A long-awaited specification for home banking operations is nearing completion.

The Banking Industry Technology Secretariat said it plans to publish by mid-March a specification for on-line banking, bill payment, and bill presentment applications. Known as Interactive Financial Exchange, or IFX, it represents a convergence of two competing specifications: Open Financial Exchange, or OFX, and Gold.

OFX was developed by Checkfree Corp., Microsoft Corp., and Intuit Inc. Gold is a product of International Business Machines Corp. and the Integrion Financial Network, of which IBM is an owner.

More important than the convergence, observers say, is that IFX would clarify vague specifications for bill payment and presentment, and facilitate exchanges of messages in the billing and payment loop. This could bring the industry a step closer to interoperability in the emerging market of bill payment and presentment.

"IFX will change how bill payment and presentment is done," said Kit Needham, senior director of BITS, a division of the Bankers Roundtable, a Washington trade group representing the 125 largest banks.

She described current procedures as "monolithic" because the leading providers of the technology, Checkfree and Transpoint, "perform both sides of the transaction: presentment and payment."

IFX would let consumers receive bills whether presented by Checkfree or Transpoint. It also would let banks send payment instructions to either provider. Under the current setup, banks are required to transmit payments via the provider that presented the bill.

David C. Stewart, vice president of Global Concepts Inc., said merging OFX and Gold by itself "is a yawn." But, he added, "IFX as the realization of open and interoperable bill pay and presentment is a big deal. It's critical to the market taking off."

He said IFX transactions could cut back "all these silly little closed loops" that characterize bill payment and presentment today.

Daniel Schley, chairman and chief executive officer of Home Financial Network, an on-line banking software provider, agreed, calling the "silos" of payment and presentment streams anachronistic.

"It's very important that there is an element of freedom and independence in the methodologies of presenting and paying bills," he said.

Some home banking software providers are nonplussed by the IFX development. Having seen a rash of home banking standards come and go already, they are approaching this one more prudently.

On-Line Resources & Communications has decided to first become compliant with OFX, rather than remain hamstrung.

"We're moving ahead with OFX until IFX stabilizes," said Carol Pirsch, managing director of product management at the McLean, Va., on-line banking software and services provider, which has more than 350 financial institution customers.

Home Financial Network has spent "an enormous amount of time, energy and capital over the last three years writing to an evolving set of standards," said Mr. Schley. The Westport, Conn., company intends to write to IFX as well.

"I'd like to think the various designers have spent their fuel," Mr. Schley said.

BITS is aiming to make the new specification available for comments by Jan. 31, Ms. Needham said. After a one-month comment period and two weeks of resolution, the official specification should be published. It has been in the works for about a year.

Despite the progress, IFX still does not address the lack of a business model for bill payment and presentment, Mr. Stewart said.

"The industry is going forward with specifications and standards without defining the business model of how people get paid and what the interchange relationships are," he said.

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