To extend its payment services, Mellon Financial Corp. has acquired a company that operates bill-pay sites for billers.
Though the acquisition appears to put the Pittsburgh company's strategy at odds with much of the banking industry, which has long encouraged customers to use bank-operated Web sites instead of biller ones to pay bills, Mellon says its new biller-direct service complements bank sites.
As a wholesale banking company, Mellon has no consumer bill-payment service, and Gregory J. Cicero, a senior vice president and the head of its cash management unit, said in an interview that its corporate customers "get feeds every day from people who use" CheckFree Corp., which provides consolidated bill-payment services.
Mellon said Wednesday that it had purchased ClearTran Inc., which sells online bill-payment software to companies and hosts the application in its own data center. Mellon, which has marketed the Parsippany, N.J., company's products and services since 2001, did not give a price.
By providing ClearTran software and services directly to corporate customers, Mellon said, it can now handle both sides of the consumer payment process - either initiating payment through the ClearTran software, or receiving payments initiated at other banking companies' sites.
Maggie Scarborough, a senior analyst at Financial Insights Inc., a Framingham, Mass., research unit of the Boston technology publisher International Data Group Inc., said Mellon's goal is to handle a bigger share of the payment processing for its corporate clients, regardless of where those payments originate.
"It's not an 'or' sort of thing. It's an 'and' sort of thing," she said. "A utility or a telephone company is taking in payments all over the place, not only over the Web."
Mr. Cicero said that Mellon would integrate the ClearTran payments with the transactions coming through its network of lockbox centers to provide consolidated reporting for corporate clients.
"Ultimately, our concept is a single feed," he said.
Mellon could offer the ClearTran technology on a stand-alone basis, but "we're going to market it as one component of a total receivables solution to our clients," Mr. Cicero said. "We need to be a comprehensive solution provider. The customer base in the marketplace is clamoring for more electronic products."
He would not say how many of its corporate clients use the technology, but he said he expects the ClearTran software to process 20 million transactions this year. "We were a significant strategic partner of theirs."
Michael J. Cross, a first vice president in Mellon Working Capital Solutions and its director of marketing, said the company also plans to offer the technology to small banks that outsource work to Mellon under correspondent arrangements.
James Van Dyke, the founder and president of Javelin Strategy & Research of Pleasanton, Calif., said the purchase gives Mellon another way to move money from consumers' accounts into those of its corporate clients.
When funds are held by consumers, "neither the bank nor the bank's direct corporate customer wins," Mr. Van Dyke said in an e-mail. "This acquisition is about giving Mellon the capability to increase access to money from its corporate customer's customer."
