J.P. Morgan Chase & Co. is expected today to officially unveil an Internet marketplace for small and midsize businesses.
The bPurchase site, which lets business owners get price comparisons and discounts of 5% to 40% on wares from about 25 vendors, is being powered by software from Metiom Inc., a New York company formerly called Intelisys Electronic Commerce Inc.
Both predecessor banks to the merged J.P. Morgan Chase had relationships with Intelisys: Chase Manhattan had bought a 33% stake in it through Chase.com and J.P. Morgan had announced in May that it would use Intelisys software to support an online procurement service for use by its employees. Chase, which also used Intelisys for internal procurement, had decided before the merger that it would offer the service to small and midsize businesses.
The bPurchase service has actually been up and running since mid-January and has signed up 83 businesses from 21 states, including 18 states outside J.P. Morgan Chase's market area of New York, New Jersey, Connecticut, and Texas.
"I was surprised" by the regional range, said Ray Fattell, senior vice president of LabMorgan, the division that sponsored bPurchase and oversees many of the bank's Internet initiatives. "It gives us an indication that we have folks tapping into our Web site from all over the country."
J.P. Morgan Chase has about 300,000 small and 22,000 midsize business customers. Small businesses are those with 25 or fewer employees and up to $3 million in revenue; those with revenue of $3 million to $500 million are considered midsize.
Before it merged with J.P. Morgan in late December, Chase offered numerous services for small-business owners, including a separate banking Web site, 24-hour telephone service, and a telephone relationship management program.
The pre-merger J.P. Morgan, whose target audience consisted of affluent consumers, private banking clients, global firms, and some middle-market companies, did not offer products and services specifically for small businesses and did not have the branch structure needed to attract those companies.
Joe M. Scharfenberger, executive vice president of Chase Small Business Financial Services, said bPurchase arose out of discussions with business owners.
"Small businesses are asking someone to step up and help them sort through the complexity of technology and telecom," he said. "The bank, if we're doing our job, will be the place they look to as a trusted adviser."
Any small business can access bPurchase.com. The site's suppliers, which include Office Depot and Barnes & Noble, must agree to provide fixed discounts and pay commissions to J.P. Morgan Chase and Metiom.
In its early days Metiom targeted large corporations. Chris Wagner, president and chief executive officer of Metiom, said the company, which was founded in 1996, changed its strategy after determining there was more value and less competition in the small and midsize business market.
In January the company announced it had secured $45 million of private funding and that it would slash its work force 20%, to about 300.