A post relating to this item from Finextra:
15 June 2011 | 8811 views | 1
EBA Clearing has outlined plans to launch a pan-European electronic payments service for online shopping, enabling buyers and sellers to complete transactions through their e-banking portals.
No, not because it's innovative - it isn't. I can think of at least one provider of this type of alternative payment each in the USA, UK, Netherlands and India that has been around for several years. Called 'Secure Vault Payment' or 'SVP' in the USA, these
payment methods connect online shoppers with Internet Banking portals of domestic banks selected by them (i.e. consumers). Ironically, for all the hype around its entry into payments, Google uses one such SVP - and not Google Checkout - for AdWords payments
Where myBank trumps all incumbent providers is in its awesome geographical reach and inherent ability to foster trust among consumers.
While domestic transactions are a given, myBank can also facilitate cross-border transactions within the EURO-zone. As far as I know, myBank is the only multi-country SVP payment.
myBank is well positioned to address a major hurdle standing in the way of mass adoption of SVP, namely lack of consumer trust. Many consumers I know avoid SVP because they are wary of being ferried around their respective banking portals by third-party
providers. They see potential risk of exposure of their Internet Banking credentials in the hands of these providers who are often venture-funded, startup-mode companies. This might be a perception problem since I've been assured by most providers that they
can't view usernames and passwords entered by consumers into their banking portals. However, I haven't seen such an assuring message in the normal payment workflow. Besides, providers do seem to be 'looking over the shoulders' as consumers enter the credentials,
so it's open to question how many consumers would take their assurances at face value. Consumers shouldn't have any such apprehensions with a bank-consortium driven product like myBank.
By using SEPA / PE-ACH rails, myBank shouldn't cost merchants any more than credit / debit card fees. Therefore, merchant acceptance of myBank should be a cinch.
Overall, myBank seems to have a bright outlook. If its vision is executed well and on time, incumbent SVP providers in the Eurozone might have a lot to fear from myBank. They might need to find ways to differentiate their offerings to survive the likely
onslaught by myBank.