New Metavante Software Aims to Ease Banks’ Way into NACHA Pilot

Metavante Corp. on Tuesday announced software that the Milwaukee-based processor and NACHA, the rules-setting organization for the automated clearing house network, say will make it possible for more banks to participate in a new online payment product NACHA plans to start piloting in less than a month. “This [software] is extremely helpful,” says George Throckmorton, senior director for payment solutions at Herndon, Va.-based NACHA. Available as Web-based application-programming interfaces, the new software will allow so-called authorizing banks to connect their online-banking programs to the switch for NACHA's Secure Vault Payments system without any development or integration work of their own beyond system testing. The importance of this move, say Throckmorton and Jeff Lewis, division president for Metavante ePayments Solutions, is that it relieves banks of what was promising to become a major technical headache as well as a barrier to participation in Secure Vault Payments, which NACHA is introducing to allow consumers to pay online merchants and billers through Internet-banking programs. “It takes the development work off the financial institution and puts it on Metavante,” says Throckmorton. Lewis says the product is aimed only at authorizing banks for now, but Metavante is working on a module to handle disputed transactions for Secure Vault Payments and doesn't rule out a module for acquiring banks later on. “It's part of our strategy to grab as much of the payments chain as we can,” Lewis says. “We'll look more [at an acquiring version] as we get into the summer months.” He says the product could be adopted by individual banks but is more likely to be used through any of a number of online-banking service providers Metavante has relationships with, such as Intuit Corp., S1 Corp., and CheckFree Corp. The software is designed to work with any bank, not just those that are Metavante clients. Metavante will charge a per-transaction fee, though Lewis says the fee has not yet been made final. In the Secure Vault Payments system, a consumer who chooses this option to pay at checkout is redirected to a log-in page for her online-banking program. After she authenticates herself, she is presented with a payment page summarizing the details of her purchase or bill payment. If she authorizes the transaction, she is directed back to the merchant's site and the switch instructs the merchant that it has good funds and can ship merchandise. Funds move through the ACH network. Metavante's software, which the company has not branded, will handle the authentication process, back-end settlement, and reconciliation for the authorizing bank. Merchants and billers will be sponsored into the system by acquiring institutions. The program plans to levy an interchange rate of 1.35% on merchant payments and a flat fee of 50 cents on bill payments, payable by acquirers to authorizing banks (Digital Transactions News, Sept. 12). Throckmorton says his target date to go live with the pilot for the Secure Vault Payments is March 31, but adds the first two weeks of April are a more likely start time. The pilot is scheduled to run for 18 months. He says at least three merchants, which he cannot yet name, will be on board on the first day, with billers coming on board later in April. “We have a good pipeline of merchants,” he says. Synovus Financial Corp. has signed on as both an authorizing and acquiring bank. Savings Bank of Maine, which last September changed its name from Gardiner Savings Institution F.S.B., will participate from the start as an acquirer and later on become an authorizing bank as well, Throckmorton says. It should be easier for more banks, especially on the authorizing side, to sign on now that Metavante has introduced its software, Throckmorton says. Lewis adds that an unnamed client institution will go live on the Secure Vault Payments network as an acquirer in April.