Fiserv Inc. hopes to build its business as a wire-transfer aggregator by using a high-capacity connection with Federal Reserve banks.
The Brookfield, Wis., technology vendor announced last week that it had become the first high-volume data transfer provider to be certified to send both wires and automated clearing house files using the FedLine Direct system, which uses dedicated data lines to serve institutions with large numbers of transactions.
David Selina, a senior vice president at Fiserv, said about 40 banks are using wireXchange, the wire transfer service that Fiserv began promoting last year.
Now that Fiserv's FedLine Direct connection is live, the company plans to promote the service more broadly to its bank and credit union customers, he said.
Fiserv also has moved its ACH service, Xroads, to FedLine Direct. More than 600 institutions transmit ACH files that way, Mr. Selina said, estimating that Fiserv customers account for 8% to 10% of the Fed's ACH monthly volume.
"We do quite a lot of business with the Fed," he said.
William Barouski, a senior vice president of the Federal Reserve Bank of Chicago and FedLine's product manager, said about a dozen banks have begun using FedLine Direct, which went live in the fourth quarter after testing began in 2005.
"We are very early on. We're just implementing the first customers," Mr. Barouski said.
FedLine Direct, which uses modern Internet protocol, is meant to eventually replace the Fed's System Network Architecture-based computer interface network at 400 of the nation's largest banks.
