In a test sponsored by the Financial Services Technology Consortium, Mellon Bank has demonstrated the ability to expand the bill payment options that corporate customers offer to consumers.

With the consortium-sponsored Bank Internet Payment System, or BIPS, a Mellon corporate customer presented bills electronically to customers and received payment over the Internet. The Pennsylvania Power and Light customers could pay their utility bills even if they did not have an account with Mellon Bank.

The demonstration brings the consortium a step closer to making possible "payments through banks and over the Internet," said Debbie O'Dell, project manager for the consortium that Chase Manhattan Corp., Citigroup, BankAmerica Corp., and other top banking companies formed in 1993.

Electronic bill payment and presentment "is a critical piece of electronic commerce that has not been totally solved," Ms. O'Dell said. "I think it will take an infrastructure like this one, through banks, to really make it happen."

During the test, a small group of customers of the Allentown, Pa., utility got monthly bills on-line from a Mellon-hosted Web site.

The utility customers provided bank account and transit/routing numbers and, using digital signatures and certificates from Verisign Inc. for security, authorized Mellon to debit their accounts.

Mellon used NCR Corp. equipment for the digital authentication. The payments, which customers could enter in advance for execution on a specified date, were settled through the automated clearing house network.

The BIPS system lets Mellon "leverage our existing ACH system," said Nancy Atkinson, vice president of Mellon Global Cash Management. The bank can use "the Internet as an efficient and low-cost medium for transmitting payment instructions."

Ms. Atkinson said Mellon is focusing on deploying BIPS as "an interface to the ACH and other existing payment systems."

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