Wachovia Corp. is set to test Transpoint's Internet bill presentment service.

Lawrence G. Baxter, executive vice president of Wachovia, said the primary objective of the pilot program is to gauge customer reaction to receiving bills electronically. The test is scheduled to begin in two weeks with 100 on-line banking clients.

Mr. Baxter said Wachovia Bank's electronic bill payments service has been well received. Wachovia uses Checkfree Corp., Transpoint's biggest competitor, for on-line bill payment, and is considering a pilot program with Checkfree for bill presentment as well.

"We are not limiting ourselves to one exclusive provider," Mr. Baxter said.

The corporate side of the bank is experiencing high demand for Internet bill presentment and is evaluating a number of providers for other pilot programs, Mr. Baxter said.

But on the retail side, he said, bill presentment is still in its early stages and is not well understood by consumers. He predicted that demand will greatly increase in the next few years, which is why Wachovia is looking for early market penetration.

"When it takes off, we want to be a front-runner," Mr. Baxter said.

Only a fraction of Wachovia's 100,000 on-line banking customers will test the system from Transpoint, a joint venture of First Data Corp., Microsoft Corp., and Citigroup. Mr. Baxter said 100 Wachovia employees are initially being trained to support electronic bill presentment.

If customers respond positively, Mr. Baxter said, Transpoint's technology will be integrated with Wachovia's on-line banking system from Security First Technologies of Atlanta.

Ralph Young, a Transpoint executive vice president, said his operation will connect Wachovia to billers through its Microsoft Windows NT-based Biller Integration Software, or BIS.

BIS will be installed at both the bank and participating billing companies, with the links provided from Transpoint's Denver service center.

Transpoint will consolidate all bills and send them through a secure Internet browser system to the bank. The interface should be transparent to consumers.

Billers will have leeway to design, develop, and control their presentments, paying Transpoint on a per-transaction basis, Mr. Young said.

Transpoint will charge Wachovia a fee based on the number of bills presented. Mr. Baxter said the fee is under negotiation.

This pricing method differs from the one offered by Atlanta-based Checkfree, which charges banks a fixed amount based on the number of customers using the service.

Transpoint has announced that 37 of the top billers in the United States have signed for its service. They include the telecommunications companies GTE Corp. and BellSouth Corp., retail credit card providers such as J.C. Penney Co., oil companies such as Mobil Corp., and utilities such as Consolidated Edison in New York and Texas Utilities.

Others piloting Transpoint electronic bill presentment are units of Wells Fargo & Co., First Union Corp., Citigroup, Mellon Bank Corp., Bank One Corp., and KeyCorp, Mr. Young said.

Having suffered several delays, Transpoint expects to launch its service by June, he added.

Kenneth Kerr, a research analyst with GartnerGroup, said he expects a few banks to join First Union, a leader in on-line presentments, by yearend.

Mr. Kerr projects a fivefold increase in the number of consumers electing to pay and receive bills over the Internet by 2002.

Banks have an incentive to "lock in" customers by providing the service, Mr. Kerr said. On-line customers tend to be profitable, he said, and "banks don't want to risk losing (them) to another bank that provides electronic bill presentment."

Mr. Young said banks such as Chase Manhattan are considering pilots from a biller's perspective, potentially presenting bills for their credit card businesses.

According to a recent study by PSI Global, an NFO Worldwide unit, the nation's highest-volume bill issuers could each save $6 million to $15 million annually through electronic presentment. The Tampa research firm studied about 800 companies, which it said issue about 80% of the bills in the United States.

The PSI study said at least 36% of the highest-volume billers will offer electronic bill presentment by next year, up from 6% in 1998, while 10% of customers will be paying and receiving bills via the Internet during the next three years.

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