UCC Article 4A-202 covering the ISSUE AND ACCEPTANCE OF PAYMENT ORDERS states:
"A 'Security Procedure' means a procedure established by the agreement of a customer and a receiving bank for the purpose of verifying that a payment order or communication is that of the customer".
It further states that "A Security Procedure may require the use of algorithms or similar security devices."
In that the UCC has determined that an "authorized specimen signature" does not constitute a security procedure, many banks are investing in LHA TelexTester for validating wire payment instructions for Private Banking customers.
Existing users are upgrading their system to accommodate this feature.
Call Back verification can be tedious, expensive and time consuming.
Using Relationship Managers or Administrative Assistants to track down ordering customers may represent poor utilization of valuable resources.
Several banks are now using TelexTester Lite, a multi-user version of TelexTester, to quickly and easily confirm Payment Orders received via Fax, e-mail or Telex.
Using TelexTester Lite you create an unlimited number of restricted system disks containing pre-loaded tables.
These are distributed (and only enabled using a separate fixed number and restricted password) to your Branch Offices as well as Private Banking and Corporate Customers.
Payment instructions received at your offices will include a testkey code with each message allowing secure authenticated messages to and from the host client.
Some TelexTester customers include the Beneficiary Name and Amount as part of the encryption code, enabling further security for both electronic payments and checks in transit.