Bank of America Corp. has completed installing software to support wire transfer payments of the former NationsBank Corp. and BankAmerica Corp.

The old BankAmerica had been using software from Pegasystems Inc. that resolves problematic wire transfer payments. Now data centers of the former NationsBank in Charlotte, N.C., and Dallas, also are running the software, after a five-month installation.

Previously, NationsBank had used a system from MicroBank Software Inc. of Livingston, N.J.

The banking company decided to standardize on the Pegasystems software because it "had the best product to meet our needs," said Julie Davis, a spokeswoman at Bank of America.

The system, PegaPayments, addresses the "zillion things that can go wrong" with corporate electronic payments flowing through correspondent banking networks, said Daniel Smith, director of product management at Pegasystems in Cambridge, Mass.

Problems can arise, for example, when payments are sent in improper amounts or the wrong currencies or to the wrong correspondent bank or incorrect bank account number.

International payments may touch up to eight banks during transmission, Mr. Smith said, and require time-consuming research to set straight after they go awry.

The client/server PegaPayments software helps banks unwind wayward transactions, calculate the compensation owed to all parties in the chain, and ensure that customers are reimbursed.

Thirty of the world's largest banking companies, including Chase Manhattan Corp., Citigroup Inc., and Hongkong and Shanghai Banking Corp., use the software. It works with the Fed Wire funds transfer system; international funds transfer systems; and Swift, the Society for Worldwide Interbank Financial Telecommunication, a global financial messaging network based in Brussels.

Banks earned $1 billion in correspondent processing revenues in 1997, according to PSI Global, a Tampa research firm. They earned an additional $900 million in fees for initiating and receiving wire transfers and automated clearing house transactions.

The payments business is a scale-driven, commodity business, said Rajeev Agarwal, an analyst at Tower Group. Extra work that banks do to fulfill payments delivery can significantly erode their profit margin, he said.

"Setting up accounts, tracking exceptions, doing research and inquiry is still paper-based today," Mr. Agarwal said. "I think all of that will change in the next five years."

Bank of America has integrated PegaPayments with its payment origination systems, customer information data bases, and general ledger and demand deposit systems.

Terms of the software licensing deal were not disclosed.

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