Check 21, BOC Come to E-Commerce Via USA ePay-Digital EFT Deal

The payment gateway business may be consolidating, but smaller players are trying to survive by adding services to meet e-commerce merchants' demand for more diversified payment options than simply credit cards. This week, for example, Los Angeles-based USA ePay announced that it is offering Digital EFT Solutions LLC's DEFT Deposit suite of electronic-check products that include the new back-office conversion automated clearing house code and even check acceptance via fax. USA ePay connects about 20,000 mostly card-not-present merchants in a variety of industries to independent sales organizations linked to such major card processors as First Data Corp., Total System Services Inc.'s TSYS Acquiring Solutions, Global Payments Inc., and Chase Paymentech Solutions LLC. Besides card transactions, the USA ePay gateway through its USA eCheck service has allowed merchants to submit checks. That capability has come from an Atlanta company that USA ePay will continue to use, according to Deborah Camm, vice president of sales and marketing at USA ePay. But Digital EFT has a broader menu, she says. “Merchants wanted more services,” says Camm. “They've got more solutions, specifically back-office conversion” as well as Check 21, she says. The DEFT technology facilitates telephone, Web-based, recurring-payment, and point-of-sale ACH transactions as well as the new back-office conversion (BOC) e-check code. It also accommodates non-ACH transactions submitted under Check Clearing Act for the 21st Century (Check 21) rules. Soon to be added are remote deposit capture and even fax-based deposit services, according to USA ePay. For Shippensburg, Pa.-based Digital EFT, the deal means access to a new group of merchants, ISOs, and large processors. Digital EFT uses a suburban New York City processor with links to 15,000 primarily recurring-payment types of merchants such as utilities and apartment-management companies. “We believe that obviously there's a tremendous amount of business online now, and it's growing rapidly,” says Keith Orlean, national sales and marketing director. “We feel USA ePay has a tremendous amount of clients and reseller organizations.” Digital EFT has patent-pending technology that will let merchants submit checks via fax, according to Orlean, who refuses to divulge details. “We are working on a solution,” he says. “We're not going to go live until it's ready.” The USA ePay-Digital EFT partnership comes at a time when payment gateways continue to merge, best exemplified by CyberSource Corp.'s planned $565 million acquisition of Authorize.Net Holdings Inc. (Digital Transactions News, June 18). Consolidation at the top of the industry is forcing companies that want to remain in the gateway business to differentiate themselves with better and more specialized services, experts tell Digital Transactions News' sister publication, Digital Transactions magazine, in its upcoming September cover story.