Electronic Payments Association NACHA Enters Blockchain Space With BPDA Acquisitionbr>
US electronic payments association NACHA has acquired the Business Payments Directory Association (BPDA) to provide corporate treasury professionals with extended remittance information using blockchain.
NACHA is a nonprofit organization that convenes hundreds of diverse organizations to enhance and enable electronic payments and financial data exchange within the US and across geographies. It manages the development, administration, and governance of the ACH Network, which serves as a network for direct consumer, business, and government payments, and annually facilitates billions of payments such as direct deposit and direct payment.
Established in 2016, BPDA is a nonprofit organization tasked to advance efforts by the Federal Reserve’s Remittance Coalition to create a standardized, market-driven business-to-business (B2B) directory to enhance the payments ecosystem.
Under the deal, the BPDA will become an independent, member-led, self-governed group under the Nacha organization. The partnership will align the efforts with both organizations to facilitate B2B payments through development and deployment of a B2B payments and remittance directory. In August of this year, the BPDA began working with Discover Financial Services on a proof-of-concept (PoC) platform for a B2B payments directory built on blockchain technology. The partnership is aimed at helping support and advance the PoC effort to ensure rapid delivery to the industry.
The blockchain-based B2B payments directory will be structured as a network of credentialed service provider ‘sub-directories’ in which trusted and validated payee information will be stored. Credentialed service providers will allow access to the stored electronic payment information, including ACH payment details and other payment methods. Payers will be able to query the directory to obtain information about a single payee or multiple payees, and payees can manage their information in real time to ensure details are current.
“Historically, B2B payments have been a challenge for the financial services industry,” said Jane Larimer, chief operating officer of NACHA. “Businesses are often consumed with onboarding vendors, obtaining and maintaining accurate payment information and ensuring the proper remittance is included for cash application. As a strategic initiative, NACHA works to enable solutions that will support the easy routing, posting, and application of ACH and other payments, particularly in the B2B environment. Aligning with BPDA will allow us to develop and deliver such a solution, leveraging the recognized work and expertise of BPDA.”