Is this weird? Since September 2009, our incoming IAT activity has been very consistent. In March, our debits quadrupled. Upon review, I noticed that the additional IAT debits from our customers' accounts were all initiated by the same bank, a bank that initiated hardly any prior to March. Several accounts were affected by these low dollar debits. I'd like an explanation, but maybe I'm concerned over nothing. Thoughts?

We've seen the same things and they all appear to be paypal international ACHs. VERY small dollar amounts. Customers haven't questioned anything yet but I agree, strange, with no logical explanation.

Are they *real* IAT's? That is, international ACH transactions using the IAT file format?

No idea????? Our core processor segregates IAT's on a separate report that I review. It lists the foreign country it's from, originator, etc. So yes, I'm guessing their "real" IATs.

PayPal only recently started using the actual IAT file format. Why it took them that long to meet the NACHA standard, I have no idea.

Small dollar amounts through paypal might signal off-shore illegal internet gambling, if these are consumer accounts.

If they are micro-amounts, they could be attempts to sift out invalid account numbers or routing info from compromised data.

I have not read this, so I don't know if it will give you any clues or not, but if you deal with PayPal transactions, you may find it interesting anyway.

https://cms.paypal.com/cms_content/US/en_US/files/developer/PP_ACHPayment_Guide.pdf

Thanks for the link, tring to figure out what a customer is doing with PP can be a nightmare.

Yes, they are real IATs. They range from $0.30 to $200 with 61% of them <= $10 and 77% <= $25. Several different initiator names/addresses, but the same initiating bank.

We've seen them too. Almost all related to Paypal trans. Some amounts less than $5.00. For a while we would be checking with customers to see if they are legit. Nobody came back and said they weren't. All to individuals. We didn't continue to check with the customers as it became labor intensive and we were not finding any issues. Gambling? Not for these peanut amounts and I am not seeing the same purchaser/customer on any frequent basis. Interesting points made here, though.

FWIW Purchase from Ebay are settled through Pay Pal. My wife purchases are frequently below $5.00.

They all seem to be related to PayPal. Interesting that they are just now showing up as IATs after all this time.

Well, as I said, PayPal is only just now beginning to use the IAT format for its transactions.

Another thing to be aware of; through a program called TwitPay, through which, PayPal payments can be initiated from a Twitter account. And, of course, Twitter is available in countries from which we may not accept payments.

We have seen an increase in IATs lately as well - especially the Intl Paypal. We contacted customers in the beginning and they were all legitimate purchases through PayPal. We stopped contacting since we had not found any problems - hopefully it stays that way!

We had never had any IATs show up on our report until March. Then, we starting having one or two a day. I investigated them all and they were all either E-bay or online purchases made using Paypal. The customers were aware of the charges, but unaware they were international.

We receive this notice from WesPay yesterday
May 2, 2011
Expect an Increased Volume of IAT Transactions
PayPal has launched the final phase of their IAT conversion earlier this week and members may begin to see a significant increase in IAT volume. PayPal is now fully converted and all eligible PPD and WEB transactions will now use the IAT format. As an RDFI, remember that all individuals identified in the seven mandatory IAT addenda records must be compared against the OFAC Specially Designated Nationals or "SDN" list.

Our report jumped from 1 or 2 a month to over 50 on the report yesterday. Today is back down to 15.
I have a question about the report. I have always thought if the name is coded a "1" then I needed to do greater due diligence but if it was coded "o" then the gateway operator cleared the name. All the names are coming through with no number so does that mean I nave to research each name each day?

Although you may see reduced risk if the transaction is tagged to indicate that the GO vetted the entry, you are still responsible for OFAC compliance. The NACHA OFAC guidelines for IATs can be found in the 2011 Operating Guidelines, beginning on page OG 16.