As part of a new business-to-business e-commerce initiative, the New York Clearing House has introduced a payment and settlement systemthat will make ACH transactions and wire transfers easier, and reduce Internet fraud.
Instead of exchanging bank account and routing numbers with their online trading partners, under the new system buyers and sellers establish a Universal Payment Identification Code with NYCH that connects to but hides such confidential payment information. When the trading partners exchange identity codes, the transaction will go to NYCH's database, which translates the codes into bank account numbers.
The new feature also extends the capability of NYCH's current payment systems, Electronic Payments Network, or EPN, and the Clearing House Interbank Payment System, or CHIPS. The clearinghouse project will translate such Web-based languages as XML and HTML into a format compatible with its existing electronic payments network, thereby eliminating much of the paper that still encumbers the electronic marketplace.
NYCH will likely have the new system fully functioning by summer 2002 and plans to eventually extend this service to consumers.
2001 CMP Media LLC. 7/1/01, Issue # 3807, page 12.