Nacha Selects JPMorgan, Wells Fargo and TeleCheck For 2003 Kevin O'Brien ACH Quality Award; Awards Demonstrate Quality Processing of E-Checks

ORLANDO, Fla. -- Nacha - The Electronic Payments Association has selected JPMorgan Chase ACH, Wells Fargo, and TeleCheck as winners of the 2003 Kevin O'Brien ACH Quality Award in recognition of their successes in implementing quality Automated Clearing House (ACH) processes. 

"This year's award winners are demonstrating that e-check payments can be handled with the same level of quality that ACH users have come to expect," said Mary Ann Francis, Chair of Nacha's ACH Quality Task Force and a Senior Vice President at National City Corporation. "The 2003 ACH Quality Awards embody best practices that can be emulated by others in the industry." 

JPMorgan, the largest originator of ACH payments according to the Nacha Top 50 list, is being recognized as an originating depository financial institution for its processes to improve the accuracy of posting information for the newer e-check transactions. By deploying these processing improvements, JPMorgan, which received ISO 9001:2000 certification in 2002, experiences administrative returns for e-check payments at a rate 30 percent lower than the industry average. 

For its corporate originators, JPMorgan developed a package of processing solutions -- dubbed Pre-emptive Processing Intelligence -- by combining Notification of Change data, a database to identify checks that are ineligible for ARC conversion, and a "file fixer" capability to correct and resubmit administrative returns. This product improves the posting of one-time e-check payments to the correct accounts, minimizes the number of administrative returns, and increases the speed and likelihood of collections. 

Wells Fargo is being recognized as a receiving depository financial institution (RDFI) for its efforts to reduce the number of telephone-initiated e-checks (TEL) that are returned. Wells Fargo's efforts substantially contributed to the 40 percent decline in the rate of TEL returns, and the 60 percent decline in the rate of unauthorized returns, from the third to fourth quarter of 2002. This is the second consecutive year that Wells Fargo has received an ACH Quality Award. 

As a regular business practice, Wells Fargo warehouses all originated, received, and returned ACH transactions online for 90 days in a relational database. The database can be queried to extract ACH return statistics by ACH Standard Entry Class Code, return reason code, Originator, date or range of dates, and other criteria. Because of this capability, Wells Fargo was able to produce data by which companies that originated a disproportionate share of returned TEL items could be identified. 

Nacha is also recognizing First Data's TeleCheck subsidiary as a third- party processor for reducing the rate of administrative returns that merchants experience for e-checks at the point-of-purchase (POP). TeleCheck's overall administrative return rate for POP transactions is significantly below the industry average, and has contributed to the improvement in the industry rate from 0.54 percent in the first quarter of 2001 to 0.25 percent in the fourth quarter of 2002. Fewer administrative returns improve margins on check transactions for merchants, enhance processing accuracy for POP originators and reduce processing costs for RDFIs. 

TeleCheck's improvements include using multi-read and imaging capabilities to reduce mis-reads and substitution errors, routines to validate routing and account numbers, employing rules to identify ineligible items, and using routines for MICR-to-ACH conversion. TeleCheck also runs an operations group to repair administrative returns and work with RDFIs to resolve returns and prevent future occurrences. 

The 2003 Kevin O'Brien ACH Quality Awards are being presented here today at Nacha's PAYMENTS 2003 conference. The recipients' case studies are also published in Nacha's 2003 Electronic Payments Review and Buyers' Guide. 

The Kevin O'Brien ACH Quality Award is presented annually to recognize best practices in ACH participants' efforts to maintain and improve the quality of ACH services and the integrity and reliability of the ACH Network. The award is named for the late Kevin O'Brien, Nacha's Chairman in 1999-2000. 

"As Chairman of Nacha, Kevin O'Brien established the ACH Quality Initiative, the impact of which will be felt in the ACH Network for years," said Elliott C. McEntee, President and Chief Executive Officer of Nacha. 

About Nacha - The Electronic Payments Association 

Nacha is the leading organization in developing electronic solutions to improve the payments system. Nacha represents more than 12,000 financial institutions through direct memberships and a network of regional payments associations, and 650 organizations through its industry councils. Nacha develops operating rules and business practices for the Automated Clearing House (ACH) Network and for electronic payments in the areas of Internet commerce, electronic bill and invoice presentment and payment (EBPP, EIPP), e- checks, financial electronic data interchange (EDI), international payments, and electronic benefits transfer (EBT). Visit Nacha on the Internet at