Bottomline Technologies has enhanced its wholesale electronic bill payment and presentment capability by buying Integrated Cash Management Services Inc. of Great Neck, N.Y.

The purchase of the privately held cash management software company for a relatively modest $8.5 million would enable companies that use Bottomline's electronic payments systems to better manage their cash through automation of accounts payable and receivable, said Pawan Malhotra, an equity analyst at CIBC World Markets Corp.

Wholesale electronic bill payment and presentment is considered a threat to banks' wholesale lockbox business.

Bottomline, based in Portsmouth, N.H., has 275 employees and a reported $39.3 million in revenue for the fiscal year that ended June 30. Its purchase of Integrated Cash Management Services is an attempt to create another sales and distribution channel to corporations through banks, Mr. Malhotra said. Integrated Cash Management, or ICM, has licensed its cash management and custody software to institutions such as State Street Corp. and Standard Chartered Bank.

"Banks with large lockbox operations will try to somehow play in this space," Mr. Malhotra said. "Bottomline has an advantage with technology, while banks will have the customer advantage. Bottomline's strategy is that maybe it can partner with them."

Bottomline develops electronic data interchange software that lets companies manage their payments and collections electronically or with a paper check. It is EDI software vendor to the Federal Reserve Banks, which in turn distribute the software to commercial banks through its Fedline network.

Using this software, commercial banks can translate any EDI messages that are attached to automated clearing house payments.

Bottomline, which has 2,500 bank and corporate customers, in July bought an electronic bill presentment system called NetTransact from Northern Trust Corp. The system lets businesses electronically invoice their trading partners.

The deal for ICM, which has 64 employees and about $5 million in annual sales, rounds out the electronic billing offering, said Dan McGurl, president and chief executive officer of Bottomline.

He said very few banks and technology companies are pursuing wholesale electronic bill presentment and payment opportunities, a market that he said has as much potential as its consumer counterpart. Though "there is an incredible amount of interest in this" on the wholesale side, only PNC Bank Corp. and Northern Trust are conspicuously active, Mr. McGurl said.

Mr. Malhotra said BlueGill Technologies Inc. and Billing Concepts Corp., software providers active in the business-to-consumer bill presentment market, are moving into the wholesale area.

Bottomline said it intends to improve ICM's sales and distribution capabilities. Eric Campbell, ICM president, said, "This transaction will allow us to deliver ICM's industry-leading technology to a greater spectrum of customers who have been seeking quick-to-implement solutions for their Internet initiatives."

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