Private, Secure, Guaranteed ACH Credits – The Next Generation of Online Payments Samantha Carrier,...
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Transcript of Private, Secure, Guaranteed ACH Credits – The Next Generation of Online Payments Samantha Carrier,...
Private, Secure, Guaranteed ACH Credits – The Next Generation of Online Payments
Samantha Carrier, Director, eCommerce, NACHA
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Agenda Market Demand
The Payment Method Defined
Demos
Stakeholder Benefits
The Pilot Defined
The Role of eWise
Pilot Timeline
Q&A
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Market Drivers Rapid growth of Internet commerce has led to industry challenges.
Security and privacy concerns 50% of US Internet users avoid making purchases online, afraid
financial information may be stolen (CyberSecurity Alliance Research 5/06)
Nearly half of consumers avoid online Bill Pay due to security concerns (comScore Networks, cited in American Banker 4/20/06)
Alternative online payments will account for 26% of eCommerce volume by 2009 (Celent, 5/06)
Continued fraud and chargebacks 6% of good sales lost due to fraud/risk screening (Cardline 2005)
Fraud is the top reason given for chargebacks on several networks (American Banker interviews with network executives, 1/17/06)
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Market Drivers Cont. Businesses want payment options
− 72% of consumers surveyed say the have abandoned an online payment
− 23% of households don’t have a credit card− 45% of households w/in 5% of credit limit
State and Federal Agencies want payment options− High fees with existing payment options− Paper based payments prevalent
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The Private, Secure, Bank-Authenticated Payments Solution
‘Credit Push’ simply refers to using online banking to initiate Internet payments
Consumers keep financial information private – never disclosed to the seller/business
Seller/business receives real-time authorization of guaranteed payment (ACH Credit)
Financial Institution authenticates the buyer, reducing risk, fraud, and charge backs
Relieves seller/business burden to secure/protect consumer financial information
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Demos Consumer Purchases Bill Payments Funds Transfers
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Stakeholder Benefits – State Governments Real-time authorization of a guaranteed
payment (ACH Credit)
Increase use of electronic payments
Reduce costs
FI Authentication - reduces risk and fraud
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Stakeholder Benefits – Consumers
Security and privacy – no financial information shared with the seller/business
Familiar user interface with online banking More payment control and flexibility Consumers are most comfortable sharing
private financial information and account access with their Financial Institution
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Stakeholder Benefit - FIs
Use existing infrastructure - costs to support this channel have increased in the areas of authentication and security (FFIEC Guidance)
Create new potential revenue stream - FIs generate little direct revenue from the online banking channel today
Grow the eCommerce ‘pie’ and enable new online transactions
Take a leadership role in privacy
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NACHA’s Online Payments Pilot
Consumer transactions tested: online bill payments, purchases, account to account funds transfers
Why run a pilot? Evaluate potential markets for new online payment
type w/privacy, security and guaranteed payment features
Evaluate level and structure of fees and impact on adoption
Determine costs, benefits and net economic benefit to all stakeholders
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NACHA’s Online Payments Pilot
Pilot Participants:Buyer’s FI (Guaranteeing ODFI) Seller’s FI (Receiving FI)Businesses (state and federal govt. agencies,
online merchants, billers)Third Party providers (enable FI and business
customers)eWise (pilot network provider)
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Participation Requirements Participation Requirements:
Buyer’s FI (Guaranteeing ODFI) must be FFIEC compliant for online banking
Businesses must be sponsored by a Receiving FI Receiving FI warranties performance of sponsored
businesses Resources necessary for integration work with eWise
Pilot Fees There is no registration fee to join the pilot Interchange and network fees will be collected Fees will vary by transaction type
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About eWise eWise is an international provider of online payment systems and
online banking applications – offices in US, UK and Australia
Patented technology
Customers include major international Fortune 500 banks
Selected as technology provider for NACHA’s POC in January 2005
Successfully completed the POC technical test - meeting or exceeding all success criteria
Will provide the eWise network as the Pilot Processor
eWise network hosted & supported by Unisys Outsourcing
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Pilot Timeline
Recruitment is currently underway
Complete Pilot design by December 2006
Pilot launch in 2007
Pilot run time 12 months
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Next Steps
INTERESTED IN LEARNING MORE ABOUT THIS PAYMENT TYPE AND THE PILOT?
Check out the new Online Payments Pilot Website at paymentspilot.nacha.org
Contact Samantha Carrier at NACHA: [email protected] regarding pilot participation
Contact eWise at [email protected] for technical and implementation information
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Q&A