Last week, the National Clearing House (NCHA) announced the availability of a registry for image-survivable check security features. This risk management tool has been designed to combat check fraud and supports the framework developed by the Financial Services Technology Consortium (FSTC).
According to Frank Jaffe, president of MorSecure, a project management and consulting firm involved in the registry initiative, "There are a number of security features with various verification systems behind them. Vendors developed their own ways to do this because there are no standards. People don't really know how to verify [check security features]. The FSTC created an interoperability verification framework that allows simple messages to be used in common for the verification process of checks," Jaffe explains.
The FSTC asked NCHA to create the registry, he says. "They also asked [Accredited Standards Committee] X9 to develop a draft standard for trial use to eventually formalize the standard around the messaging piece" and enable interoperable security feature verification.
Glenn Wheeler, president and CEO of the NCHA, says that this interoperability will be key to the industry's efforts in creating additional fraud controls in the check space. "Check fraud is still a problem," he notes. "Over 30 billion checks are still being written in this country and a lot is going on in the check area with imaging and image share. So through this work, we want to be able to define standards so that regardless of which vendor solution a bank is using, they will still have that interoperability."
The registry is Web based and can be found at www.thencha.com. Vendors are invited to register their security features there after completing a questionnaire. Jaffe says the registry, which is in XML format, can be downloaded and will be updated as needed.
At this point, Wheeler says they are only registering the vendors and validating their security features. "As [X9] finalizes the standards, then we'll allow financial institutions and merchants to sign in and identify those registered vendors and their solutions." There is no set timetable for when X9 will complete its part of the job. However, Wheeler says, "It is on a fast track. It's still early in the process."
In the short time the registry has been available to vendors, response has been rather good, according to Wheeler. "Several vendors have registered; four registered within a couple of days after it became available. The next step is being able to provide the interoperability for the industry. This project is a great example of cooperation between many players in the industry."