ModaSolutions Corp. has signed its first merchant acquirer to use its eBillMe system for making online purchases through the automated clearing house network.
The Kanata, Ontario, technology provider announced Tuesday that RBS Lynk, the payment processing division of Royal Bank of Scotland Group PLC, will offer the system to merchants.
"It's a significant deal," Marwan Forzley, Moda's president, chief executive, and co-founder, said in an interview. "The integration of eBillMe into the services they have is a way to reach a large number of the merchants they service."
The deal is the first of several that Moda expects to make with merchant acquirers, he said, though he would not say when the next one might be announced.
The eBillMe system is similar to an ACH payment system that Nacha, the electronics payments association, plans to test next year for online purchases, but Mr. Forzley said Moda's system requires no work on the part of banks.
The system lets merchants accept payments through online billing sites by sending customers electronic invoices with instructions for setting up the merchant as a payee. This setup does not require any cooperation from the customers' banks.
"You pay eBillMe the same way you pay your phone bill or your electric bill," Mr. Forzley said. "It leverages what exists."
Moda is not trying to get bankers to change anything about their online bill-payment systems, he said, though he would welcome their assistance in promoting eBillMe. "The banks are important partners for us," he said. There are "joint marketing opportunities between eBillMe, the banks, and some of our merchants."
However, eBillMe's ability to work without bank participation is a stark contrast with what Nacha is doing, Mr. Forzley said.
Last month Nacha said it was planning to test its Secure Vault Payments system, which also would let merchants accept ACH payments for online purchases. Nacha has been touting the concept in various incarnations for several years; in 2005 it discussed plans to test a credit push system, and in 2002 it unveiled a payment initiative called Project Action.
The Secure Vault system requires banks to link their bill-payment systems with merchants' checkout pages. Shoppers then can select Secure Vault as a payment option. Banks will receive a per-transaction fee from the merchants.
George Throckmorton, Nacha's senior director of payments solution technology, said eBillMe has " one unique difference from what Nacha's product is about." With Secure Vault, "we are essentially running that product from the inside out with the financial community."
Moda's system is complementary to Nacha's, Mr. Throckmorton said, and "there is a need in the market" for such systems.
He likened eBillMe to offerings from companies such as eBay Inc.'s PayPal Inc. or Bill Me Later Inc., none of which relies on bank participation. "For us, without banks … we don't have a product."
