NACHA To Test Bank-Provided Online Authentication & Private Payments
NACHA - The Electronic Payments Association will organize a pilot to test online transactions in which consumers would be authenticated by their own financial institutions, and initiate private, secure electronic payments via their financial institutions' online banking Web sites. NACHA's Board of Directors recently approved the test for consumers' online funds transfers, bill payments and purchases.
In the pilot, a consumer would choose to complete an online transaction at a Web site using this authentication and payment method. The consumer would then be re-directed via a secure network to their financial institution's online banking Web site, where they would log in using existing log-in procedures. Once securely within the financial institution's Web site, the consumer would confirm the details of the transaction and authorize payment.
Because the consumer would authorize payment via their own financial institution, they do not provide financial account information to the business or a third-party; it remains private between them and their financial institution. Because the business does not receive and store their financial account information, it does not have the responsibility of securing the information from mishandling, misuse or theft.
NACHA's objectives in organizing the pilot are to: 1) evaluate the potential markets of new online transactions enabled by the privacy and other features; 2) evaluate the structure and level of fees that would best result in adoption by all participant categories; and, 3) determine the costs, benefits and net economic impact to participants. The pilot comes on the heels of a successful proof-of-concept phase, which demonstrated that the process for a round-trip transaction works well and quickly, and that users found it easy to use.
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