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The benefit for shoppers: “As the consumer, I’m never sharing my private financial data with the seller,” Carrier says. And retailers benefit from the credit push payments, too. “You’re looking at the potential to draw in folks who have been hesitant-or flat out unwilling-to shop online because they don’t want to share that private financial data with anybody other than their financial institution,” Carrier says.
But don’t expect to see widespread acceptance of the ACH payment option in the near future, Schatt says. “ACH is going to take a long time because it’s like herding cats,” he says. “You’ve got so many different constituencies.”
Just how much NACHA decides to charge merchants for using the ACH payment also will play a decisive role in whether it gains widespread acceptance, Schatt says. For the pilot, NACHA plans to set up an interchange fee structure similar to the card industry’s. “The devil really is going to be in the details of how they price this model, but it represents a secure, efficient way to pay for things on the Internet,” he adds.
MODASolutions’ SECURE-eBill is another payment method that uses a consumer’s online bank account. When consumers select the SECURE-eBill payment option at checkout, they are sent an e-mail invoice confirming the purchase. The consumer then pays the invoice from their online bank account, just as they would pay any other bill online.
“The consumer is not giving any personal, financial or sensitive information to the merchant,” says Marway Forzley, president and CEO of MODASolutions. “All you give is your e-mail address.”
SECURE-eBill handles the transaction processing and posts the records to the merchant. Merchants pay a transaction fee from 1% to 5% of a sale for the service. Merchants connect to SECURE-eBill’s system using an application program interface.
“Once they decide to deploy SECURE-eBill, we set them up on the biller network so their payee information is available to the banks; so any consumer who does online banking is able to use eBill to pay the merchant,” Forzley says.
I’ve got to be me
To add yet another layer of security, some online payment options use biometrics technology. That’s the case with Pay By Touch Inc., which last month released TrueMe, an Internet version of its biometric authentication service that uses a customer’s fingerprint to verify identity. By sliding a finger on a TrueMe-certified finger sensor, a user can securely access his web-based accounts with no need for IDs, passwords or account numbers.
Consumers can sign up for TrueMe at participating merchant or financial institution sites. “They do this once and any site that’s enabled for TrueMe would be able to activate the user,” says Jon Siegal, executive vice president at Pay By Touch. During checkout, TrueMe provides the merchant any information needed to complete the transaction, including billing, shipping and payment information. “We’re securely storing all that information on behalf of the user and the fingerprint makes it available to the merchant site,” he says.
Whether as high-tech as biometrics or as simple as bundling information together to be securely accessed by name and password, alternative payments are expected to account for an increasingly larger volume of online transactions. Schatt estimates that less than 50% of e-commerce volume will come from credit cards by 2009.
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