Bank of Boston Corp. is offering a service that allows its cash management customers an easier way to post information from electronic data interchange payments.
The service, called EDI 25, receives a client's electronic payment and information, translates it into an easy-to-read format, and then delivers the information to the client's personal computers either through Bostonet, a financial information reporting system, or by fax.
Financial EDI, the electronic movement of payments and related information over the automated clearing house network, is used by about 14,000 financial institutions and 300,000 companies.
Bank of Boston, with $40.6 billion of assets, is targeting the new service to companies that haven't yet adopted EDI technology into their account receivables. The use of financial EDI is expected to increase rapidly in coming years, and more and more banks are vying to be in the arena.
Recent research by BIS Strategic Decisions of Norwell, Mass., has indicated that the EDI software and service markets will grow at rates upwards of 25% annually for the next five years.
Louis West, an EDI technical consultant with Bank of Boston, said an advantage of EDI 25 is that it translates the payment postings and other data into a standardized format people can read easily.
The bank uses a mainframe translator that it acquired last year from Sterling Software Inc. The translator pulls information from among the four EDI formats, converts it, and then feeds the data on-line in a document-like form.
Bank of Boston offers the service nationally to its corporate customers. Officials say it is the only New England-based bank to offer EDI that is translated to a readable format.
But that may change once the National Automated Clearing House Association decides next month on a vendor to develop an affordable software package for financial EDI.
The trade association, based in Hem don, Va., is responsible for rules governing automated clearing house operations. In April, it issued a request for vendor proposals on development of an affordable system to jumpstart the banking industry moves toward EDI.
The trade group has indicated that once the software exists, it might require all banks to become capable of sending and receiving over the automated clearing house network.
But, despite the increase in such payments, many banks - especially those with low receivables volumes - have been reluctant to invest in the technology.
Mark Stuparich, vice president and EDI product manager with Chase Manhattan Corp., said that most big banks already offer their corporate customers similar services. He noted that Chase has offered its human-readable EDI service for five years.
Of the roughly 9,500 bank entities in the United States today, perhaps as few as 20 offer a service that translates EDI information into an easily read form, according to the Tower Group, Wellesley, Mass.