NACHA Acquires the Business Payments Directory Association To Bolster B2B Payments Services

NACHA reported Monday that it has acquired the non-profit Business Payments Directory Association, a move that deepens the presence of the U.S. automated clearing house network’s governing body in business-to-business payments and provides an entrée into blockchain-based payments.

Herndon, Va.-based NACHA said the BPDA will operate as a self-governed group within the NACHA organization. The Roseville, Minn.-based BPDA was formed in 2016 to develop a database, or what it calls a public phone book, of business payees and payee information. The database allows payers to find the information needed to make payments to their payees electronically.

In August, the BPDA began working with Discover Financial Services on a proof-of-concept platform for a B2B payments directory built on blockchain technology.

“Historically, B2B payments have been a challenge for the financial-services industry,” Jane Larimer, NACHA’s chief operating officer, said in a news release. “Businesses are often consumed with onboarding vendors, obtaining and maintaining accurate payment information, and ensuring the proper remittance is included for cash application. As a strategic initiative, NACHA works to enable solutions that will support the easy routing, posting, and application of ACH and other payments, particularly in the B2B environment. Aligning with BPDA will allow us to develop and deliver such a solution, leveraging the recognized work and expertise of BPDA.”

NACHA said so-called credentialed service providers will allow access to the stored electronic payment information, including ACH payment details and other payment methods. Payers will be able to query the directory to obtain information about a single payee or multiple payees, and payees can manage their information in real time to ensure details are current.

In addition to the test of blockchain and so-called distributed ledger technologies, NACHA said the directory will make use of open-source technologies and standardized application programming interfaces developed by the member-led organization Afinis Interoperability Standards, formerly the API Standardization Industry Group.

“BPDA was formed to bring to market the B2B directory,” BPDA chairman Lawrence Buettner said in the release. “And by combining resources with NACHA, today we are even closer to making this a reality.”

Terms of the BPDA acquisition were not disclosed. The deal marks the second time this year that NACHA has brought an outside body under its wings to enhance the ACH. In March, NACHA said Interactive Financial eXchange Forum Inc. (IFX) would become part of its organization, but remain self-governed. Founded in 1997, the Wakefield, Mass.-based IFX Forum is an international non-profit that developed the IFX business message specification as an open, interoperable for standard for exchanging financial data. The organizations said that by combining, they could align their separate priorities for developing APIs for use in the financial industry.