The Benefits, Risks and Tech Challenges of Using Automated Clearing House Payments(ACH) for Mobile Payment.
NACHA White Paper Discusses Mobile Payments using ACH:
BENEFITS:
Merchants: The ACH allows cost savings, allows ability to cross sell, incorporate loyalty, and rewards and provide coupons, and allows portability to make convenient payments. It helps smaller merchants that find card payments cost prohibitive.
Consumers: Using ACH for consumers allows avoiding late payments. ACH also helps the under banked with ACH based products.
Corporate Treasury: allows corporate treasury to remain efficient and productive using mobile device and simpler authentication.
Financial institutions: Using ACH for mobile enhances customer appreciation and allows offering various products for mobile payment.
RISK: Protecting data and privacy, by educating customers about mobile security codes, stolen phone procedures, downloading malware, phishing via sms. Application providers must also design security measures for bill payments and purchases at point of sale.
Technology Challenges: Must account for low battery life, network coverage issues, adapting to various payment methods for different platforms.
Small size: difficult to provide disclosures
Rate of technological advances: risk waiting to adopt to a system or move quickly and be outdated.
Mobile Payment Product Risk: The technology not used by intended audience, not adopted by merchants and consumers, not keeping abreast to regulatory developments and risk of poor customer experience. There should be user authentication measures and device authenticated measures before a payment is made. The data used in transit should be safeguarded or able to deleted if the phone is stolen. Mobile device makers should consider double keying of information so it is accurate, providers should send disclosures by email as well as on the screen, understand the challenges of different types of devices for the payment and be aware of updates to systems for security and regulations.
https://www.nacha.org/system/files/resources/NACHA_MobileACH_WP_Final.pdf