A Bank of America executive, Jonathan Wilk, has criticized moves by retailers like Wal-Mart and Safeway to issue payment cards that use customers’ checking account and routing numbers to clear transactions via the ACH network. News site, Digital Transactions, reports Wilk as saying that “the ACH wasn’t well-designed” for card-based payments, given the existing fraud protection and dispute resolution services of credit and debit cards. Merchants are looking to ACH-based debit cards to cut their e-payment costs, but, as Wilk observes, bank-issued credit and debit cards remain a better value proposition for consumers.

If fraud affected a demand-deposit account (DDA) behind an ACH transaction, for instance, consumers would need an entire new DDA account number, whereas a credit or debit card is more easily issued. In other words, bank-issued credit and debit cards offer more protection than ACH-based debit cards, even if merchants are seeking low fees for debit payments. Sixty-five per cent of banks responding to a recent Treasury Strategies survey similarly expressed fears that new payment methods will trigger new methods of fraud, while 42 per cent cited e-payment fraud and potential loss of revenue as significant concerns.

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Interesting story find imho.

With all the Visa happenings of late it looks like ACH Debit could be a good alternative however, givent his news it may not be so good given that 65% companies using this technolgy have high concerns of fraudulent transactions :eek:

Regards,

Lee