As other data processors seek to expand their business prospects by investing in flashy electronic bill presentment and payment, Fiserv Inc. is reaching deeper into more familiar territory.
The Brookfield, Wis., company moved into another traditional business, receivables management, or lockbox processing, when it announced a joint venture Friday with Northern Trust Co.
The venture, as yet unnamed, plans to offer receivables management services to Northern Trust's more than 800 corporate lockbox clients, which generate about $30 million annually for the Chicago bank. The venture also plans to add clients, under Fiserv's direction.
"Over time, transactions are moving toward electronic payments, but we know traditional [payments] are here to stay for a long, long time," said Les Muma, Fiserv's chief executive officer. As banks become more preoccupied with new technologies, they "are going to be more likely to outsource their traditional functions, which will give us a tremendous opportunity to grow," he said.
Last month, Fiserv's Wisconsin rival Metavante Corp. announced a definitive agreement to buy the online bill payment and presentment company Cyberbills Inc., and Princeton eCom, of Princeton, N.J., bought Quicken Bill Manager, Intuit Inc.'s home banking software.
By contrast this month, Fiserv has announced it is looking for U.S. bank partners to form a large-scale cash-handling operation similar to Intria Inc., a five-year-old venture Fiserv has with Toronto's Canadian Imperial Bank of Commerce.
Norm Balthasar, group president and chief operating officer of the financial institution group at Fiserv, said the company is positioning itself to take care of mundane tasks in which banks are losing interest.
"As banks move toward electronic functionality, I don't think [lockbox] seems glamorous," Mr. Balthasar said. Banks "would like to put their investment emphasis on newer technologies and look to someone else to support the traditional methods."
Fiserv has been Northern Trust's check processor since 1998 but has never actually collected payments as the new venture is to do. Fiserv is majority owner of the venture, which will get an official name in about a month, and Northern Trust has an unspecified equity interest. The bank is to sign a seven-year processing agreement with the venture.
"We are looking to get additional capability for our clients," said Merlon Schuneman, the senior vice president of treasury management services at Northern Trust, the principal subsidiary of Northern Trust Corp., a Chicago multibank holding company.
"A number of clients express-ed interest in us having other collection sites," besides the current Chicago location, which Northern Trust leases from Fiserv.
Fiserv is to take over the site, along with about 400 Northern Trust lockbox employees, including the management team; all are to become Fiserv employees. The venture plans to expand into the Southeast, Southwest, and West Coast, Mr. Balthasar said.
