The Independent Bankers Association of America has selected a unit of Fiserv Inc. to be its electronic banking ally.
The trade group's Bancard division had recently formed an electronic funds transfer division, designed to benefit smaller banks by establishing an alliance with a national partner.
The IBAA picked Fiserv to offer a full range of electronic banking services, such as automated teller machine driving, transaction processing, and network access.
The trade group, based in Arlington, Va., said it would like eventually to build a national network of automated teller machines for use by its members' customers.
Building such a network, say IBAA officials, would help alleviate the unfair way community banks are treated by some regional networks.
"There is definitely a need for these services," said Linda Echard, president and chief executive officer of IBAA Bancard. "We will be bringing some stability and sanity to the electronic banking world for our community bank, credit union, and small thrift members."
Fiserv's win comes as a surprise to some industry consultants who expected Electronic Data Systems Corp. or Midwest Payment Systems to nab the lucrative contract.
Both EDS and Midwest have a large number of deployed ATMs at their disposal, a base that could be used as the formation of the national network that the IBAA is interested in building.
Fiserv, on the other hand, deploys very few of its own ATMs.
Fiserv won the business on the basis of its experience, its customer base, its reputation, and its quality assurance, said Ms. Echard.
She cited Fiserv's long-standing working relationship with community banks, not only in the electronic banking arena, but also in terms of core processing contracts.
"Fiserv's ownership - its being a publicly traded company, versus being owned by a big money-center bank - was the icing on the cake," said Ms. Echard.
IBAA Bancard and Fiserv EFT, the Portland, Ore.-based subsidiary of Fiserv, signed a letter of intent and hope to have a signed contract within 60 days. Financial terms of the contract were not disclosed.
Meanwhile, the two organizations will start planning the product and service rollout, with hopes of offering the electronic banking services immediately after the contract is signed.
They anticipate an initial base of about 500 IBAA members to sign up for the service, with more to follow as their current EFT processing contracts expire.
"We will be offering savings because we will be bringing a large volume of business," said Ms. Echard. "It takes time for the price of technology to come down. For our members to be on the leading edge, they really have to pool their resources."
And while the IBAA division will initially concentrate on basic ATM driving and processing, there are plans to expand the menu of service options at some point down the road, she said.
For example, the group may pursue home banking or smart card initiatives.
"We've already taken some steps in home banking with MasterCard's bill payment product, and we're working with Visa Interactive with some of their home banking and bill payment products," said Ms. Echard. "We will certainly be looking towards our new partner to forward our initiatives."
"There are any number of potential products that could be added to the initial menu," confirmed Grant Christianson, senior vice president of sales and service for Fiserv EFT. "We recognize that we need to bring new technologies to the community banking market, and we feel that we are in a good position to do just that."
