Chase Wire Transfer System Tailored to Middle Market
A unit of Chase Manhattan Bank has developed a wire transfer system aimed at banks with small and midsize corporate customers.
TX/Wireplus is a multicurrency wire transfer system developed and marketed by Chase Access Services Inc., based in Lexington, Mass.
Chase is testing the system at five regional and foreign banks, according to James H. Logan, director of sales and marketing for Chase Access Services. He declined to name the banks involved.
The system is expected to be generally available by mid-November.
As competition among cash management providers for large corporations' business heats up, banks are moving to offer these systems to middle-market companies - those with annual revenues of $50 million to $500 million.
Small and medium-size companies are "clearly an area that has been identified by banks as a market segment that has not been aggressively attended to," said George Rusznak, head of banking technology at the Los Angeles consulting firm CSC/Index.
A recent study by Ernst & Young found that the middle market contributed 37% of cash management revenues in 1990, up from 35% in 1989; large corporations accounted for 44% of revenues in 1990, down from 47% in 1989.
The new Chase system is aimed at small to medium-size corporations with global businesses. "We're finding a lot of activity in banks across the country from their international departments," said Mr. Logan.
Enhanced Data Security
Chase said the TX/Wireplus system enables banks to comply with UCC Article 4A, adopted in January, which addresses legal liability in funds transfers. The system provides end-to-end message authentication, which offers a relatively high level of data security between a customer and the bank's money transfer system.
"Many larger banks can do end-to-end authentication for larger corporations," said Mr. Logan. "This enables a bank to offer this capability to a larger range of customers."
The Chase system is marketed to banks, which in turn sell to their customers. Corporations send payments instructions on a personal computer. The transaction is then sent to a Chase Access mainframe, where the sender's message is verified. Chase then sends the transaction to the bank. The system interfaces with existing money transfer systems that initiate the transaction on the Swift, Fed Wire, of Chips network.
Traditionally, banks take these instructions from corporate clients over the telephone or at a bank branch. Mr. Logan said the new system is easy to use, with customers performing a variety of funds transactions - entry, approvals, and releases - from a single screen.