What Meaningful Modernization Means to Alexa and Friends


Michael W. Kahn

Michael W. Kahn


Last May it was standing room only at a Payments 2019 session on how to handle ACH payments that start with a command to Siri, Alexa, or any of the other virtual assistants. Fast forward a year and that’s still very much a hot topic. At 2020’s Smarter Faster Payments: Remote Connect, there was solid progress to report, as a change to the Nacha Operating Rules is being proposed. 

“We wanted to update the Rules to deal with this,” said Jeanette Blanco, Nacha Associate General Counsel. But at the same time, it’s clear that the tech world doesn’t stand still.

“We didn’t want to just add a new SEC Code for virtual assistants,” said Blanco. “We wanted to contemplate that there would be other technological advances, and make the Rules neutral about the exact form of the technology, so that every time there was a new technological advance we didn’t have to go back and add another SEC Code.”

The result is part of a set of Rules proposals and other concepts collectively referred to as “Meaningful Modernization.”

The goal with this part of the Meaningful Modernization process is to “allow the use of oral authorizations more broadly to better allow businesses to adopt ACH payments in transactional settings that make use of the new voice technologies,” said Blanco. 

“The new Rules would expand the SEC Codes where oral authorizations could be used. They also set out requirements for oral authorizations,” said Blanco. She noted that “any oral authorization, regardless of the channel used, must meet those requirements.”

The proposal would allow TEL transactions to still be used the same way they currently are. “But under the new Rules there would be new ways to obtain oral authorizations other than over a telephone,” said Blanco. Both ODFIs and Originators could make use of these new methods but wouldn’t be required to.

Another potential impact, Blanco said, is that, “We may see some volume of existing TEL entries migrate to WEB.” There may also be need for participants to reexamine their risk management practices and consider how they will apply to new types of transactions within SEC codes. 

And while Alexa may retire one day, there will almost certainly be successors. 

“Other technologies are developing that make the use of verbal interactions and voice-related technologies more common,” said Blanco, “and we can expect to see more of those.”

While the comment period has closed you can still visit the Meaningful Modernization page to learn more.