NationsBank Corp., Charlotte, N.C., has developed an automated multicurrency service for corporations that make specialty payments.
The service, called FX Wire and Draft, addresses a growing need among businesses to simplify foreign exchange payments originating outside corporate treasury departments, the usual source of Fed wire transfers.
But company divisions such as accounts payable are increasingly finding themselves moving money internationally, for example, to pay suppliers or employees.
"In a lot of companies, these became known as 'nuisance payments,' even though the amounts are fairly large," said R.C. "Rick" Leander, senior vice president of Internet initiatives at NationsBank.
Based on the internal form of Internet technology known as an intranet, FX Wire and Draft simplifies transactions by letting officials initiate them from desktop computers.
Whereas corporate foreign exchange transactions are typically automated through treasury workstations, foreign exchange traders must be contacted by telephone for specialty payments. Corporate officers then orally negotiate exchange rates and give the traders payment-delivery instructions - an onerous process, Mr. Leander said.
NationsBank spent three months developing the service, which uses object-oriented computer technology. It operates on a corporation's private network using Web browser software.
Knoll Inc., an East Greenville, Pa., company with annual sales exceeding $500 million, was one of 30 pilot users. The old way of making payments required "a lot of phone calls and faxes back and forth," said Julie Statler, cash manager at Knoll.
Paying suppliers in Italy and Ireland, "we do in the neighborhood of 40 of these transactions a month," she said.
NationsBank plans to supply the service to about 120 more companies by yearend.
"It's a niche product but also one where we cut our teeth on these new techniques," said Nick Alex, NationsBank managing director of global treasury and trade.
He was referring to the use of Web browsers and intranets. The service could one day be moved to the wider Internet, he said - if demand justified it and if it overcame a perception it is insecure.
