ACHs - Who will buy?

"Don't write off ACHs," said Marion King, CEO of UK ACH VocaLink, which has its advertising plastered all over the exit of the U-bahn station that leads to the Messe Wien convention centre in Austria where the annual Sibos conference is being held.

VocaLink is obviously touting for business, particularly among the banks that are contemplating whether to maintain or outsource their payments processing business and SEPA compliance to a third party like VocaLink. We also understand that it has been seeking non-bank shareholders or investment, as in this climate banks want to see consolidation among domestic ACHs, and have threatened not to continue to invest in them.

VocaLink has also been instrumental in the launch of UK Faster Payments, a technology it is trying to sell to other banks outside the UK, with so we hear, mixed success. After all banks have other things to be worried about (SEPA Direct Debits, the Payment Services Directive, and the credit crunch that just won't go away).

Will Faster Payments be VocaLink's salvation? Well, according to King, even without dedicated marketing, the UK ACH has processed 30 million faster payments. Giving it the hard sell, King says Faster Payments takes away the need for exceptions management, which is a major headache for banks (however, it also adds the need for real-time fraud management, and let's be honest there were some delays in UK banks getting their systems ready for UK Faster Payments.

"Faster payments is a real-time payment mechanism that is 24 x 7 and will support debit card, ATM, Point of Sale, mobile and online banking," said King. "That is VocaLink's vision, however, to get there we will need global standards and interoperability."

Yet, King's pitch failed to convince Paul Inglis, head, payments risk & industry, ANZ Bank, who said no ACH was needed Down Under thank you very much as the banks had bilateral links with multilateral settlement, which worked very nicely, although modifications are likely to be made in response to regulatory demands and customer requests for richer data content and innovation.

John Chaplin, European Payments Advisor for card processing company First Data also gave ACHs the thumbs down saying that card processors already operated sophisticated real-time processing environments and could do ACH processing if they really wanted too.