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January 2021 Executive Summary — COVID-19 Accelerates Payments Modernization

By Mark Dixon, AAP, APRP, NCP posted 01-11-2021 12:57


As we turn the page on another year, there are several trends to keep an eye on. For example, COVID’s continuing impact on payments, and more specifically, the acceleration of payments modernization, continues to drive change in the industry. Our recent 2021 predictions post dives into some of the trends to watch in the coming year.  

To keep an eye on these developments and support member financial institutions in 2021, NEACH has identified six key topics, which fall under the broader category of payments modernization, to focus its efforts on in 2021: COVID’s impact, emerging payments, the new role of operations, faster payments strategy, RTP®, and FedNow(SM).

To that end, NEACH will highlight information about the New England ecosystem, its operational challenges, the future of operations, and more, and look at how to best support member financial institutions in these areas. We are also working on getting out new materials and programs to support members in navigating the acceleration of payments modernization.

We are also refreshing the format of our 2021 executive summaries to include a dashboard that highlights the top news of the month and allows members to go directly to a specific topic, as illustrated below. We hope these changes will add value to our members and enhance their experience.

January 2021 At-A-Glance

This month’s top news includes:

  • COVID’s Impact: 113 million Economic Impact Payments (EIPS) went out by ACH with an effective date of January 4, 2021; fraud continues to climb with COVID-related scams a key contributor.
  • Emerging Payments: OCC issues an interpretive letter that gives banks the ability to “serve as a node on an independent node verification network (INVN) and use INVNs and related stablecoins to conduct permissible banking activities, including authorized payment activities.” Fiserv is working to acquire Ondot; Mastercard has launched a new approach to cross-border payments.
  • New Role of Operations Workgroup: Work efforts dive into the challenges facing operations teams today; white paper and potential research to come.
  • Faster Payments Strategy: Faster payments are quickly becoming a "must-have" service for financial institutions; The Faster Payments Playbook can help.
  • RTP & FedNow: ESL Federal Credit Union joins RTP Network; RTP on-demand training available.


Read on for more details.


The IRS and the US Treasury have confirmed that 113 million Economic Impact Payments (EIPS) by ACH are being processed this week, with an effective date of Monday, January 4, 2021, says Nacha. Under the Nacha Rules, RDFIs must make funds available by 9:00 a.m. (RDFI local time) on January 4. The EIPs by ACH will be identified with a Company Name of "IRS TREAS 310" and a Company Entry Description of "XXTAXEIP2.

The current round of EIPS is part of the $900 billion pandemic relief bill President Donald Trump signed into law December 27, 2020, which also includes enhanced unemployment benefits. After the $2 trillion CARES Act that Congress approved in March, the bill is the second-largest federal stimulus package, reports CNN.

To stay abreast of how COVID-19 impacts payments and financial institutions, visit NEACH’s COVID-19 Information Center.


On a related note, the Federal Bureau of Investigation (FBI), Department of Health and Human Services Office of Inspector General (HHS-OIG), and Centers for Medicare & Medicaid Services (CMS) are warning the public about several emerging fraud schemes related to COVID-19 vaccines, says Rayleen Pirnie, Director of Fraud and Risk for NEACH.

The FBI, HHS-OIG, and CMS have received complaints of scammers using the public's interest in COVID-19 vaccines to obtain personally identifiable information (PII) and money through various schemes, says Pirnie.

NEACH continues to work diligently with law enforcement partners and the private sector to identify cyber threats and fraud in all forms.

Please visit the site to learn more about the reported scams. The NEACH COVID-Information Center also includes information on COVID-related scams. Visit often for updates.

We encourage you to provide this information internally and to your customers/members.


Speaking of fraud, be sure to check out our latest Cyber Watch column in Members Corner (sign-in required). This month, we continue the focus on ransomware. You can read about the continued increase in the number and types of attacks occurring as well as the increased ransom dollar amounts and potential data theft occurring before ransomware encryption.

You will also read about various kinds of ransomware such as REvil, Regret Locker, Maze, Egregor, and Ryuk and what is happening with them in the fraud landscape. Also, there are details about an FBI update on ransomware and a real-life case study of the inner workings of what happened with a ransomware attack. This month's post provides insight into data protection laws, various cyber-attack techniques, delving into the meaning of "threat intelligence," and shares an FBI alert about spoofed government websites.

As always, please feel free to share this information with other colleagues, and we welcome your feedback and comments on this month's Cyber Watch post.

Want to learn more about what is happening in the fraud space? Check out our new Fraud Tip of the Week posting every Thursday, and available in the Daily Digest on Fridays. Are you looking for more Fraud Conversations and resources? Stay tuned! The Members Only Fraud Community is coming soon.



OCC Greenlights Banks to Use Forms of Cryptocurrency

In December, Brian Brooks, acting comptroller of the currency, told CNBC that new crypto regulations are on the way and “to expect “clarity” on cryptocurrency in the next six-to-eight weeks.” Specifically, Brooks said, “The new regulations would help accelerate adoption of crypto by major financial players.”

True to his word, on the first day of the new working calendar year, the OCC has issued groundbreaking cryptocurrency guidance for banks. A “Forbes” article reports:

Today the OCC published Interpretive Letter 1174, which explains banks may use new technologies, including independent node verification networks (INVNs) and stablecoins, to perform bank-permissible functions, such as payment activities. Said simply, a bank may use stablecoins (cryptocurrencies designed to minimize the price volatility) to facilitate payment transactions for customers.

