American Express Co. is expected to announce today that it has chosen a vendor to replace Fiserv Inc. in supporting Membership Banking, the Internet-only bank it introduced last July.

The card giant is expected to announce it has awarded the contract to Sanchez Computer Associates Inc. and become the sixth announced customer of Sanchez's e-Profile outsourcing service for Internet banking. The companies expect to complete the transition by yearend.

Amex declined to comment on why it ended its relationship with Fiserv in February, but one industry observer said it was a mutual agreement. "The relationship between American Express and Fiserv had gotten a little bit onerous," the observer said. "American Express was a little demanding, and Fiserv was happy to let it go."

The agreement with Amex would fulfill Sanchez' desire to attract Internet banking clients with strong brand names. "Brand has tremendous value, which is why we want to target the brand players in the marketplace," said Michael Sanchez, chief executive officer of e-Profile Inc. and co-chairman of Sanchez. "Consumers want to do business with a company that has a recognizable brand that they can trust."

Amex conducted extensive due diligence, Mr. Sanchez said. "Their brand is very important to them, and they want to make sure that it is protected," he said.

Ruediger Adolf, senior vice president of strategic planning and business development for American Express, said, "Working with e-Profile and utilizing their experience will allow us to quickly identify and implement new technologies and provide operational support for Membership Banking."

An American Express spokeswoman declined to comment further on the company's plans or the number of Membership Banking customers.

Mr. Sanchez said his company and Amex "are working on other projects" beyond Membership Banking, but he would not be more specific. "The agreement allows Amex to use our software anywhere in geographic areas around the world," he said.

Sanchez announced this month that it would provide intranet software to Morgan Stanley Dean Witter to support its brokers in offering loans and investment products to small businesses. Sanchez' other customers are Lehman Brothers Bank,, Sovereign's Internet bank firstwebbankdirect, and

The American Express contract is a huge win for Sanchez, said Glenn Greene, a senior analyst with ABN Amro, especially considering Amex' size and Sanchez' revenue model. Sanchez charges per-customer fees, rather than licensing the software.

"There is huge potential to do cross-marketing, especially considering that American Express has more than 30 million domestic credit cardholders," Mr. Greene said. "This is certainly a meaningful client for them."

When American Express announced it was ending its contract with Fiserv, Les Muma, vice chairman, president, and chief executive officer of Fiserv, told American Banker that it would not affect the company's revenue. "We hate to lose clients, but I think in this case we are better off and American Express is better off," he said in an interview.

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