You Say Acquirer, I Say ODFI

I’ve been learning the details of Visa disputes processes and Visa Resolve Online (VROL); interesting stuff.  What strikes me each time I learn a new payment exceptions and returns workflow is just how similar they all are.  In many ways this is expected.  For example, NACHA and ECCHO built our ACH network from the old Electronic Check Presentment (ECP) systems, so it shouldn’t surprise us that it’s very “check-like,” complete with cash letters, batches, MICR data, overnight clearing, and very similar data interchange formats: ECP, ACH, X9.37, and X9.100-187.

But the Visa network didn’t have this legacy, so I’m surprised to find just how very conceptually similar it is to the check/image and ACH world.  Sometimes it looks like only the names were changed to protect the guilty.

So here’s my brief thesarus to translate Visa-speak to ACH-speak and check-speak:

Issuer = RDFI = Paying Bank

Acquirer = ODFI = Collecting Bank = (usually) BOFD

With these translations in hand, you can simply relabel the boxes in those issuer disputes and acquirer disputes diagrams and workflows, and you have classic check and ACH exceptions processes.  Voila!   Just relabel some screens and web pages and you can use a check or ACH system for Visa, right?

If only it were that simple.  There are clear technology and interface differences that keep the twain apart, yet consolidating these payment types is still very doable.  Perhaps the bigger issues are the organizational ones.  There have always been walls between the check/image, ACH, wire, and card departments, and those staffing/people issues are often the toughest to overcome.  But as payment trends continue to shift, clearly we’ll see more of that.

BTW, my little simplification assumes debit pull transactions.  That’s all check and card have, but ACH has credit push transactions, and these can be disputed and returned.  Do credit push exceptions/returns mean you change the workflow, or simply post and settle differently?  I’ve only done debit pulls, so I don’t know yet.

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