In April 2014, NACHA introduced the Bill Pay Exception Mitigation (BPE) standards to reduce online bill payment exceptions and check volume associated with exceptions. NACHA estimate that these exceptions cost industry nearly $800 million per year. The exceptions are 2-3 times more common for bill payments made through banks/aggregators than for biller direct payments - see figure:

Source & Copyright©2014 - NACHA 

At the launch of the new standard, Kathy Romano, executive director, bill-print, payment and account receivables operations at Verizon commented, “Bill payment exceptions are costly for billers to process, and are bad for customer service. Exceptions typically require manual intervention, creating unnecessary burden and expense for billers. The BPE Mitigation Opt-in Program provides an opportunity to automate the current online bill payment exception process through the Automated Clearing House (ACH) Network, creating cost savings and efficiencies, and enhancing the online bill payment experience for consumers by reducing the potential for late or misapplied payments caused by exceptions.”

How BPE Works 

The BPE Mitigation Opt-in Program provides a standard for billers to manage the exception process using the ACH Network, backed by the NACHA Operating Rules, to eliminate the “drop to check” phenomenon. Instead of sending a check, bill payment originators can use the BPE Mitigation Program to “tag” exceptions through use of a CIE transaction, an ACH payment type that now can include a BPE addenda record  - see figure.

Source & Copyright©2014 - NACHA 

The BPE addenda record is designed to provide billers with additional information about the consumer to help them repair exception payments electronically. Additionally, the BPE Mitigation Opt-in Program will require billers to send a Notification of Change (NOC) to provide the bill payment originator with corrected information so that the original error does not continue for subsequent payments.

NACHA predictsw that participants will benefit from a more efficient system for dealing with exceptions, freeing up time and financial resources.

Seeking participants in the Program

NACHA is currently seeking participants for the BPE Mitigation Opt-in Program. Participating organizations can include billers, biller service providers, financial institutions, payments providers and others. 

There are no announcements on the NACHA web-site as to how many banks, billers and aggregators are currently using the new standards.