May 20, 2019

Alexa Makes Life Easy for Many, But Raises Questions for ACH


Michael W. Kahn

Michael W. Kahn


ORLANDO, Fla.—Alexa, pay the electric bill. 

That’s an increasingly common request—along with the water, gas, and who knows how many other bills. As convenient as it is for consumers, it’s raising new questions for ACH Network participants.

“When someone gives an instruction to Alexa, and those instructions get relayed and an Originator originates payments, what Nacha Rules are going to govern the ACH debit?” said Jeanette Blanco, Nacha Associate General Counsel. “In many cases, new technology comes out and it’s not clear which Rule should apply.”

At a Smarter. Faster. Payments 2019 session on “AI, Alexa, Authorizations & ACH,” Blanco said sometimes you’re “retrofitting” to make new technology work with rules that predate it. 

“I think that’s where we are right now with voice payments,” said Blanco, who’s been asked more than once what SEC code should be used for payments that begin with a request to Alexa, Siri, Cortana or any similar system.

One school of thought is that since it’s a voice payment—someone is speaking it—then perhaps it’s a TEL transaction because it’s an oral authorization. But Blanco said that “doesn’t really fit all that well” because TEL authorization is obtained over the telephone, and the smart speaker isn’t being used as a phone. “The voice really gets relayed over the internet,” said Blanco. 

So maybe the WEB code works? It is, after all, a transaction based on an authorization communicated via the internet or a wireless network. 

“That fits,” said Blanco. “But there’s an exception in there. It says, ‘other than by oral communication.’ So, does that kick it out?”

There’s no perfect answer at the moment, but Blanco’s opinion is that WEB is a better fit than TEL. 

“While we’re focusing on the voice” giving Alexa instructions, she said, the heart of the matter is “how did my consumer customer authorize me to initiate transactions on their behalf? That authorization is generally some online agreement.” 

And while the debit instruction is given by voice, Blanco said to “look a little bit further than that” at how that voice gets to the Originator—which is by internet. 

As Alexa and her friends increase their popularity, Blanco said the payments industry will have a lot to consider—not the least of which is confirming that any instructions come from an authorized person. 

“I think that is really the scary part,” said Blanco. “We’re in a pioneering stage.”