Citizens Bancorp, Laurel, Md., is testing the National Automated Clearing House Association's long-awaited financial electronic data interchange service.

The service, called RapidEDI, is the clearing house group's attempt to jump-start the ACH network's financial EDI transaction volume.

The beginning of testing, after delays in the development of RapidEDI, brings a measure of relief to Nacha officials.

RapidEDI "gives smaller institutions who do not have a lot of resources the ability to hang on and respond to serve their corporate customers," said C. Margaret Scarborough, a senior director at Nacha.

Financial EDI is an electronic transfer of funds that includes detailed payment information in standard computer formats.

Historically, financial EDI has been the domain of large cash managers. The new service aims to change that.

Nacha officials said the vast majority of the nation's commercial banks cannot effectively transmit the remittance information that accompanies ACH payments to their corporate customers.

Nacha has partnered with MCI Communications Corp., Washington, to deliver the service.

The New York Clearing House also participates in the project. As a subcontractor with MCI, it provides RapidEDI banks with a version of its ACH Redi software that allows them to receive EDI payments and messages.

That software, free to members of the clearing house, is a replacement for a product from Maxxus Inc.

Maxxus' withdrawal from the Nacha project, which delayed testing of RapidEDI by a few months, was the result of the company's acquisition in March by Sterling Software Inc., Dallas. Sterling officials said they were concerned that MCI wanted to use the software to serve large as well as small banks. Maxxus' PC-based software was designed to handle small and middle-tier banks.

With the entry of the New York Clearing House, the project has proceeded.

"We are pleased to have this opportunity to work with MCI in making financial EDI a reality," said George Thomas, a senior vice president of the New York Clearing House.

"Our philosophy is to help the banking industry promote this type of payment activity on the network," he said.

MCI also has enlisted Certisoft Solutions, Inc., Englewood, Colo., to develop a Windows-based software product for the service.

"We had a product that was ready to go," said Steve Tierney, Certisoft's president. "All we needed to do was pare it down and mail-enable it for MCI."

Citizens Bank began testing the New York Clearing House's version of Nacha's service, which is a software package for banks that want only local reporting capabilities. This version of the service is licensed at $60 a month.

Incoming EDI payments are translated and formatted into either a human- readable or computer-readable reports and sent to corporate customers.

Deborah Isabella, a vice president with the Citizens Bank, said the software "provides a nice reporting feature in a more user-friendly format than what we have today."

She said the bank's corporate customers include government contractors who are paid via the automated clearing house network. The remittance data that accompanies these transactions explain which corporate invoices a payment settles.

A second version of the software, the onsite/network version, allows businesses to electronically connect with the bank systems. It allows a bank to perform ACH translations locally, and also permits it to send data through MCI's network for delivery.

Another option, called Total Network, allows banks to send copies of their incoming ACH files to MCI for translation and delivery.

This version, using Certisoft's software, is expected to be tested within 30 days.

"A financial institution can get into the Total Network solution for as little as $10 a month, and less than a dollar a transaction," Ms. Scarborough said.

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