Nacha, the electronic payments association, is poised to begin testing the Secure Vault Payments system, which uses the automated clearing house network for online purchases, and Metavante Technologies Inc. has agreed to process transactions for the system.
Jeff Lewis, the president of Metavante's e-payments solutions division, said Tuesday that the Milwaukee processor has almost finished installing the technology at one banking company and expects to begin testing transactions in a few weeks between that company and some of the merchants that have acquiring relationships with it.
The system is expected to offer online merchants a low-cost alternative to credit and debit cards.
Mr. Lewis would not identify the banking company, but Nacha has said Synovus Financial Corp. of Columbus, Ga., would be the first to test Secure Vault.
A Synovus spokesman did not respond Tuesday to questions.
Nacha has said that Wells Fargo & Co. of San Francisco and Savings Bank of Maine, in Gardiner, also will participate in the upcoming test; both participated in a 2005 proof-of-concept test. The Herndon, Va., trade group has been promoting the idea of using ACH payments for e-commerce since 2001, but the concept has been slow to take off.
Mr. Lewis said the Secure Vault approach offers benefits to all the parties in the transaction. For example, consumers do not have to reveal their card information to merchants; the system connects to a shopper's online banking service, where the shopper can initiate an ACH credit, much like online bill payment services.
In a departure from other ACH systems, Secure Vault requires the merchant to pay an authorization fee to the originating depository financial institution.
The fees will be lower than the conventional card-not-present interchange rates, and the transaction is guaranteed, because Secure Vault uses a "good funds" model, in which it validates that the funds are available before executing the transaction, Mr. Lewis said.
Metavante will offer to process Secure Vault payments for any financial company, he said.
The Mentor, Ohio, online payment specialist CardinalCommerce Corp. already is promoting the Secure Vault option to the 30,000 online merchants that use its Cardinal Centinel platform for authenticated payments.
Matt McDowell, Cardinal's vice president of merchant services, said the Metavante announcement provides reassurance to merchants that Secure Vault will be widely available to their customers.
Cardinal will install the technology in merchants' payment systems, and he said "we have three or four merchants that are lined up to turn it on," in the next few months.
