PNC Bank Corp. and Royal Bank of Scotland said they have formed an electronic payments processing alliance that gives each access to the other's clearing systems.

The alliance means that corporate customers in either country will be able to make cross-border electronic data interchange payments using British pounds sterling or U.S. dollars. The banks will clear financial EDI payments for each other's customers.

Financial EDI is the electronic exchange of payments and related payment information, such as purchase orders and invoices.

PNC, based in Pittsburgh, will distribute payments through the automated clearing house network or through the EDI Bank Alliance Network, a payment system devoted to financial EDI.

The bank's EDI system is designed to translate payments back and forth between the international EDI format, known as Edifact, and the U.S. standard, known as ANSI X12.

James G. Graham, a senior vice president at PNC, said the EDI system will enhance the bank's current and future "payment and receivables processes with trading partners around the globe."

Cross-border EDI payments are conducted using traditional financial telecommunications networks, such as the Society for Worldwide Interbank Financial Telecommunication, or through correspondent banking networks.

PNC officials anticipate a growing demand for EDI services because it will provide "more value-added information to be carried with the payment," said Daniel J. Pavlick, a vice president at PNC.

"We have exchanges with several banks in Canada - both northbound and southbound - that we've had in place for over a year," he said. "We are seeing the volumes picking up."

Mr. Pavlick said the alliance will be a model for alliances with other banks in Europe and beyond.

"This is the first," he said. "We are talking to other associations and banks in Europe" to develop a similar model. He declined to name them.

Lawrence Forman, a cash management consultant with Ernst & Young, had forecasted such international alliances following Wachovia Corp.'s partnership with Bank Mendes Gans, Amsterdam. But he noted that "international EDI is still somewhat in its infancy."

The PNC/Royal Bank system should be up and running by the second quarter.

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