NACHA Will Soon Unveil Pricing for Its Online Payments Pilot

NACHA-The Electronic Payments Association expects to release pricing details in about two weeks for its long-awaited online-payments pilot, an official working on the project says. The details will set out a form of interchange fee merchants' banks will pay to banks that will authorize transactions and authenticate consumers, as well as switch fees and fees to NACHA, the Herndon, Va.-based rules-setting body for the automated clearing house network. The schedule of fees is a critical element of what is expected to be a 12-to-18-month pilot for Secure Vault Payments, the new name NACHA has given to a project it had been provisionally calling credit push. The pilot will get under way by October, and is expected to start with at least one financial institution, eight to 10 billers, and one or two merchants, says George Throckmorton, senior director for payment solution technology at NACHA. Synovus Financial Corp., a Columbus, Ga.-based holding company for 39 banks, has agreed to participate as an authenticating institution. The participating billers will be Synovus clients, Throckmorton says. Merchants will enter the pilot via sponsoring banks, which NACHA is talking to. Other authenticating banks are expected to join in the first quarter of 2008. The pilot for Secure Vault Payments, which will allow consumers to pay billers and Internet retailers through their banks' online-banking programs, is getting under way a few months later than NACHA originally envisioned a year ago when it began recruiting participants and promoting the project (Digital Transactions News, April 11, 2006). At the time, NACHA projected it would have most participants on board by Aug. 30 and would begin the pilot in early 2007. Although details remain sketchy for now, interchange fees merchant banks will pay for spontaneous purchases on the Web will likely be tied to a percentage of the sale, whereas the pricing to billers will consist of flat fees, NACHA says. Switch fees, which are expected to decline as volume builds, will be collected by eWise Systems and Unisys Corp., the companies operating the network switch. And, for the first time, NACHA itself will collect a fee linked to a specific ACH transaction type. Both the switch and the NACHA fees will be divided between the authenticating and merchant-sponsoring banks, though it's not known yet whether this will be an equal split. Throckmorton says NACHA has also nearly completed another critical element of the project, a set of business rules governing such matters as settlement times and how exception items should be handled. These are separate from existing ACH rules, which also apply. “That's probably very close to 85% to 90% complete,” he says. At the same time, he has held talks with Visa USA regarding the possibility of allowing consumers to tap bank card accounts through Secure Vault Payments. That's a “phase two” idea, Throckmorton says, intended as something that might come into play after the pilot, which will permit only demand-deposit-account access. “I spoke to [Visa] late last year and early this year, but we don't have any solid plans yet for phase two development,” he says. NACHA began developing Secure Vault Payments three years ago following earlier efforts to enable consumers to make ACH payments to online merchants. With Secure Vault Payments, consumers who have reached a merchant's checkout page will transfer to their online-banking program, where they will log in as they normally do. After authenticating, they will be presented with a pre-filled form showing what they have ordered, its cost, their available bank balance, and other transaction details. They then authorize payment and return to the merchant's site. Payments to merchants are guaranteed and settle the next day.