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Union Bank Offers Payment via EDI Remote-Capture Software for Regions Consortium Chief: Let's Collaborate
Union Bank Offers Payment via EDI
A new service from Union Bank of California lets small and midsize companies pay invoices using electronic data interchange.
The San Francisco bank, which is mostly owned by Mitsubishi UFJ Financial Group Inc. of Tokyo, is the first to have customers executing payments using the EPN STP 820 format, which was developed by The Clearing House Payments Co. LLC as a way to expand the use of EDI.
Jesse Sandoval, a vice president at Union Bank, said two customers have begun using the online service to pay larger companies, such as power utilities and big corporations, which already have EDI capabilities.
"We're giving it to all of our small-business customers," Mr. Sandoval said.
The customer can make one payment covering up to 10 different invoices. The online banking system then formats the payments, with the remittance information, and transmits it to the recipient.
"The middle-market/small-business customer is still sending checks because of how expensive it is to implement these EDI systems," Mr. Sandoval said. "They don't want to pay with checks, but they don't want to create a big mainframe application."
Some large companies are offering discounts to small businesses to encourage electronic payment, Mr. Sandoval said. The Union Bank service - using software from Fundtech Ltd. of Jersey City - includes fields for invoice amount, remittance amount, and discount amount, he said.
Greg Berardi, a spokesman for The Clearing House, confirmed that Union Bank is the first to offer EPN 820 to its customers. Several other vendors have announced plans to incorporate the format into their online cash management or accounting offerings. The Clearing House started offering it in November 2004.
Remote-Capture Software for Regions
Count Regions Financial Corp. of Birmingham, Ala., among those who are taking a measured approach to remote image capture at corporate locations.
Carreker Corp. of Dallas, a vendor of check-image software, announced Tuesday that Regions had licensed two of its remote-capture applications. They are Web Capture, an Internet service for businesses that would typically capture hundreds of items a day; and Corporate Capture, which companies would install at their own lockbox operations to process up to 10,000 items a day.
Sandy W. Wright, a senior vice president at Regions and its director of treasury management services, said it plans to begin offering the technology to corporate customers "very, very soon," but she would not say just when.
Regions is building its back-office infrastructure now to clear checks by image, she said, but it may introduce remote capture even if it has to print image-replacement documents so it can clear them as paper. "Hopefully by the end of the year we won't be investing a lot in IRDs," Ms. Wright said. "We want to get this to market."
Regions has no clients in pilot testing yet, but prospects are lined up, she said. "This is one time we really are going through the discipline of a pilot," she added.
Consortium Chief: Let's Collaborate
The new chief of the Financial Services Technology Consortium is urging banks to work together on issues such as data security.
Daniel Schutzer, a former Citigroup Inc. executive who was named executive director of the industry-backed research organization this month, said in an interview last week, "There's more happening in the technology arena affecting the business than there has ever been."
He gave as an example the Federal Financial Institutions Examination Council's updated guidelines for online authentication, which were issued last October.
Improved authentication should not only verify the identity of the customer visiting a bank's Web site, but should also prove to the customer that the site, or e-mails from the bank, are not fraudulent, Mr. Schutzer said.
This authentication must be "embedded in the browser and the software so users don't have to do something conscious like downloading software," he said. "They will get confused. It's got to be simple and easy, and there for them to use."
He said the consortium could play a role by helping the financial industry find the "best-of-breed technologies" to meet the need and then demanding that vendors deliver products up to that standard.
Citi, Mr. Schutzer said, is "a huge purchaser of technology with a lot of clout individually, but we've got a heck of a lot more collectively. You need that market clout as a user-buyer community."
Mr. Schutzer retired from Citi after 23 years, most recently as a senior vice president and the director of the enterprise technology office. In that post his duties included directing and coordinating Citigroup's representation at external organizations.
