Bank of New York Co. has started offering an electronic invoicing service that provides its corporate customers with a detailed look at their receivables and payables throughout the payment life cycle.
Eric Kamback, a senior vice president and the head of Bank of New York’s global payment services group, said the service, the result of a contract with a bill presentment and disbursement vendor, is the only one to handle both accounts payable and accounts receivable for corporate customers.
“We believe we are the only ones in the industry today who can offer the complete solution,” Mr. Kamback said.
Public utilities, retailers, and auto finance companies are among the target customers for the service, which Bank of New York started offering this month, he said. It is negotiating with 60 or 70 corporate clients Mr. Kamback described as “very interested” in the service. It has already closed five deals and hopes to close 10 more in the next 30 to 60 days, though he would not name the clients.
“We think we’ve hit on something that fills a tremendous void in the industry,” he said.
The service allows companies to deliver statements through their own Web sites (or those of a bill consolidator) or by a secure e-mail service. People can then make payments electronically with a checking account, credit card, or debit card. Customers can pay their bills online, over the telephone, or by authorizing direct automated clearing house debits.
“It gives consumers the flexibility to make payments any way they choose,” Mr. Kamback said.
The electronic system also provides better treasury management for the companies, including real-time information on both receivables and payables, he said. One more very tangible benefit: “Our clients receive their payments a lot sooner.”
Bank of New York is working with Harbor Payments Inc., an Atlanta company that offers Internet-based payment management technologies. Harbor Payments, which was known as CyberStarts Inc. until September, entered the electronic bill payment and presentment business last year, when it acquired most of the assets of Billserv Inc. for $4.8 million.
Billserv had developed an EBPP system that enabled the transmission of billing information over the ACH network, but the San Antonio company ran out of money and had to put itself up for sale before it could take the system beyond the testing phase.
Harbor Payments combined Billserv’s EBPP offering with its own disbursement service to provide the technology that underlies Bank of New York’s service.
Ashish Bahl, the chief executive officer of the privately held Harbor Payments, said Bank of New York is the first banking company to use the technology. Now that it has been rigorously evaluated, potential corporate users and bank partners may be able to move more quickly through the decision-making process, he said.
“Bank of New York has put us through a pretty significant due diligence process,” Mr. Bahl said. “Clients can contract with Bank of New York, and they don’t have to go through six months of due diligence with a midsize technology company.”
Harbor’s technology is used to transmit the e-statements to consumers, receive payment instructions, and relay them to Bank of New York, which executes the transactions, collects the payments on behalf of its corporate clients, and deposits the money into their accounts.
On the disbursement side, Bank of New York can offer clients a consolidated view of their payables using Harbor’s data-mapping technology, Mr. Bahl said. This has proven useful, for example, to one manufacturer that has grown by acquisition and is now using seven disbursement systems in its various business units.
Gary R. Craft, the CEO of the San Francisco advisory firm Financial DNA LLC, voiced skepticism about whether a bank can market an e-billing service.
To successfully market this type of service, a bank needs to persuade clients to send large volumes of statements online through the service, Mr. Craft said. “Banks aren’t terribly sensitive to market needs. The problem is, will the corporations really bite?”
