NACHA Looks for a Partner to Help Move EBIDS out of Pilot Mode

An electronic bill-payment and ?presentment network put together by NACHA, the governing body of the automated clearing house, is seeking an organization that can help build out the system and give it marketing firepower. Rob Unger, senior director of e-billing and payments at Herndon, Va.-based NACHA, says the association issued a request for proposals last fall and hopes to announce the partner, along with definitive blueprints for the new payment system, some time in the second quarter. Unger will not say what sort of companies NACHA has directed the RFP to, but says “we're looking at a partner that can really extend the market to billers, banks, and processors.” EBIDS, as the system is known, could go into commercial production before the end of the year. “We hope to do it this year, but I can't put that line in the sand yet,” says Unger, who has shepherded EBIDS, or the Electronic Billing Information Delivery Service, since before a current pilot for the service started in September 2008 (Digital Transactions News, Oct. 1, 2008). Unger, who says EBIDS is in “transition” from pilot to commercial service, adds that it will benefit from the move away from pilot status. “The pilot was a great success in terms of participant feedback, but there's reluctance on the part of some [billers and financial institutions] to fully engage in a pilot,” he says. “That was suppressing the market a little.” Still, Unger says NACHA is actively recruiting more participants for the pilot. So far, four banks and one biller, Verizon Communications, are participating in the pilot. Two of the banks, Dollar Bank and Wells Fargo & Co., are taking part as so-called consumer banks, or banks that hold the accounts of bill payers. Two others, JPMorgan Chase & Co. and HSBC, are participating as billers' banks, or institutions holding the accounts of biller companies. Meanwhile, two other billers, Time Warner and Comcast, along with JPMorgan Chase are involved in a new, scaled-down version of EBIDS launched last summer called Pay Only. With Pay Only, billers can request and receive payment from customers, but no e-bill is presented. That simplifies the implementation of EBIDS for billers and financial institutions and gets the system operating sooner, says Unger. While it's not “a big technical project to add [full-scale] EBIDS,” he says, the project can get bogged down in IT queues at larger organizations. While Unger will not discuss pricing, the EBIDS business model calls for billers' banks to pay a fee to consumers' banks for each consumer enrollment and then again for each transaction by the enrolled customer. Billers' banks collect reimbursement for this fee, plus a markup, from their clients. The advantages to billers, Unger says, include good funds and accurate remittance data. With EBIDS, a consumer who enrolls through his bank's online-banking program can receive and pay bills electronically through that same program. Once notified of an enrollment, the biller generates an ACH file containing amount owed, minimum payment due, and due date. This record flows via the ACH from the biller's bank to the consumers' bank, triggering an e-mail to the consumer alerting him that a bill has been received. Upon logging in, the consumer can view the entire bill by clicking on a hyperlink. Specialized single-sign-on technology called Security Assertion Markup Language (SAML) authenticates the consumer so he doesn't have to log in again to view the bill. When the consumer pays the bill on his bank's site, the bank creates an ACH credit that flows back to the biller's bank. The consumer receives online confirmation that the payment was made and the biller receives funds within one or two days. Since the payment is an ACH credit rather than a debit, Regulation E rules giving consumers 60 days of recourse on payments don't apply.