UNLOCKING THE SECRETS OF ACH ORIGINATION AND PROCESSING

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Unlocking the Secrets of ACH Origination and Processing Kevin Moland, Senior Product Manager David McDaniel, Senior Product Manager

July 10, 2012

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©2011 Jack Henry & Associates, Inc. All Rights Reserved.

Agenda

• Introduction and Welcome • Acquiring ACH Transactions (ACH Client)

– Tailor ACH online services to meet each originator’s needs – Provide a wide array of transaction management tools – Offer unparalleled ACH security options

• Processing ACH Transactions (ACH Manager) – Grow your ACH business without burdening staff – Industry-leading exception processing and research tools – Protect your FI and your customers against risk

• Q & A

©2011 Jack Henry & Associates, Inc. All Rights Reserved.

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ACH Client/RDX – A Combined Solution

Transaction Types

• ACH Client supports: – Direct deposit of payroll, direct billing, and other prearranged

payments/deposits (PPD) – Business-to-business payments and corporate transfers

(CCD, CCD+, CTX*) – Electronically authorized pmts (TEL, WEB) – Check conversion (ARC, BOC, POP, RCK) – International payments (IAT) – Other payment types (ENR, CIE)

Categories

• ACH Client is tailored for each originator by creating categories that act as independent transaction “buckets”

• Additional configuration settings can be controlled by the FI or, if the FI allows it, by the business themselves

• Categories can be created from scratch or copied from existing templates

Categories and User Security

• User authorities are established independently for each category, providing a very flexible security model

©2011 Jack Henry & Associates, Inc. All Rights Reserved.

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The User Experience

• Users don’t have to understand concepts like SEC codes or batches because ACH Client does that work for them!

• Users see only the categories they have authority to use • Users can set their own “home page” within the

application, allowing them to always land on the page where they do most of their work

• ACH Client supports both English and Spanish, including full translation of all screen elements, warning/error messages, reports, help and e-mail alerts

Acquiring Transactions

• ACH Client allows users to produce ACH transactions from any of these sources: – NACHA-formatted ACH files – Fixed-length/delimited files – User-entered templates – Scanned checks conversion – Web service calls through EPS

• Within ACH Client, users can quickly and easily create translation maps for proprietary file formats

• Fixed-length or delimited files may also be used to update user-entered transaction templates

Managing User-Entered Transactions

• Users may create custom list views based on criteria and/or sorting patterns, hide or reorder columns, etc.

• Users can edit transactions one at a time, manage multiple transactions simultaneously, or change selected fields for groups of transactions with a single command

Transaction Scheduling

• Transactions can be: – Reusable templates, with no specific schedule – Scheduled recurring transactions with dates that

automatically advance, but require user approval for each submission

– Standing orders, processed automatically on each scheduled due date

• ACH Client allows creation of simple or complex schedules, allowing multiple calendar options to be condensed into a single schedule

Split Transactions

• Split transactions divide a single payment between two or more target accounts (at the same or different financial institutions) based on: – Percentages, such as: 80% checking, 15% savings, 5%

college fund – Amounts, such as: First $1,500 checking, next $250 savings,

remaining balance to college fund • It’s not uncommon for businesses with the capability to

create their own ACH file to opt to use transaction templates in ACH Client so they can utilize the split transaction function

Exporting Transaction Data

• Users may export transactions into QuickBooks • Users may also create custom export formats so that

they may funnel transaction information to other accounting systems or programs

• Export files may be launched manually, or the system can launch files automatically during key processing steps

• Log information may also be exported so security officers can more effectively review system activity

Alerts

• ACH Client provides a wide variety of FI-facing and business-facing processing and security alerts, which can be event-based or condition-based

Electronic Tax Payments

• ACH Client supports all addenda-based electronic tax payments, including EFTPS and other federal tax payments, state tax payments and local tax payments

• New addenda formats can be created by the Support team for each taxing authority without new programming!

International ACH Transactions

• ACH Client allows origination of inbound and outbound International ACH Transactions (IATs)

• Simplified data entry options reduce key entry to a single page

• ACH Client is used by some of the Fed’s largest IAT producing FIs

• ACH Client provides a robust buffet of security measures

Security Measures

MFA: Adaptive Authentication/Tokens

IP Address Whitelisting

Day/Time Controls

Security Alerts

User Permissions and Limits

Dual Control

Duplicate Detection

Merchant Daily Amount Limits

Transaction Review

ACH Manager

New Recipient Validation

Transaction Monitoring with Anomaly Detection

Processing Alerts

Administration Security Measures

• Multifactor Authentication – ACH Client allows FI users to utilize the

same token solutions as those available for customer/member users

• Dual Control for Profile Changes – ACH Client also offers the ability to require a

second administrator to approve changes in user limits/permissions before they take effect

• Security Alerts – ACH Client provides security alerts that notify

FI users when customer/member users are disabled or removed from the system

MFA: Tokens

Security Alerts (ACH/RDX)

Dual Control

Summary

• ACH Client: – Allows you to tailor your solution to the needs of each

individual originator, simplifying the user experience and providing a variety of channels through which transactions can flow

– Supports a variety of transaction types, providing users with robust transaction management tools

– Offers a wide range of optional security measures so that FIs can choose the appropriate options based on the needs identified in their risk assessment

– Can expand your ACH horizons and help you set your sights on a whole new class of originator!

What is ACH Manager?

Why Use ACH Manager?

• Originator file aggregation • ODFI and RDFI processing • Warehousing of transactions

– Exception processing – File, batch and item reversals

• Risk management – Temporal and operational risk mitigation

• Automation – Eases burden of volume growth

• NACHA Rules compliance

Exception Processing Made Easy

• Strong research tools – Robust search capability – Create returns, NOCs, reversals, etc. – Easy-to-follow audit trail

©2011 Jack Henry & Associates, Inc. All Rights Reserved.

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Highly Configurable Risk Management Tools • Temporal risk tracking

– Tiered originator and originator profiles • Manage risk at both levels • Risk tracking across multiple settlement dates (NACHA rule) • Two-stage debit return risk • Control offset accounts

Risk Management

• Files/batches exceeding set limits: – Stop for review (top image) – Must be approved by authorized personnel – Click icon for clear processing warnings

Risk Management

• Restrictions by company – Limit SEC codes use – Limit item and file amounts: debit and credit

• Originator schedules – Files expected – Files received and processed

Automation

• Load files automatically – Only work exceptions (repair queues)

• Merge files for efficiency/cost reduction – Originator, incoming and output files

• Master Console – Overview at-a-glance – Origination schedule

Master Console

Displays all daily functions including:

• Today’s Activity • Held Batches • Pending Approvals

• Pending Analysis Files • OFAC Matches • Origination Schedule

Compliance

• NACHA Rules compliance – Files validated prior to submission – Configurable processing options – Return ratio report

• Automatic NACHA Rules updates – No upgrades required

• User and system audit capture

Highly Configurable Processing Options

File Validation

Secure Hosted Environment

• Fully-redundant SSAE 16 secure JHA hosted facility – All system updates are applied for you – ProfitStars handles disaster recovery of the system – Communication is secure

• Uses 128 bit SSL (secure sockets layer) • Secure FTP for file delivery • Adaptive authentication with tokens • Locked down by I.P. address

• Robust data and user security

Segregation of Duties

Summary

• Allows financial institutions to manage growth without increasing staff

• State-of-the-art temporal risk tracking protects the FI against default risk

• Eases pain of research and exception processing • Helps keep your financial institution in compliance with

The NACHA Rules

Questions?

For more information contact: sales@profitstars.com