Five big-name firms in the financial services and technology arenas have joined forces to create a company they hope will truly Web-enable payments in business-to-business e-marketplaces.

The new creation, aptly dubbed, is the product of an alliance between Wells Fargo & Co., New York-based Citigroup Inc., Atlanta's S1 Corp., Enron Broadband Services and Dallas-based i2 Technologies Inc. It will provide buyers and sellers in e-marketplaces with payment processing and other financial services through a variety of participating institutions, along with the infrastructure to move money quickly. In doing so, the companies say a major void will be filled-namely, allowing businesses to settle entire transactions online, rather than having to wire money or write checks. will help buyers and sellers expedite their cash-flow processes and manage their working capital, said Ann Cairns, global e-solutions head for Citigroup's e-business. Her remarks came during an August teleconference announcing the launch of the company, which Cairns describes as "the missing link" in e-marketplaces.

By its very nature, conducting B-to-B transactions on the Internet exposes marketplace members to financial risk involving payments and credit transactions, said Steve Ellis, Wells Fargo's executive vice president of wholesale Internet solutions and's treasurer. "The five firms (involved) wanted to solve this."

Many companies exist that try to offer what will provide, Christopher Huppert, a vice president at San Francisco-based Wells who is involved with, told BTN. "Everyone wants to act as an intermediary (in e-marketplaces)-credit card companies, dotcoms. But they're just providing one piece of the whole picture."

Services available from will include escrow, letters of credit, payments, receivables and foreign exchange. According to Huppert, it's all a matter of expertise. "There's a lot of specialization in various services in banks. Also, most dotcoms don't want to take on risk. Banks are good at this."

In addition, Enron Broadband Services, a subsidiary of Houston-based energy and communications company Enron Corp., will provide a high-speed broadband network for all transactions. The company claims its Enron Online wholesale commodities transaction system completes more than a billion transactions a day.

But how feasible will a broadband network be when the world continues to await its long-touted explosion? Anthony Carfang, a partner with Chicago- based Treasury Strategies Inc., says, "There's a real race to build the digital infrastructure. I think Enron is right on with broadband."

Wells' Huppert says that only through broadband can truly provide the security and bandwidth to "support the interface between the vertical marketplaces, the banks and FinancialSettlementMatrix." He adds that using broadband can eliminate the need for banks to use expensive leased lines for their corporate customers.

To complete the offering, has licensing agreements with S1 and i2 to use some of their technology. The package will consist of payments technology from S1's Corporate Suite software that will be integrated with i2's TradeMatrix e-marketplace technology. membership will be open to all banks, so businesses will not be restricted to using financial services from Wells Fargo and Citibank. "Customers prefer to access their existing financial services provider," Huppert says. "Some marketplaces try to cut a deal with a single financial institution, but that hasn't particularly gone over well. This is a new distribution channel for banks." And not only is the network open to other financial providers, but the system is designed to be used by any e-marketplace, regardless of underlying technology. "The Internet is all about being open."

A pilot of is slated for the fourth quarter of 2000 that will involve Wells, Citi and one i2-driven exchange. The pilot will support card transactions (corporate, purchasing, business cards), ACH settlement and printed checks. "Some buyers still can't accept electronic payments, so Wells and Citi will cut checks and mail them to the vendor on the buyer's behalf," Huppert says.

Once the service is ready to roll out, users will be charged subscription and transaction fees. Banks will also have to pay a yet-to-be-determined membership fee. Implementation pricing might be based on a tiered model according to which services banks desire from

For his part, TSI's Carfang hasn't seen any online marketplace solutions that would be very effective in the long run. "There's no smooth total end- to- end solution out there. Parties still have to settle their transactions manually."

"( is going to eliminate many internal costs for businesses," Huppert claims. "We'll support financial transaction initiation so companies don't have to go offline to settle deals."

But Christiansen adds there are many companies in existence with the same goal as digitizing payments and remittance. One such company is Portland, ME-based Clareon Corp. and it too says it can send remittance data electronically. Its business payment network is based on technology used for a 1998 e-check pilot by the U.S. Treasury and a consortium of banks and technology companies.

Chief Marketing Officer Kate Barrand says Clareon changed the technology to a "more commercially viable version. We also use an ASP model because we wanted to reduce adoption barriers." Like, Clareon's network is "bank neutral" so companies can continue using their existing financial institutions.

Its business payments network, claims Barrand, digitizes the entire payments process. "We transfer a rich field of remittance information online. This information goes straight through the buyer and seller with proof of payment."

The technology operates on Java applets and has a browser interface where users can make, receive and view payments. It is also designed to interface with companies' ERP systems to any degree requested.

Currently Clareon is capable of enabling the payments and remittance process to corporate members and their existing financial institutions. However, Clareon has not yet formed relationships with online exchanges, although the company is in talks with some. might see an edge in this space since it has members of i2 at its disposal.

Clareon has slated a pilot for early fall that will involve at least three beta customers and their supplier networks, Barrand explains. "In this instance, we have some lead time (over and we're going to capitalize on the fact we've been working with banks over the last six months. It gives us small breathing space."

Whether companies like Clareon should be looking over their shoulders when finally comes on the scene depends on who you ask. To Carfang, it's credit card companies who are in danger. He thinks they are missing out on a great opportunity for enabling B-to-B settlement online. "Every company has a credit card, the infrastructure is in place, the card companies have phenomenal information on cardholders and all financial institutions are linked to each other worldwide."

So what's stopping the card companies from cornering the B-to-B e- payments marketplace? "They're being blinded by short-term profits," Carfang says. "The problem with credit cards is a pricing problem, not a structure problem. They're making a lot of money charging corporations for transactions." This is why he thinks it's not cost effective for businesses to use credit cards and why they might be drawn to a service like

Huppert, on the other hand, thinks cards can still hold their own. "They're very efficient payment mechanisms," he says. "We're really a threat to those organizations that have tried to step in to be intermediaries."

And the biggest losers of all? "The big losers should be checks. If businesses can settle everything online, they won't need checks. Financial institutions might even welcome this (since they've been trying to wean customers off paper for years)."

The quintet of companies contributed an equal amount to the formation of, although they declined to specify how much. They also each have members on's board of directors, though the start-up will operate as an independent private company with its own management team. At press time, the questions of a CEO and headquarters were still up in the air.

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