To further its efforts in electronic commerce, KeyCorp is investing in an e-commerce portal, Econex of Independence, Ohio.

KeyCorp will have joint ownership of the company, along with First Energy Corp., a utility in Cleveland, and Nova Corp., a credit card processor.

Patrick J. Swanick, president and chief executive officer of Key Electronic Services, said Econex will provide "one-stop shopping" for e- commerce software and services to Key Corp.'s 400,000 small to medium-sized business clients in 14 states.

Hewlett-Packard Co. and International Business Machines Corp. will provide the hardware and software. Nova will contribute secure payment processing. First Energy will offer a range of energy and Internet services through its Econex Solution Stack, which is to be released in the second quarter.

Econex will deliver security, order processing, and billing services.

Mr. Swanick said a major obstacle for small businesses is the fragmentation of electronic commerce software and services. "One vendor will provide Web site building, one will do credit card payments. We are offering a complete turnkey solution," he said.

KeyCorp clients will be able to create Web storefronts and perform payment processing and order fulfillment on-line. "They can transact, originate, sell, pay, ship, process, and secure all in one place," Mr. Swanick said.

The bank has made deals with retailers such as J. Crew, Amazon.com, and Peterson's Book Store "so people will have good reasons to come back to the Key site," said Paul Ayres, vice president of the KeyCorp services unit in Cleveland. "We can add value and quality."

Marketing partners Intuit, PC Flowers and Gifts, and SwiftGift are expected to maintain their e-commerce relationships with the key.com/marketplace Web site after a major upgrade that is scheduled for July.

"We intend to create an on-line destination where our customers can do their banking and investing, gain insight on a variety of investment and money management issues, and shop on-line with an array of vendors," Mr. Swanick said. "And the key to the success of the site will be its ease of use and robust content, e-commerce and financial service offerings."

KeyCorp, one of the companies that opted out of the recently restructured Integrion home banking consortium, has a pilot with the competing Transpoint system that is "going pretty well," Mr. Ayres said.

In the bill presentment test, 100 customers can view bills through Transpoint's on-line site. In the next phase, late this month or early next, they will be able to pay the bills, Mr. Ayers said.

"It'll be a significant step when we do payments," he added.

"We're putting in place the infrastructure to grow successfully," he said. "Banks have a golden opportunity to go with presentment. We think if we can pull the trigger on presentment, it will be excellent justification for consumers to come to a bank's Web site on a regular basis"-a major aspiration of KeyCorp as it tries to put numerous pieces of its on-line services and electronic commerce strategies in place.

Some Transpoint people are involved in technical implementation of the billing pilot, along with external consultants and KeyBank staff. Mr. Ayres said he was not ready to talk about plans for future Internet banking enhancements, but "the next few months will be related to fine-tuning."

Mr. Swanick said, "We've learned a lot from our pilot and have been given a third-quarter date as the latest we can expect to go live with Transpoint."

Key Electronic Services, which runs automated teller, debit card, personal computer, and Internet banking operations, introduced transactional capabilities on the Key Web site last August in a program called "Key to Your Money."

The site is homegrown, using transactional server software from Security First Technologies of Atlanta. It enables customers to view transactions and account histories and pay bills.

Gomez Advisors ranked Key 19th out of 55 on its scorecard of transactional bank sites. Gomez said that "Key's strong customer service is undermined by its limited product offering. Key needs to provide a broader product base if it wishes to take advantage of the relationship-building aspects of its customer service."

Despite the shortcomings, Mr. Ayres said, Key now has 3% of checking account customers enrolled in on-line banking, via the Quicken, Quickbooks, or Money software packages, or via Internet browsers.

"The Internet now surpasses our PC banking efforts in the number of enrollees," Mr. Ayres said, "primarily because every PC sold has Internet access, and consumer households accept it as necessary to keep up to date."

Key sees more of its customers above age 50 "now really getting into the more mainstream approach" to the Internet, Mr. Ayres said. The bank is also encouraging people to go on-line by offering loans for education.

Mr. Swanick said offers such as education loans and travel planning are part of a "life-event focus" that enhances the transaction capabilities and content at KeyCorp's site.

On the corporate side, Mr. Swanick said Key is offering Internet training to cash-management customers and expanding functions to include check imaging and wire transfer initiation.

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