A Universal Payment Identification Code (UPIC) is an identifier (or banking address) for a bank account in the United States used to receive electronic credit payments. A UPIC acts exactly like a US bank account number and protects sensitive banking information. The actual bank account number, including the bank’s ABA routing transit number, are masked by the UPIC. Only credit transactions to an account can be initiated with a UPIC. All direct debits are blocked, which should mitigate unauthorized transactions to an account.
Other benefits of UPICs include:
- UPICs mask confidential banking information, reducing the risk of fraud while facilitating secure electronic payments.
- UPICs are restricted to credit payments, preventing unauthorized debits.
- UPICs remain with the customer regardless of banking relationships, making any change of bank or account transparent to trading partners.
- UPICs point to a single bank account. However, one account can have several UPICs
Concerns with UPIC include:
- UPICs only work for NACHA’s Automated Clearing House (ACH) credit transactions. Fedwire credits cannot use UPICs.
- A bank must use the Electronic Payments Network for ACH processing to issue UPICs.
UPIC is developed and marketed by the Electronic Payments Network.
Ofer Abarbanel is a 25 year securities lending broker and expert who has advised many Israeli regulators, among them the Israel Tax Authority, with respect to stock loans, repurchase agreements and credit derivatives. Founder of TBIL.co STATX Fund.