BankAmerica and C&S To Spearhead Visa's Test
BankAmerica Corp., C&S/Sovran Corp., and Manufacturers Hanover Corp. will participate in tests of a new electronic home shopping and bill-payment service being developed by Visa U.S.A. and a technology company.
The service, which uses a specialized computer terminal that will be able to read credit and debit cards, was first described by a Visa official in an American Banker article Friday.
U.S. Order, a subsidiary of World Corp., Herndon, Va., is aiding Visa in the development of the system.
Marketing to Follow
Visa plans to eventually market the service to member banks, which will offer it to their Visa Debit customers. The card association plans to begin testing the service later this year using a select group of cardholders of BankAmerica and C&S/Sovran, sources close to the project said.
A BankAmerica spokesman would not comment on the bank's participation in the test. C&S/Sovran officials were unavailable.
Manufacturers Hanover will initially act as the go-between for the bill payment service, electronically debiting consumers' bank accounts for payments and transmitting funds to the accounts of utility companies and merchants.
The arrangement strengthens Hanover's role as processor for electronic consumer bill payment, a fast-growing market.
Experience at Transactions
The bank already processes these types of transactions for the home banking programs of several institutions around the country and for a bill payment service offered by Prodigy Services Inc., an on-line information network.
If the service catches on among consumers, it will help Visa expand outside credit card services and increase debit card sales volume. It will also help Visa and its member banks to compete with nonbank companies such as Prodigy, jointly owned by Sears Roebuck & Co. and International Business Machines Corp., that are beginning to offer electronic bill payment services.
William F. Gorog, chairman and chief executive of U.S. Order, predicted that the service would cost consumers less than $10 a month. The cost of the terminal will probably be subsidized in part by Visa and member banks. Banks may also charge an additional monthly fee for the service.
Test Is Due Soon
U.S. Order has already begun testing the home shopping service in Washington, D.C. Initially, consumers can order and pay for groceries from area supermarkets. The company eventually plans to expand the service to other types of bill payments in the coming months.
The terminals, manufactured by Verifone Inc., resemble point-of-sale devices used in department stores.