Spectrum LLC got a major boost on Tuesday when FleetBoston Financial Group said it will join the electronic bill payment and presentment venture as an equity investor and a user.

No other banking company has committed money to Spectrum since Chase Manhattan Corp., First Union Corp., and Wells Fargo & Co. formed it in October 1999. Those four and 21 others plan to use it or have signed letters of intent to do so.

The system is now in pilot testing.

Fleet's individual and corporate customers, most of which are in the Northeast, will be able to send and pay bills over the Internet using Spectrum. Fleet can also help the service sign other banking companies in the region - companies that otherwise might ally with CheckFree Corp., the dominant nonbank provider.

Fleet thinks banks are best positioned to make electronic billing fly, said Michael Curran, executive vice president and managing director of Fleet Global Services.

"We've got tons of eyeballs from each of our own respective retail platforms, and we've got the grease to bring to start to get the proposition going," he said. That grease, he said, is the bills that Fleet itself sends out every month for things like credit cards and car loans to its own customers.

Fleet had been in talks with Spectrum's founding banks since last year but wanted to make sure the technology was sound and the venture "wasn't going to have a capital call six weeks from now," Mr. Curran said.

"They have built themselves a good industrial-strength, broad-based technology platform, and I think they are ready to go," he said. "That's why we are getting in."

Fleet also realized that there can be strength in numbers, Mr. Curran said.

"Hunting as a pack is not always a dopey proposition," he said. "The banks have grown up very fast and have come to terms with the idea of working with their competition with the understanding that this infrastructure is expensive and it's better if a couple of us to build it together. You get better standards and it's faster to market."

Fleet would be interested in private-labeling the Spectrum service and offering it to smaller banks that might not have the wherewithal to build their own electronic billing system, Mr. Curran suggested. The small banks would have access to Spectrum's vast pool of billers, he said.

"With the technology we are investing in building, I'm just as happy to private-label to a bank downstream, get that value down my pipe, and let them play in the market as well," he said.

Fleet's investment in Spectrum will be less than its founders contributed, Mr. Curran said. He would not specify a figure, but "this isn't just pennies in the well," he said. "This is a serious commitment."

Industry insiders have said Spectrum approached the Internet billing game too late and is taking too long to get up and running. The pilot tests involve only the three founding banks.

Norcross, Ga.-based CheckFree, which is expected to be Spectrum's major competitor, has offered bill presentment since 1997 and serves more than 350 financial institutions. TowerGroup, in a study released Monday, said banks have strong opportunities in electronic billing but that third-party vendors like CheckFree initially will do better.

Ronald Braco, chairman of Spectrum's board and a senior vice president at Chase, said Spectrum has not been slow. As he sees it, the market is in its "very, very early stages," so "quoting volume at this point is irrelevant."

The addition of Fleet "represents a lot of billers, and we value their contribution," said Mr. Braco, whose company is in talks with several other large financial institutions.

Banks are the "prime movers in this space" because "they have relationships with all the major billers," Mr. Curran said. "The cash management industry is down to six or seven major bank players, and within those banks you have well beyond critical mass of the major billers."


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