Fiserv Inc. chief executive Leslie M. Muma said that by yearend the outsourcer could reach an agreement to manage a check processing consortium made up of three of Australia's top four banks.
Mr. Muma, who is also Fiserv's president, said he could not discuss details until an agreement is signed. Vipro Pty Ltd. would be staffed by the three banks' current item processing employees, but they would be on Fiserv's payroll.
"Our experience in this area is very deep," Mr. Muma said in a phone interview Monday. A similar arrangement with a group of Canadian banks processes more than 682 million checks a year.
Each of the three Australian banks - Commonwealth Bank, National Australia Bank, and Westpac - has assets of nearly $200 billion.
Fiserv, of Brookfield, Wis., announced Friday that it was in negotiations to manage the venture.
Fiserv also handles check processing for Intria Items Inc., a Mississauga, Ontario, company founded in 1996 by Fiserv and Canadian Imperial Bank of Commerce. Fiserv says Intria is the second-largest check processing operation in Canada.
Check processing consortiums are not unique to Fiserv; Unisys Corp. of Blue Bell, Pa., manages and owns the majority of the U.K. venture Intelligent Processing Services Ltd., which was formed in December 2000 and is jointly owned by Unisys, Barclays PLC, Lloyds TSB, and HSBC Holdings PLC. Unisys says Intelligent Processing handles 70% of the U.K.'s check volume.
"What's happening in the U.S. and in Australia and in other countries is check volumes are going down and so unit costs for check processing are going up," said Gwenn Bezard, a senior analyst for the Boston market research firm Celent Communications LLC.
Because maintaining a check processing facility is a fixed cost, banks in several countries are starting alliances to share the sites and keep per-item expenses down.
Robert Hunt, a senior analyst at TowerGroup Inc., the Needham, Mass., research unit of MasterCard International, estimated that check volume in Australia is 5% of what it is in America. Australian banks developed electronic bill-pay systems "very successfully early in the 90s and took out a tremendous amount of volume then," he said.
"The Australian banks seem to continue to look to consortiums as a way to be more efficient in the back office," Mr. Hunt said.
Mr. Bezard said that though there are officially no such organizations in the United States, many large banks outsource their check processing to companies like Fiserv and Unisys.
When "dozens of banks" are outsourcing this work, the result is a loose type of consortium, he said, except the banks have individual contracts with the outsourcer rather than joint ownership in a new company.
He said Fiserv, which processes 4.7 billion items for U.S. banks, has 46.6% of the U.S. market share. Unisys, at 200 million items, has just 2% of the U.S. market but is much larger in other countries.
