Why Regions Bank is Offering Secure Vault Online Payments

"We were interested in adding this to the depth and breadth of product features we offer," says Greg Miles, senior vice president and Regions Treasury Management product development executive. "It's important to us to be able to offer this to commercial clients interested in expanding the range of payment options available to their customers. We have a variety of client types that would be interested in Secure Vault payments."

For example, a banker calling on a university for its banking business might offer this as a way to accept large online payments such as tuition. Four universities — Auburn University, Columbus State University, University of Georgia and University of Wisconsin — accept Secure Vault to date.

It's also important to the bank to accept Secure Vault payments on the consumer side, Miles says, and be listed on the drop-down menu on sites that support Secure Vault.

Secure Vault uses technology from eWise and NACHA's clearing network. It appealed to the bank because "it combines the convenience of the automated clearing house network with security that isn't always available with an ACH payment," Miles says.

"An ACH payment is subject to non-sufficient funds and other issues. With SecureVault payments, there's a high degree confidence the that purchaser is who they say they are, and we do check funds availability and hold funds the way the way credit or debit card payments do."

The system lets the bank extend the security measures it's developed for online banking, such as multifactor authentication, to Secure Vault payments.

"It's not a full-fledged login to online banking," Miles explains. "The way the user experience works, our customer goes to a merchant's website that accepts Secure Vault. When Regions Bank is the selected bank, the user is presented a scaled-down authentication page, which then provides a list of eligible bank accounts the customer can select from to make payment. Once an account is selected and the funds available verified, then the payment is made. Behind the scenes, we place a hold on those funds, then we conclude that payment using the ACH network."

The hold is typically two or three days. The bank is in the process of creating a secure interface from Secure Vault to Region's online banking system.

Miles acknowledges that future acceptance of Secure Vault among merchants and consumers is unknown.

"To some extent, there's a chicken and egg scenario going on," he says. It's important to the Secure Vault Payment network that many financial institutions participate, and it's important to the banks that the network sign up more merchants.

"We're impressed with the range of financial institutions that are already part of the network and we felt it was important for us to be participants as well," he says. "We do think it's important to provide alternatives to commercial clients and consumers, beyond that I can't say."