A new alliance headed by bank technology specialist Fiserv Inc. could level the playing field in the $7.75 billion cash management business.

Fiserv, National Processing Co., Carreker-Antinori Inc., and UPS World Wide Logistics have agreed in principle to form a joint venture aimed mainly at giving smaller cash managers access to sophisticated technology and services.

Because cash management, which includes pursuits such as lockbox and controlled disbursement, is scale-driven, and requires large technology investments, it has come to be dominated by large banks.

The top five players take in 32.7% of annual domestic cash management revenues, and the top 20 account for 71.3%, according to Ernst & Young LLP.

Observers said the new venture, to be called Infiteq, could help usher in an era of new competition.

M. Arthur Gillis, an independent bank technology consultant based in Dallas, said smaller players have been "itching" for a single source of integrated cash management technologies.

Stephen Ward, senior vice president at Milwaukee-based Fiserv, added, "We also strongly believe in the fact that this is something the marketplace wants."

"There are a handful of banks that have the scale that can create a very distinct cost advantage for themselves. If you are not one of the handful of those banks, it's very difficult to compete," Mr. Ward said.

The four companies involved in Infiteq said each would have an equity stake in the venture.

Discussions about the division of ownership, staffing, and other issues are continuing, and executives at the participating companies declined to speculate on when they would reach consensus.

They said several financial institutions also could become owners and service providers within Infiteq, but declined to disclose names.

David R. Zook, executive vice president of National Processing Co., said Infiteq will tap the strengths of each participant and link them where possible.

"We believe the whole is greater than the sum of its individual parts," he said.

The venture will offer wire transfers, automated clearing house payments, and other services banks provide to their corporate customers, such as controlled disbursement, check imaging, lockbox, and sweep account processing.

Fiserv officials credited J.D. "Denny" Carreker, chief executive officer at Dallas-based Carreker-Antinori, with the concept behind Infiteq.

Mr. Carreker, whose firm manages the banking industry's Electronic Check Clearing House Organization and Payment Solutions Network Inc., approached Fiserv officials with the idea in 1995.

Formerly the president of Carreker Group, Mr. Carreker recently merged his company with Antinori Software Inc. an Atlanta-based developer of check fraud prevention systems for banks.

The new company provides management and consulting services to banks, and develops software for float management, check processing, and electronic check presentment.

Mr. Carreker stressed Infiteq would not compete with banks, nor with private sector check clearing alternatives, such as the National Clearinghouse Association.

Vendors of check clearing and payments systems services said the venture, in fact, may have beneficial effect on their business.

"I think this (venture) is actually something quite good for our common customer base," said Rick Burke, clearing house administrator and director of payment systems at AFS & LSC Inc. "I view this as being quite complimentary."

Another Infiteq partner, National Processing Co., is a Louisville, Ky.- based firm, 85%-owned by National City Corp. of Cleveland.

National Processing, which was spun off last year, is the second largest processor of merchant credit and debit card transactions, and the third largest processor of point of sale check acceptance transactions. The company also runs a large retail lockbox network, and plans to expand its wholesale lockbox business.

Mary Anne Francis, vice president at National City Corp., said the holding company's bank unit may participate in Infiteq. But for the short- term, National Processing is the focus.

The bank may become involved in "expanding the business" once the "lockbox and other parts of the business are up and running," she said.

UPS Worldwide Logistics, based in Louisville, Ky., is an independent unit of United Parcel Service of America Inc. It will supply the air and ground transportation services for the venture. Such services are an integral part of certain check processing tasks.

Fiserv lies at the heart of the Infiteq venture, by virtue of its size and the number of relationships it has with smaller banks.

The company has about $800 million in annual revenues and does business with about 5,500 financial institutions in the United States and Canada. Among the services it offers: outsourcing for core data processing, check processing and imaging services.

Fiserv vice chairman, president, and chief operating officer, Leslie M. Muma, said "Interstate banking is one of the key things behind" the formation of Infiteq.

As larger banks expand across state lines, it has become harder for community institutions to compete for corporate business.

Infiteq is designed to help the smaller players upgrade the types of services they provide and let them offer such services at a competitive price.

Mr. Muma said the venture's services will allow banks to follow their corporate customers across state lines, even into locales where they have no presence.

Infiteq participants also said large banks might use the venture to provide expertise in certain niche areas.

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