Electronic bill presentment is a top priority at Chase Manhattan Bank because its highest-ranking executives have made it so.
After year-2000 compliance, electronic billing services ranks at the top of vice chairman Joseph G. Sponholz's list of technology initiatives.
"It is absolutely the No. 1 priority" among electronic commerce efforts, said Mr. Sponholz, who heads the New York banking company's technology solutions group.
Few banks can boast such high-level commitment to delivering electronic bills to consumers. Chase is in position to grab a piece of a business that U.S. Bancorp Piper Jaffray Inc. has estimated would bring between $560 million and $1 billion of revenue to processors if only 10% of bills were presented electronically. By 2001, Piper Jaffray predicts, 3.5% of bills will be presented electronically.
"Chase is ahead of the pack in terms of executive sponsorship and taking a holistic view," said Avivah Litan, a research director at GartnerGroup, Stamford, Conn. "I have not come across any bank as progressive."
With Mr. Sponholz setting the tone from above, Chase has worn down the divide that typically exists between the retail and corporate sides of the bank to pursue a strategic course that benefits the whole institution.
Observers agree that a number of electronic bill presentment initiatives-perceived as a way to boost traffic to the Web site or as an essential complement to bill payment-have originated on the retail side of many banks.
Retail bankers "got this ball rolling because they saw an opportunity to increase revenue in their home banking programs," said David C. Stewart, vice president at Global Concepts Inc., Norcross, Ga.
Enthusiasm on the retail side has opened the door to a panoply of nonbank service providers. These vendors equip corporations with the ability to electronically present bills. They match them up with banks and others that want to give consumers more reasons to go to their Web sites.
In doing so, they potentially tread upon the wholesale turf of the bank.
"The retail side of the bank is giving away the electronic lockbox business by signing up with nonbank processors," Mr. Stewart said.
Not at Chase.
Electronic bill presentment has been driven by Chase's corporate business, which views presentment as an innovative service to cement its strong corporate relationships.
"We're talking about working with billers in a strategic partnership to 'electronify' and render bills in a way that speeds cash and information flow," Mr. Sponholz said.
According to Ms. Litan, Chase "gets" electronic bill presentment in a way that other banks don't.
"It has taken a while for banks to understand this as a corporate cash management service," she said. "Chase saw that right away."
Planning for Chase's bill presentment service, still to be named, began just over a year ago. June Felix, senior vice president in the treasury solutions group, was appointed to lead the effort after heading Chase's Asian cash management operations for almost four years.
One of Ms. Felix's first tasks was to survey about 100 bank clients, an effort that revealed uncertainty about the new technology and a desire "to work with someone who could mitigate the risks," she said. "This is a huge deal for billers, and they don't know exactly what to do."
GartnerGroup research indicates corporations potentially will look to their banks as sources of information and advice. In a recent survey, 64% said they thought the role of banks in providing electronic bill presentment services would increase.
The service that Chase developed, currently in an employee pilot, includes proprietary software to let companies present bills on any Web site they want. Payments flow directly into Chase's remittance processing, accounts receivable, and cash management systems.
"Companies that go with our solution only need to worry about one connection," Ms. Felix said. If standards change, for example, "Chase is the one that deals with it."
It is no accident that bill presentment, expected to be live in the near future, is a service of Chase Treasury Solutions, a group that generated a large chunk of the $2.6 billion earned in 1998 by Chase Global Services, which also includes global custody and trust services.
Treasury Solutions is the leader in such areas as U.S. dollar funds transfers and automated clearinghouse volumes.
"I have an advantage because I'm a big global bank" with a large corporate customer base, Mr. Sponholz said. "If you only look at electronic bill presentment from the prism of a retail bank, you're at a disadvantage.
"Billers are very important clients to Chase," he added.
They are important to other banks, too. A few, including BankAmerica Corp. and Wachovia Corp., have appointed "payment czars" to coordinate bill presentment payment-system activities across the institution, retail and wholesale sides. Neither of these two banks has announced bill-presentment plans, but both are expected to in the near future.
First Union Corp. expects to be live by the end of the third quarter with electronic bill presentment for corporate customers, following a test in the beginning of that quarter, said Mark J. Havlik, vice president. Like Chase's product, First Union's TotalSolution would let corporate customers present bills to any site and connect to the bank's full set of cash management services.
The retail side of First Union, working with Norcross, Ga.-based bill payment and presentment processor Checkfree Corp., already is presenting the bills of three large billers via the bank's Web site.
"Checkfree made the arrangement with the billers," Mr. Havlik said, "and Checkfree is presenting bills through our home banking system."
He said the arrangement does not signal a conflict between retail and corporate units. Checkfree "is a competitor" in terms of signing up billers, he said, but "the retail side is not competing against us."
Edward Neumann, managing director of Farragut Group in Washington, said the arrangement "would seem to be a conflict and an extension of banks' silo-oriented history."
Chase, while working with Checkfree for bill payment, clearly is exclusively in charge of signing up its biller customers for presentment services, said a Chase spokeswoman.
"Chase is deciding which system will win, and it is theirs," not a third party's, Ms. Litan said.