Direct deposit of payroll through the ACH is one of the great success stories in the electronic payments world, but that success was derailed Dec. 15, 2005, when one of the nation's largest banks had systems problems and was unable to get ACH payment files to the Federal Reserve before the processing window closed. When the payer happens to be Paychex–its core business is making sure employees of thousands of companies get paid on time–that breakdown could be costly.

It was a Friday, so payroll was heavy. On top of that, it was the start of a busy shopping weekend just before Christmas, and the files included many Christmas and yearend bonuses. For some small companies that had all their workers in one location, emergency checks could be cut, explains Frank Fiorille, director of enterprise risk management. But that left thousands of workers with only one way to be paid on time: wire transfers.Wire initiation was a manual, labor-intensive process. Even with extra staff working around the clock, no more than a few hundred could be paid by wire. Maybe it was the caffeine, but the team of troubleshooters from treasury, IT, operations and enterprise risk, working through the night, came up with a notion for producing mass wires.

They scanned a copy of a direct deposit payroll report and fed it into a database they had developed, Fiorille recounts. Routing numbers were verified automatically by running them against a table of valid numbers downloaded from the Fed's Web site. Then a file was created and downloaded into a workstation from which wires could be initiated automatically. All, save a handful of people, were paid that Friday. Paychex avoided a crisis and, in the process, invented a solution that would let one person generate thousands of wires a day.

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