New Option for Web Payments

If at first you don’t succeed, try again. That’s the attitude that seems to have been adopted by NACHA – the Electronic Payments Association. The association, which oversees the ACH payment network, has a new proposition for offloading to the ACH at least some of the card payments consumers now make to online merchants.

The program, Secure Vault Payments (SVP), creates a payment link between online merchants and customers by way of online banking platforms at customer financial institutions.

George Throckmorton, a senior director at NACHA, expects a pilot of SVP with a select group of businesses to be in full swing by summer. Merchants will pay interchange, but Throckmorton insists SVP is priced to undercut credit card pricing and will eliminate chargebacks, the principal bane of card acceptance. “It’s the most secure option because the [customer’s] bank does the authentication and authorization,” Throckmorton says.

Some analysts who have examined NACHA’s pricing model say the savings to merchants are modest. At a cost of about 1.52 percent per transaction, “it’s still quite high relative to checks or [other] ACH transactions,” says Adil Moussa, an analyst with Aite Group.

SVP is the latest salvo in NACHA’s push for a piece of the Internet payments pie, which has been dominated by credit cards. A recent report by Javelin Research & Strategy estimates that 30 percent of Americans will be using alternatives to cards for online payments by 2012.