SECURE-eBill Starts to See U.S. Merchant and Consumer Adoption

Eight months after rolling out its Internet payment service in the U.S., Ottawa-based MODASolutions says it is seeing results, both in merchant recruitment and in consumer adoption. The company, whose SECURE-eBill product allows consumers to pay e-commerce merchants in the same way they make electronic bill payments, won't disclose transaction volume or how many merchants it is serving but says its client pipeline is filling up. “A whole bunch [of sites] are coming up,” says Marwan Forzley, the former Nokia executive who cofounded MODASolutions in 2001 and serves as its chief executive. “We're in growth mode.” Merchants on the system are seeing increasing adoption, he adds. Tool King, an online seller of drills, saws, and the like, saw 1.5% of sales flow through SECURE-eBill on the first day it went live earlier this month. At Big Al's Online, whose site sells acquarium gear, payments through the system have grown to 6% of sales from 1% last May, Forzley says. The company is now rolling out its service to Big Al's call center and plans to add it to the payment options listed in merchant's print catalog. “We expect further pick-up [in adoption] with the call center,” Forzley says. Merchants generally are running from 2% to 6% of sales through the system, Forzley says, adding he expects the latest, Tool King, to reach the 5%-to-6% range within a few months. The company is also integrating to Tool King's call center. Consumers who want to pay via SECURE-eBill must have an online bill-payment account set up with their banks. According to figures that Forzley cites, some 74 million people in the U.S. use online banking, with 48 million of them paying bills. “We have a pre-enabled consumer base the merchant can tap into,” says Forzley. When the customer is ready to pay, he clicks on the SECURE-eBill icon, reviews his invoice on-screen, and enters only his name and e-mail address. Within minutes, the merchant sends the bill to the consumer, who logs onto to his e-banking site and pays it as he would any other bill, setting up the merchant as a payee. MODASolutions, which is linked to MasterCard International's RPPS backbone network, receives notice of payment and notifies the merchant. Within two days, the merchant receives guaranteed funds and can ship merchandise according to its own policy. MODASolutions' software also integrates to the merchant's back-end system, updating its shipping and accounting servers. With returns, customers deal directly with the merchant, though SECURE-eBill can process refunds. Merchants pay MODASolutions a 1%-to-1.5% fee. Forzley says his product appeals to consumers who are leery of giving out credit card and other information to Web sites. “There's about 30% of consumers who don't want to use a credit card online,” he says. “MODASolutions came up with SECURE-eBill to go after that 30%.” MODASolutions competes with other systems that have emerged recently to give consumers online access to their checking accounts for e-commerce, including an effort underway at NACHA, the rules-setting body of the automated clearing house, that if approved would allow consumers to pay merchants via their online banking services (Digital Transactions News, April 13, 2005).