. Fortunately, a number of nonprofit organizations work tirelessly to protect the rights and well-being of adult performers, producers and industry workers. When folks in the industry think about supporting these groups, donating money is naturally the first solution that comes to mind.

Corey D. Silverstein ·
opinion

Consent Guardrails: How to Protect Your Content Platform

The adult industry takes a strong and definite stance against the creation or publication of nonconsensual materials. Adult industry creators, producers, processors, banks and hosts all share a vested interest in ensuring that the recording and publication of sexually explicit content is supported by informed consent.

Lawrence G. Walters ·
opinion

Payment Systems: Facilitator vs. Gateway Explained

Understanding and selecting the right payment platform can be confusing for anyone. Recently, Segpay launched its payment gateway. Since then, we’ve received numerous questions about the difference between a payment facilitator and a payment gateway. Most merchants want to know which type of platform best meets their business needs.

Cathy Beardsley ·
opinion

Reinventing Intimacy: A Look at AI's Implications for Adult Platforms

The adult industry has long revolved around delivering pleasure and entertainment, but now it’s moving into new territory: intimacy, connection and emotional fulfillment. And AI companions are at the forefront of that shift.

Daniel Keating ·
Show More