Merchant Risk Live Wrap-up: Jordan Bennett on Mitigating Risks For a Safer Transaction Ecosystem

For this week’s Merchant Risk Live hosted by LegitScript, we were joined by Jordan Bennett, Senior Director of Network Risk at Nacha, to discuss the Nacha compliance program and ways to conduct risk assessments to mitigate future risks.

Jordan’s focus is on understanding third-party senders, the benefits they bring, and mitigating risks associated with this business model. He runs the Nacha certified program, which encourages third-party senders to understand their risk management responsibilities in the ACH network and promote strong risk management practices.

Read the key takeaways of our chat after the image, or watch the full video.

laptop and microphone on desk

Key Takeaways


Understanding NACHA and its Role

Nacha is an organization that sets and enforces the rules to which the ACH network must abide. One of the most common misconceptions, Jordan said, is that Nacha is part of a government agency, which it is not. Rather, it’s composed of members from a number of banks and smaller payment associations. Jordan explained that Nacha’s role in the ecosystem looks a little different compared to that of credit card providers like Mastercard or Visa because Nacha lacks access to day-to-day financial transactions.

Nacha’s Evolution

According to Jordan, Nacha’s business model has been around since ACH and was essentially created as a means to govern the payment system that drives direct deposits and direct payments. However, as the payment ecosystem has been evolving so has Nacha. Jordan’s work, for example, offers guidance on what third-party senders should be doing and how they should be managing their risks. He also helps build trust between financial institutions and these third parties. In more recent years Jordan said Nacha seems to be moving toward taking a more holistic approach in terms of overall risk management. 

Enforcing Criteria for a Safer Financial System

Jordan said Nacha strives to “make rules that make sense for the industry and enforce the rules to make sure everyone is playing fairly.” Nacha programs have helped shift the way ACH providers are thinking about their responsibilities to their ecosystems. From a regulatory perspective, it prescribes a minimum standard that compels people to shift and operate in a fair manner. Because Nacha is composed of members, there is no strong hierarchy in place. That means anyone in the industry is welcome to contact banks or reach out to Nacha programs to evaluate or propose new rules to help shape and improve the ecosystem.


Want to join us live?

The Merchant Risk Live is a biweekly virtual event to discuss trends in merchant risk management with guest experts in payments risk and compliance. Some of the topics include creating effective risk rules, making transaction monitoring and content monitoring work together, getting federal regulation updates, and more! If you’re interested in joining the biweekly live event, you can sign up.