NACHA Adopts UPIC for Business-to-Business Electronic Payments

The Electronic Payments Association is now using a Universal Payment Identification Code (UPIC) to facilitate electronic business-to-business payments.

NACHA was issued the UPIC by M&T Bank to receive ACH credits for publication purchases, and registrations for conferences, teleseminars and other educational programs. NACHA is the first association to utilize UPIC.

Developed by the Electronic Payments Network (EPN), the ACH business of The Clearing House Payments Company L.L.C., a UPIC is a unique bank account identifier that allows companies to receive electronic payments without divulging their banking information. UPICs are for credit payments only, protecting accounts against unauthorized debits, checks and demand drafts.

“As ‘The Electronic Payments Association’, NACHA always strives for maximum use of electronic payments in our operations, whether it’s 100 percent participation in Direct Deposit, accepting credit cards for selling NACHA’s publications online, or accepting ACH credits from businesses,” said Elliott C. McEntee, President and Chief Executive Officer of NACHA. “Using a UPIC will enable NACHA to better protect our account from unauthorized electronic and paper debits, while still allowing businesses to pay us electronically.”

UPICs are currently used by public and private entities across the U.S. and have been assigned to organizations in technology, telecommunications, medical technologies, real estate, agriculture and public education.

“UPIC will help clients of M&T Bank meet their increasingly important objective of minimizing the potential of fraud,” said Anne Harriott, ACH Product Manager, M&T Bank. “By preventing sensitive account information from being broadly disseminated, UPIC delivers a new measure of security for our customers.”

UPICs are helping remove two of the key barriers identified in the recent research from the Association of Financial Professionals — lack of accurate bank account data for vendors and the reluctance to give out bank account information. An EPN research study found that 38% of large corporations reported unauthorized debits within a six-month period.

“With the vast majority of business payments still being made by paper check, the opportunity for electronic payment growth is significant. UPIC is a tool to securely disclose account information and help companies and financial institutions realize this growth potential,” said Rossana Salaris, Senior Vice President of The Clearing House Payments Company. “We’re pleased with M&T’s and NACHA’s support for UPIC.”

How A UPIC Works
No system changes are needed to accounts payable, accounts receivable or cash management systems to use a UPIC. The UPIC looks and acts like a standard bank account number, and travels through the ACH network with the Universal Routing and Transit number. However, a UPIC can only be used for ACH credit payments. A UPIC cannot be used to electronically debit an organization’s account or create a check or demand draft, thus reducing the risk of unauthorized debits. The UPIC can be printed on invoices, provided on matching gift forms and displayed on the Internet. Account information is kept private.

The UPIC becomes an organization’s permanent electronic payment address. Portability of the UPIC reduces the effort required in changing accounts due to bank mergers or changes in banking relationships, including the cost of communicating new bank account information to trading partners.