Bank networks strive for international alternative payments system

As a growing number of online alternative payment methods take market share from traditional bank-issued payment cards, bank networks in the U.S. and abroad are working toward an international system of supporting direct e-commerce links to bank bill-pay services as their own alternative to credit and debit cards. The networks are providing immediate guarantee of payment without requiring merchants to process or store any consumer payment account data, says Richard Brierly-Jones, executive vice president of the International Council of Payment Network Operators.

Bank-owned networks are trying to compete with non-bank providers of alternative payment methods, which have been taking revenue away from banks, says Brierly-Jones, who is based in Denver and is also executive vice president of eWise Systems.

EWise is partnering with NACHA® The Electronics Payments Association, to provide the U.S.-based Secure Vault Payments system, which lets customers of participating online merchants click an icon in a shopping cart to process a direct debit from their bank account to complete an e-commerce payment transaction.

Similar direct-debit systems are also operating in the Netherlands, Germany and Canada, and the bank network VocaLink is planning to launch a similar system in the U.K., Brierly-Jones says.

The ultimate goal of the bank networks is to enable international direct-debit services, so that consumers can click to make a direct-debit payment on any e-commerce site regardless of the host country. Later this month, the International Council of Payment Network Operators will conduct its inaugural meeting in London to address international transaction issues such as cross-border settlements, cross-network pricing and branding, Brierly-Jones says.

The networks are also talking with bank credit card associations Visa Inc. and MasterCard Inc. about also including bank credit cards as payment options available through the Secure Vault Payments and other payment services available through the bank networks, Brierly-Jones says.