In doing so, a bank may issue stablecoins, exchange stablecoins for fiat currency, as well as validate, store, and record payments transactions by serving as a node on a blockchain (INVN).

With new developments in emerging payments happening almost daily, NEACH has developed a foundational educational resource for its members, “The Building Blocks of Payments,” which addresses cryptocurrency fundamentals in its blockchain session, along with other topics, such as ISO20022, AI and machine learning, and more.

To learn more about this resource or to register for this on-demand training, click here.



Fiserv, Inc., a leading global provider of financial services technology solutions, announced December 16, 2020, that it had signed a definitive agreement to acquire Ondot Systems, Inc., a leading digital experience platform for financial institutions. The transaction will further expand Fiserv's digital capabilities, enhancing its suite of integrated solutions to enable clients of all sizes to deliver frictionless, digital-first, and personalized experiences to their consumers.

With the integration of Ondot, Fiserv will help clients accelerate digital customer acquisition, drive digital commerce, increase card activation and usage, reduce service costs, and engage contextually in moments that matter — all via ready-made solutions for clients, according to the release. For example, cardholders can benefit from instant card issuance and usage and visibility into purchases through enriched transaction information and actionable insights to spend smarter.

The transaction is expected to close in the first quarter of 2021. The financial terms of the transaction were not disclosed.


Mastercard is also on the move, having announced it has teamed up with money transfer company TransferGo. The partnership will allow customers to move money swiftly across borders using a simple but secure process.

“The partnership means that international transfers can be completed from any payment card or bank account with money being sent to Mastercard debit or credit cards,” Techradar. pro reported. "The option makes use of Mastercard Send, which allows secure real-time payment transfers from a wide range of commonly used card, bank, and digital accounts globally.”



The New Role of Operations Workgroup, which met in December 2020, continues to tackle the issues and challenges facing operations today due to COVID-19 and its impact on the payments industry. Jason Ginsberg, leader of the Challenges facing  Operations subgroup, plans for the subgroup to report initial findings to the main workgroup at the end of  January 2021.

To learn more about the December meeting and the topics addressed, read my post, “Next Step on the Journey of the New Role of Operations Workgroup,” on NEACH’s Members Corner website. You will have to log in to read the post.

The group will meet next on January 29, 2021.




In partnership with Glenbrook Partners, the US Faster Payments Council (FPC) announced it recently released results from its 2nd annual Faster Payments Barometer.

As noted in its December 7, 2020 news release:

The 2020 Faster Payments Barometer shows that faster payments are considered a "must-have" for 75% of respondents’ organizations. This is reflected in the results, as 77% of those surveyed either use or enable at least one faster payment method today. And whether or not respondents have faster payments in place now, 74% are planning to implement at least one additional faster payments system within the next two years. 

Surprisingly, the COVID-19 pandemic has not impacted the majority of respondents' plans to implement faster payments with 59% stating it has had no impact. According to the Barometer results, nearly 4 in 5 respondents are either accelerating or maintaining their faster payments implementation plans despite the current pandemic environment. 



With faster payments quickly becoming a "must-have" service for financial institutions, NEACH is pleased to have led the work on the development of The Faster Payments Playbook, and now, we’ve brought an on-demand series, which we plan to debut in the first quarter of 2021.

The Playbook, co-branded with Nacha and the U.S. Faster Payments Council, was created to help financial institutions develop a faster payments strategy by assessing faster payments developments, the benefits and requirements of faster payments, and the process of developing a faster payments strategy.

The Faster Payments Playbook on-demand series, scheduled to launch 2021 Q1, will dive into each of these areas and guide participants through the process of developing a faster payments strategy that supports the overall strategy for their organization.

Visit NEACH’s Innovating Payments site for updates.



ESL Federal Credit Union, a full-service financial institution serving more than 374,000 members and 11,400 businesses, announced December 17, 2020 that it is live on the RTP® network developed by The Clearing House (TCH).

“ESL has joined the RTP network via BNY Mellon, a market leader in helping firms speed their conversion to digital payments solutions,” the release stated. “BNY Mellon is providing the connectivity to the RTP network, while Levvel, a payments technology consulting firm, also has helped ESL prepare its systems to offer real-time payments to its customers.”

RTP and FedNow both made progress in 2020, and we expect to see an acceleration of that progress in 2021.

Knowing that adoption of real-time payments continues to grow, we wanted to provide foundational support for our members to gain line of sight into the RTP infrastructure. Our new educational resources: “Real-Time Education for Real-Time Payments 101” and “RTP: Risk, Rules, and Regulations 201” demystify the network and provide insights into the challenges and opportunities that await.

To register for one or both courses, click here.

Related, NEACH is also working on an RTP implementation guide. Visit NEACH’s Innovating Payments website for news and updates.



Although the world around us continues to change, we face the future with confidence.

Our commitment to you remains unwavering: To act as your strategic partner and help advance your business goals by offering customized training, personalized support, and cutting-edge news and information. For questions, call the Payments hotline at 855-NEACHQA. 

In 2021, as always, NEACH is here for you.