B of A Corporate Customers Can See Checks On-Line

Bank of America has begun offering corporate customers the ability to call up images of checks collected from all over the nation.

The service, which became operational last month and is being announced today, makes account information and check images available through the BankAmerica Direct Internet cash management system. The check-viewing service aims to simplify the gathering of information from diverse regions.

Other banking companies offer image lockboxes "only regionally," said Beth Ann Johnston, senior vice president at Bank of America. "No one (else) has a national solution."

The Charlotte, N.C.-based company expects to be able to reduce exception items, which typically account for 15% to 50% of corporate trade items collected. With access to check images, businesses that operate in several regions can quickly verify the status of outstanding bills and properly credit the accounts of their corporate trading partners. If payment details do not match the amounts on invoices, the collecting company can determine the reason.

Companies use wholesale lockbox services to speed up the collections of corporate trade payments. Checks collected at lockbox sites enter the clearing and settlement system earlier in the process and relieve recipients of the chore of depositing items as they arrive.

Bank of America said it has spent the last two years standardizing the way it captures and processes business checks and related remittance details at all its wholesale lockbox processing centers, which are in Atlanta, Chicago, Dallas, Los Angeles, and San Francisco.

The revamping cost the company "millions," Ms. Johnston said, though she declined to name a specific amount. The investment indicates its belief that wholesale lockbox is a "cornerstone cash management service" and that commercial checks will be around for a long time, she said.

Despite the many electronic payment and electronic commerce initiatives, corporate trade payments are mostly executed on paper, said Lawrence Forman, a cash management analyst at Ernst & Young. The general rule among most businesses is to encourage electronic collections but to disburse funds via check, he said.

Indeed, according to Ernst & Young's recent survey of the cash management industry, revenues from wholesale lockbox services rose 12% in 1998, to $807 million. The revenues were projected for the 100 largest banking companies, ranked by assets, and were based on a statistical sample of 61 responding banks.

"People love to disburse with checks, and they love float," Mr. Forman said. "Most corporate systems are set up to pay and reconcile payments in paper formats, so there is this huge barrier to change."

Bank of America's system requires that corporate customers obtain digital certificates from Verisign Inc. of Mountain View, Calif. The certificates are used to verify the identities of corporate customers and prevent unauthorized access to sensitive payment information.

Bank of America's lockbox network was designed by Vicor, a systems integration firm based in Palo Alto, Calif.

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