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Secure Vault Payments, which lets consumers spend at online merchants without disclosing their bank account details, is expanding into more financial institutions through a deal with the vendor Jwaala.
August 17 -
Secure Vault Payments, the alternative payment system that lets consumers make online purchases directly from their bank accounts, may gain new prominence from a test it is running with a sizable client.
March 4
People who are building their family trees often turn to FamilySearch — one of the world's largest genealogical sites — to locate records on ancestors and family histories. The non profit organization, which is run by the Church of Jesus Christ of Latter-day Saints but says it relies on donations, is also serving as a blueprint for an emerging way to quickly receive payments from patrons.
U.S. Bank implemented and began testing a NACHA-run online payment system called Secure Vault Payments with FamilySearch in late 2010. The service, which appears as a button on FamilySearch's
"It has the potential to become a major form of payment that can be used by a lot of these organizations, which are looking for a way to streamline collections," says Eric Lim, a senior product manager at the $330 billion-asset U.S. Bank.
FamilySearch patrons who use Secure Vault are redirected to their own participating institution's online banking platform to confirm their balance and select the account they wish to use for payment, then back to the FamilySearch's website to receive confirmation of the payment.
The Salt Lake City-based based FamilySearch has existed for more than one hundred years and offers online access to genealogical records in more 4,600 family history centers in more than 100 countries, drawing data from census figures, war records, libraries, birth data and other repositories.
B. Edgel Blackham, merchant services program manager for the global card services group, finance and records department for the Church of Jesus Christ of Latter-day Saints, says the online donation program officially started only a couple of weeks ago, and it's too soon to have specific numbers on donations or an increase in donors. But he did report a notable anecdotal increase in donor interest since the "giveback" link went live on the group's website. FamilySearch's other donation options include credit card and PayPal options. "We survive on donations," Blackham said. "We don't sell products, our services are all voluntary."
FamilySearch began testing Secure Vault this spring and made some IT adjustments before the formal launch a couple of weeks ago. Blackham says more changes may be made, including putting the giveback link in a more prominent place on the website (it's current location is at the bottom of each page), which Blackham says will be weighed against group's wish to avoid coming across as pushing too hard for donations.
When processing donations via Secure Vault, financial institutions authenticate the payer and provide FamilySearch with fast authorization. Minneapolis-based U.S. Bank, which is the first top-ten bank to offer Secure Vault, is sponsoring FamilySearch International into the Secure Vault network, a role similar to that of a merchant acquiring bank. The SVP network has about three dozen financial institution members and lets banks and credit unions generate revenue from non-card payments while leveraging existing banking infrastructure.
"The bank authorizes the transaction. We keep the customer's account information. At no point during the course of the transaction does the merchant have the account information," says Lim.
Blackham says the reduced security exposure is particularly attractive to the Church. He wouldn't discuss fee structure, but says Security Vault transactions cost less. Part of that is security savings, since Secure Vault takes FamilySearch out of PCI audit scope, though the organization still faces PCI audits because it also takes credit card donations. Online donations in general are relatively new for the group. "The lower [processing and security costs] means more of the donation goes to FamilySearch," Blackham said.
NACHA, the electronic payments network, developed Secure Vault as part of an effort to reduce paper checks and increase use of the ACH network. The technology that is used to transfer users between the biller's site and the financial institution's site is provided by eWise, a Denver-based online payment provider.
Secure Vault deployment mostly involves existing financial institutional interfaces and is typically smaller than a mid-sized project. For banks that are clients of FIS, Jack Henry and Harland — firms that offer Secure Vault and have integrated it into their own systems — the implementation effort at the bank level is involves a contract addendum and training to support operations.
Secure Vault, which is designed to compete with PayPal, card networks and other firms such as eBillme, is also designed to address consumer fears over online payment security. Research from Javelin found that seven percent of consumers have still never made an online purchase, and another seven percent hadn't made one in the previous year — 21 percent of those consumers said they were
"[The Secure Vault model] can make the consumer more secure in knowing they have been redirected to their bank to make that payment," says Adil Moussa, a senior analyst at Aite Group.
Lim says U.S. Bank is also looking to enter into similar partnerships with other charitable organizations. U.S. bank has also deployed Secure Vault at the University of Wisconsin-Stout and Wisconsin's Polytechnic University as a tuition payment option. "The technology is very simple and it can be added fairly quickly," Lim says.
