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Secure Vault Payments will announce a mobile application next month for the U.S. market, a top executive with the online-payments service tells Digital Transactions News. The mobile application, which will work on Apple, Android, and BlackBerry smart-phone systems, will start with a pilot in the fall and be in commercial production by the end of the year, projects Richard Brierley-Jones, executive vice president at eWise Systems USA Inc., the Denver-based technology company that switches transactions for Secure Vault Payments.
The new application will rely on so-called Quick Response (QR) bar codes to interact with user’s handsets. Users will then be able to pay from their checking accounts using SVP, a system that lets consumers pay billers or merchants by authorizing automated clearing house transactions. Once the user has scanned a QR code for SVP displayed on a bill or on a screen, his handset will take him to an authentication page, says Brierley-Jones. This method mimics the existing SVP flow for e-commerce transactions, in which consumers selecting SVP at checkout are directed to a page where they enter their online-banking credentials and then authorize a transaction they want to do with an online merchant.
EWise will provide the app to participating banks, which in turn will offer it to customers, Brierley-Jones says. “It’s early stages, but we believe we can ramp it up quickly,” he says. “The technology is already there, so we can scale exceedingly quickly.” Some banks have already committed to a similar eWise system in the U.K. called Payo, he says. That application will also likely begin operation by the end of the year, he adds.
Bar-code scanning is proving to be an increasingly popular alternative to near-field communication (NFC) for mobile payments, a powerful technology that has been plagued by delays and a scarcity of handsets with NFC chips. Starbucks Coffee Co., for example, recently revealed that its bar-code system, which is available in more than 8,000 outlets and lets customers tap prepaid accounts, has racked up more than 3 million transactions since its launch. The rapid rollout of the system has executives at the coffee chain claiming to be running the largest mobile-payments operation in the country.
The advantage of the codes is that they are already in use by merchants, are already standardized, and are easy to print and display, says Brierley-Jones. “We believe [bar-code scanning] has much broader application today than NFC,” he says. Moreover, he says, QR codes open possibilities for merchants beyond e-commerce. Billers can print them on paper bills they send, and point-of-sale merchants and even sellers looking to hawk their wares on television can use them. “Most POS devices are capable of displaying QR codes,” notes Brierley-Jones, who adds, “How do I embed an NFC chip in a paper bill?”
SVP, which was launched commercially in September by eWise and NACHA, the regulator for the ACH, is now live with 38 financial institutions. The biggest to sign up so far is US Bancorp. The product now has commitments from institutions accounting for some 20 million online-banking users, Brierley-Jones says, a number eWise plans to push to 36 million by year’s end.
EWise, which is also handling marketing for the service, isn’t targeting general e-commerce merchants. Rather, it’s calling on businesses that struggle with a heavy load of check payments, such as colleges, utility companies, government agencies, and non-profits, says Brierley-Jones. “Getting away from checks is a much bigger problem in these verticals,” he says, estimating that checks still account for anywhere from 40% to 70% of transactions. Helping in the effort are gateways and technology companies that have signed on as resellers, he adds.
Because SVP transactions are authorized and authenticated, the service delivers guaranteed funds to merchants and billers, unlike the case with most ACH payments.
