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Research indicates that 24% of respondents lack confidence in their ability to process IATs by NACHA’s deadline. Aite provides insight into the challenges of implementing international ACH transaction (IAT), NACHA’s latest standard entry class code for the US ACH. The report outlines the expected benefits of IAT, along with the level of financial institution & vendor- readiness for it. The report looks into the size & cost of the effort needed from financial institutions. On 3/20/09, NACHA is introducing the international ACH transaction as the latest standard entry class code. IAT will replace the existing cross-border ACH SEC codes (consumer cross-border payment or PBR, & non-consumer cross-border payment or CBR), & comes in direct response to OFAC & anti-money laundering concerns associated with those codes. Unlike the prior codes, IAT will eliminate the need for separate batches of international payments from domestic payments & reduce exception processing & its associated compliance risks. Aite interviewed executives at 24 banks, one CU, 4 leading ACH system providers, & the 2 ACH operators in order to gauge preparedness for IAT. While most respondents are confident of their readiness, 24% worry they may not be able to process IATs by NACHA’s deadline. ‘While IAT is costly & time-consuming for all participants in the ACH network, it will actually prove beneficial to all parties affected,’ says Nancy Atkinson, Aite. ‘The efficiency of the ACH system is based on its batch processing model, & if screening of every transaction were mandated by OFAC, the cost of ACH processing would skyrocket. So, while many ACH participants are feeling harried about making the changes for IAT, the alternative would be much worse.’