Six of Canada's largest financial institutions are putting their own stamp on the Transpoint electronic bill presentment service.
Transpoint, a venture launched in 1997 by Microsoft Corp. and First Data Corp., was named one of the two providers of electronic bill presentment for e-route, a consortium formed last fall aimed at promoting the service. The other designee was BCE Emergis, a Montreal-based electronic commerce company.
The Canadian institutions have arranged to work differently with Transpoint than do most of the nine U.S. banks pilot testing its service. In the United States, Transpoint mainly signs up corporate billers to participate in presentment. In Canada, the banks are to solicit corporations.
"That's the biggest difference" in the way the U.S. banks and Canadian banks are using Transpoint, said Bryan Kerdman, chief executive officer of e-route.
Some observers view the Canadian approach as better for helping banks preserve their relationships with large corporate customers.
Banks need to ask "how the wholesale side of the bank feels about Transpoint calling on their commercial depositors," said Richard Crone, vice president and general manager of Cybercash, which sells electronic bill presentment software. "If that role is being delegated to Transpoint, that is to the peril of the wholesale side of the bank."
Warren Dent, senior vice president for marketing and business development at Transpoint, confirmed that Transpoint in Canada is "totally different. The banks own the relationship with the billers," he said. They "have very strong arrangements with their commercial customers."
"We have absolutely no problem," he added, if U.S. banks want to call on corporate billers. He said Transpoint has contracts with two banking companies-one is Citigroup, a co-owner with First Data and Microsoft-that include provisions encouraging the banks to solicit their own billers.
"It hasn't really risen to the top of banks' radar screens to do that yet," he said.
Mr. Kerdman described e-route as a "central repository or switch" for electronic bill presentments. In other words, corporate customers of any of the six participating banks could send electronic bills to a consumer who banks at any one of the institutions.
This is a function that many U.S. banks had expected Integrion Financial Network-a consortium of 15 banking companies, International Business Machines Corp., and Visa U.S.A.-to fulfill.
"Some people have compared us to Integrion," Mr. Kerdman said, "but we think we have a unique model."
Like the Integrion banks, the Canadian institutions have put equity-a "seven-figure investment"-into the venture. The banks are Canada Trust, Canadian Imperial Bank of Commerce, National Bank of Canada, Toronto- Dominion Bank Financial Group, Royal Bank of Canada, and Mouvement des Caisses Desjardins.
Bank of Montreal, which is involved in a "quasi-competitive" effort being organized by Canada Post, the country's post office, dropped out "at the last minute," Mr. Kerdman said.
Besides making equity investments, the banks are to pay to send their bills to the e-route repository. Ultimately, they would share in any profit.
The Canadian banks chose Transpoint and BCE Emergis from a list of 21 possible providers. BCE Emergis is to be the systems integrator, licensing Transpoint's electronic bill presentment software and using it at the various banks according to individual contract agreements. "Virtually all" the e-route banks use BCE Emergis as their bill payment processor, Mr. Kerdman added.
"The customer service angle was one of the reasons we liked" the Transpoint solution, Mr. Kerdman said. The software logs all the customer and biller information needed for responding to queries and resolving disputes, he said.
On the short list of possible providers, Mr. Kerdman said, was the combination of IBM and Checkfree Corp., with IBM acting as the systems integrator and Checkfree providing the software. Other finalists were Electronic Data Systems Corp. as the integrator in a joint bid with Oracle Corp. and its software.
