A second financial institution, FleetBoston Financial Corp., has now agreed to offer customers the services of Clareon Corp., an Internet payments company that Fleet itself spun off last year.

On Monday, Fleet announced that it would market Clareon's business-to-business payment network, PayMode, to its own 500,000 cash management customers, to help them execute and reconcile electronic payments in real time.

The first institution to announce it would market PayMode to its customers was another Clareon investor, Morgan Stanley Dean Witter & Co. That alliance was announced in September. Morgan Stanley has invested $10 million in the venture through its MSDW Strategic Ventures Inc. division.

Kenneth J. Deveaux, senior vice president and director of business-to-business e-commerce solutions for FleetBoston, said Clareon's clean flow of payments and digital certificate technology make it "uniquely positioned in the B-to-B payments space."

"Secure payments are going to be essential, especially in a world where buyers and sellers may not know each other," he said.

Clareon is emerging as one of several companies Fleet is counting on to help it streamline payment activities for its corporate customers. Fleet is "building the infrastructure to support a lot of products," Mr. Deveaux said.

Clareon, of Portland, Maine, grew out of a decade-long experiment with electronic checks conducted by the Financial Services Technology Consortium, a bank-sponsored research group.

FleetBoston, a co-sponsor of the consortium's tests with the Treasury Department and the Federal Reserve, spun off Clareon last March to develop the payment vehicle as an independent enterprise.

The banking company contributed about $8 million toward Clareon's development - $5 million for technology developed before the spinoff. In all, Clareon has secured of $45 million in venture funding.

Clareon, which employs 106 people, targets financial institutions and corporations. So far it has signed up 45 corporate customers and handled more than half a million dollars of transactions, said Kate Barrand, vice president of marketing.

Ms. Barrand said she expects banks to offer PayMode in addition to other vendors' products.

The network is bank-neutral in that though businesses and individuals must sign up to use Clareon to make and receive payments, their banks need not. That means companies need not change banks to use the network, Ms. Barrand said. "We see the neutrality of our solution as the key differentiation in this marketplace," she said.

Clareon is not the only payment technology vendor that FleetBoston is working with. In May, Fleet Global Services announced that it had licensed software from Bottomline Technologies Inc. to offer Web-enabled billing, payments, and electronic banking to its corporate clients. Bottomline is more focused than Clareon on presenting invoices, and managing adjudication and other complex issues of invoice presentment, Mr. Deveaux said.

"We are trying to get products out to our customers as soon as we have them available," Mr. Deveaux said. "At the same time, we are building the infrastructure that will allow us to tie these products together - products we purchase or develop ourselves - to offer more integrated solutions."

Tom Carter, an equity research analyst at U.S. Bancorp Piper Jaffray, said that the ability to offer several payment options at one place is the Holy Grail for banks offering electronic payments. "Different factions offer differently focused solutions," he said. "The key is to make sure it all works together in an integrated way."

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