Minicaso 1 - From Paper to E-Payments: The Story of Wells Fargo Home Mortgage
Antonio Flores G. MATI A00738122
1. As with many other financial institutions,Wells Fargo Home Mortgage (WFHM) has offered a number of e-payment options to its customers. Describe the options WFHM offered before ARC. Why weren’t these options sufficient to move WFHM’s customersfrom to e-payment?
WFHM was offering the following e-payment options:
• Automatic mortgage payments.
• Online payments.
• Just in time
• EBPP, in which you still receivean statement whose bill can be paid online.
• Wells Fargo Equity Enhanced Program (EEP).
Wells Fargo had good options for its customers to use. However, most of them were few confidentabout using e-payments because of possible privacy intrusions and fraudulent or copied transactions.
2. Using information from the NACHA web site, describe the basic rules underlying arc. Why didthis result in the shift from paper to e-payment for WFHM’s loan customers?
These are the basic Guiding Principles for NACHA and the ACH Network, according to its website(1):
• Governed bydepository financial institutions.
• Provides value to depository financial institutions.
• Universally accessible by depository financial institutions.
• Based on rules,regulations, and standards that apply to all depository financial institutions and participants, and that are aggressively enforced.
• Functions in a batch-processing environment.
• Transactsvalue-dated recurring and spontaneous payments that satisfy business case requirements.
• Employs robust approaches to measure and mitigate risk.
• Accommodates the exchange ofpayment-related information.
• Recognizes the global nature of commerce and electronic payments.
We see that NACHA offers a service based on standards, regulations and rules that is perceived by users...