JP Morgan collaborates with Nacha for the authentication of ACH and blockchain accounts
In a significant move to improve the pre-validation process of bank accounts for U.S. payments using the Automated Clearing House (ACH) network, Kinexys Liink and Phixius by Nacha have formed a partnership.
Kinexys Liink is a payment solution that helps businesses and financial institutions verify and validate bank account information before initiating ACH transactions. By pre-validating accounts, it reduces the risk of payment failures, returned transactions, and fraud, which can otherwise lead to delays, added costs, and regulatory compliance issues.
Phixius by Nacha, on the other hand, is a platform that facilitates secure sharing and validation of payment-related data within the ACH ecosystem. It enables participants to exchange authenticated, standardized information about payees and their bank accounts, supporting accurate and compliant ACH payments.
The partnership between Kinexys Liink and Phixius by Nacha enhances the pre-validation process in several ways:
- Leveraging Phixius’s secure data-sharing network to access verified bank account and payee information.
- Using Kinexys Liink’s technology to perform real-time verification of bank accounts before ACH payment initiation.
- Reducing the risk of payment returns and fraud by validating account status, ownership, and eligibility for ACH transactions.
- Improving operational efficiency and payment success rates by eliminating invalid or inaccurate bank account data upfront.
- Supporting compliance with Nacha operating rules and other regulatory requirements related to payment validation.
The National Automated Clearing House Association (Nacha) manages the ACH payment network, one of the primary payment rails in the United States. The original aim of the permissioned blockchain data sharing network, Kinexys, was to address compliance queries, especially across borders.
This partnership between Kinexys Liink and Phixius by Nacha marks a significant step forward in streamlining and strengthening the verification of bank accounts in the U.S. ACH payment ecosystem, thereby making ACH payments more reliable, secure, and efficient for all participants.
Rob Unger, Managing Director of ACH Network Development at Nacha, has made a statement about the benefits of the validation services provided by this partnership. He emphasized the importance of accurate and timely bank account validation in the fast-paced world of digital payments.
In addition to its bank account validation service, Kinexys offers other services such as bond issuance and intraday repurchase agreements (repo). The highest profile Kinexys offering is Digital Payments, previously known as JPM Coin. Kinexys also supports tokenized collateral.
It's been almost eight years since JP Morgan launched Liink, which was originally called the Interbank Information Network. Phixius users can now use Liink to validate global bank accounts, and Kinexys Liink will become one of the validation solutions offered by Phixius by Nacha. Kinexys Liink will also use Phixius for its US account validation.
As more payments become instant and global, ensuring the payment recipient is the correct one has become a global requirement. This partnership between Kinexys Liink and Phixius by Nacha is set to play a significant role in meeting this requirement for U.S. ACH payments.
- The partnership between Kinexys Liink and Phixius by Nacha will utilize the technology from both platforms to provide insights into the finance industry, allowing for the secure and efficient validation of global bank accounts, aiming to reduce risks and improve operational efficiency in the rapidly evolving world of digital payments.
- The collaboration between Kinexys Liink and Phixius by Nacha signifies a milestone in the adoption of advanced technology, especially blockchain, within the finance industry. This partnership will offer industry participants engagement with cutting-edge insights and solutions for secure and reliable ACH payments, supporting compliance and addressing global demands in the realm of instant and global transactions.
