NACHA, the Electronics Payments Association, announced the launch of a new opt-in program on Monday designed to mitigate the increasing volume of business bill payment exceptions originated to billers through online banking channels.
The Bill Payment Exception Mitigation Opt-in Program’s goal is to improve the reliability of online banking bill payment channels, reduce costs and checks issue in association with bill payment exceptions, and improve overall efficiencies for billers and bill payment originators.
A NACHA study found that the industry is hit by approximately $800 million per year in bill payment exception costs.
“Bill payment exceptions are costly for billers to process, and are bad for customer service,” Kathy Romano, the executive director of bill-print, payment and account receivables operations at Verizon, said. “Exceptions typically require manual intervention, creating unnecessary burden and expense for billers. The BPE Mitigation Opt-in Program provides an opportunity to automate the current online bill payment exception process through the Automated Clearing House Network, creating cost savings and efficiencies, and enhancing the online bill payment experience for consumers by reducing the potential for late or misapplied payments caused by exceptions.”
The goal of the BPE Mitigation Opt-in Program is to provide a standard for billers to manage the exception process and eliminate the “drop to check” phenomenon, which occurs when an error on a consumer bill payment causes a check to be converted to paper and sent through the mail to a biller.
Instead of sending a check, such exceptions are tagged in the program through a transaction that adds a BPE addenda record designed to provide billers with additional information about the consumer to help repair the exception.
“The BPE Mitigation Opt-In Program serves as a holistic solution to address the growing problem of bill payment exceptions,” Robert Unger, the senior director of e-billing and payments at NACHA, said. “It’s an opportunity to utilize the ACH Network in an innovative way, capitalizing on its flexibility and ability to move payments and information. By standardizing the online bill payment exception process, the BPE Mitigation Opt-In Program has the potential to make a significant impact on reducing exceptions.”