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Wachovia Testing SwiftNet for Images
In a first, Wachovia Corp. has been receiving check images from abroad over the international messaging network SwiftNet.
The Charlotte company now plans a series of further pilot tests with banks around the globe.
Banco Popular Espanol of Madrid, Spain's third-largest bank, transmitted the first check image over SwiftNet on Aug. 19, in a pilot test that was to last 60 days and work up to daily transmissions.
When it is over, concurrent tests with banks in Australia, South Africa, Korea, and Central America will begin, said Christine Jenkins, a vice president and market consultant in Wachovia's global financial institutions payment services unit.
Many banks abroad are already using SwiftNet and are familiar with imaging technology, Ms. Jenkins said. "They have the capabilities. They just want to create the image cash letter and send it."
Edward W. Adams, a regional director in New York for Swift, the Society for Worldwide Interbank Financial Telecommunication, said more than 10 other American banks plan to use SwiftNet to receive image files. "We know the international banking community is highly interested in moving this direction," he said.
He estimated that banks around the world send 180 million checks annually to be paid by U.S. banks
Jennifer O'Keefe, a vice president in Wachovia's treasury services, said the company must test every connection with a foreign bank before accepting images from it.
In the Banco Popular Espanol test, the images were delivered over Swift's FileAct messaging service, which Ms. O'Keefe described as an electronic envelope that holds the images and related records. A modified version of the X9.37 image cash letter standard was used.
Wachovia announced the test Sept. 5, at the start of the annual Sibos conference put on by Swift.
Ms. Jenkins said several smaller banks abroad were already sending Wachovia check images for clearing, but not through SwiftNet.
In this country Wachovia is using two avenues for image clearing. Through The Clearing House Payments Co. LLC's SVPCO it is exchanging check images with Bank of America Corp. (Ms. O'Keefe said it plans to start doing so with soon two other banking companies, which she would not name.) Wachovia is also sending check images to the Federal Reserve banks, which print out image replacement documents for distribution to other paying banks.
Former NYCE Chief Joins Software Firm
Dennis F. Lynch, a former president and chief executive of NYCE Corp., has been named the chairman of Collaborative Financial Concepts LLC, which sells software for banks to extend credit to customers of their small-business customers online.
Small and midsize businesses extend $5 trillion in trade credit to their customers annually, Mr. Lynch said last week. "For us to get a very modest piece of that would make this a very large and successful company," he said. "It struck me as a wide-open frontier for the payment world in small-business."
He has taken an equity position in the privately held Waltham, Mass., company.
Mr. Lynch is a former senior vice president of Fleet Bank. He was a founding director of the New England-wide Yankee 24 automated teller machine network, which was merged into the NYCE debit network in 1994. He stayed with NYCE after First Data Corp. bought it in 2001, but he left after First Data sold it in July 2004 to Metavante Corp., the technology subsidiary of the Milwaukee banking company Marshall & Ilsley Corp.
Collaborative's system, called Business Payment Connection, promotes online transactions and can match invoices with purchase orders. Enterprise Bank of Lowell, Mass., a unit of Enterprise Bancorp Inc., helped Collaborative develop some of the features and has used the system for nearly three years. Sarsha Adrian, Collaborative's president and founder, said it has several additional bank clients "in the pipeline."
