Spectrum Hopes to Spur Use of Bill Presentment
2001; American Bankers Association; Volume: 93; Issue: 3 Linguagem: Inglês
ISSN
0194-5947
Autores Tópico(s)Digital Platforms and Economics
ResumoAs the bill payment and presentment industry continues to find its feet, the ongoing slow adoption rates almost seem like an Enter Center Stage cue for Spectrum EBP, bank-owned consortium formed in 1999 to provide universal switch for connecting EBPP transactions. Spectrum was formed and is owned by Chase Manhattan, First Union, and Wells Fargo. Together, the three banks have more than five million online banking customers. FleetBoston Financial has announced that it will join as co-owner. So far, 21 other banks have either signed up or sent letters of intent to join as participants. Announced participants are ABN Amro, BB&T, First Tennessee, HSBC, Hibernia, M&I Bank, Mellon, Michigan National, Provident, Summit, Union Bank of California, and Wachovia. Ron Braco, president and chief operating officer of Spectrum, calls his service an open, interoperable switching utility and likens it to nationwide ATM network. Braco was senior vice-president at Chase Manhattan, where he managed the bank's proprietary ATM network. He also helped develop the Cirrus and NYCE networks. Banks will pay Spectrum for the use of its bank-branded switching services in generally the same way that banks pay for using ATM networks. Costs for the billing services will include annual participation fees and transaction fees based on volume. These participation fees will be based on the institution's asset size, so community banks can afford them, Braco says. On the payment side, billers and consumers will share costs of a couple of pennies per transaction. Consumers pay no fees directly. The Spectrum solution is unique, Braco says, because it puts banks at the center of the EBPP process and assures that the service will not compete for customers. Its superior architecture enables real-time transactions, requires no user-interface codes, and offers an extraordinarily high order of security, he says. But the crown jewel of the Spectrum design is its ability to work in Interactive Financial Exchange (IFX), the new standard language for financial messaging. Because it is designed to be used on network, IFX enables users to track transactions from end to end. IFX also allows billers to receive, in electronic form, the remittance data they are used to getting from paper-based systems. Spectrum is testing IFX now. Braco expects it to be customer-ready in the third quarter of this year. The new financial-messaging standard is critical to the goal of making EBPP universal, totally interoperable system, Spectrum stresses, adding that all billpay services will eventually migrate from Open Financial Exchange (OFX), the present standard. Until then, Spectrum will support both specifications. [Sponsors of OFX say that their spec already supports EBPP and can evolve to handle future developments.] Spectrum has tapped Alltel to develop the information technology, software development, and professional services for its switch. InteliData, under subcontract to Alltel, contributes bill payment products and services. This agreement includes the license to use InteliData's Interpose[TM] warehouse software, which stores payment instructions and data and enables on-us internal processing, interbank transfers, and other cost-saving operations. The Interpose warehouse is also presently available in OFX flavor. How Spectrum works A bank-selected biller service provider (BSP) generates billing information in electronic form, aggregates statements from various billers, formats them into OFX/IFX messages, and transmits the files to Spectrum. Each statement includes the biller's name, amount due, date due, and outstanding balance. For more details, the customer can click on hyperlink to the biller's website. If they prefer, billers can send their data directly to Spectrum switch, which is located at the Chase data center in Houston.[A nonbank BSP must be sponsored by financial institution. …
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