Creative. That describes Charles Schwab Corp. in a nutshell, and that's why the discount brokerage is a potent threat to all competitors.From the start, San Francisco-based Schwab has reinvested itself again and again, displacing entrenched and deep-pocketed competitors. It is poised once again to move dynamically onto new turf-retail banking, where it can take advantage of its marketing prowess, its 6.7 million accounts and its technical agility.Schwab hasn't said that's the course it plans to take, but it would be a logical next step. It already offers bank-like services through its Schwab Access cash management account, which provides on-line checking, bill payment and ATM access. And it has 300 branches around the country, a physical presence that many Internet banking experts believe is crucial to the success of an on-line retail bank.And it has a track record of success. As a result of its superior returns on equity over the past five years and its rapid growth of per-share earnings, it placed second in this year's U.S. Banker ranking of the 100 largest banking companies in the United States. Above all, it has become the world's leading on-line brokerage. And less than two weeks into 2000, Schwab stunned the banking world when it announced plans to acquire U.S. Trust Corp., the New York-based wealth management and private banking company. If the Federal Reserve clears the deal, Schwab will join the ranks of financial holding companies, the first brokerage firm to do so. The deal brings Schwab another $86 billion in assets under management, 80% personal, chiefly the investments of enormously wealthy families, and 20% institutional. Some 30% of Schwab's customer assets are already managed by a network of 5,800 independent investment managers; the company promises that the U.S. Trust merger won't compete with them, just give them new services to offer. Those include trust services, personal loans, jumbo mortgages and Federal Deposit insurance.The Charles Schwab story is well known. Entrepreneur Charles R. Schwab, now 62 years old and chairman and co-chief executive, started the nation's first discount brokerage in 1976 to take advantage of the deregulation of commissions. He and his company have demonstrated an astonishing ability to adapt swiftly to a changing financial world. For instance, as no-load mutual funds sold direct to investors became a favorite investment vehicle for individuals Schwab created the first no-fee mutual fund "supermarket." It now offers an increasing level of research and even investment advice-the opposite of its no-frills, do-it-yourself origins.When the Web took off in 1995, Schwab recognized the challenge posed by Internet brokerages, which had begun to permit unlimited stock trading for a monthly fee. Unlike the leading full-service brokers, such as Merrill Lynch & Co., Schwab risked cannibalizing its traditional business by launching an Internet service in May 1996 that went head-to-head with the new competition. Schwab.com has risen to the top of that field, with 3.3 million active accounts and $349 million in customer assets, nearly half the company's total.As Charles Schwab Corp. grows larger, it may be harder to keep reinventing itself with the times. President and co-CEO David S. Pottruck, 51, acknowledged that in the firm's recent annual report. "I worry about...how we prevent our culture from being compromised or dissipated as we continue to grow so fast," he said. "We also don't want to lose our nimbleness, our ability to innovate, because we've started playing it safe or developed an arrogance about ourselves."
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The increasing adoption of virtual card payments by accounts payable departments has created an unexpected complication for suppliers: more friction in the processing, posting and reconciliation of payments and receivables. The root of the problem is that most suppliers rely on a manual approach to processing e-mailed virtual card payments. Suppliers are forced to balance their organization’s need for operational efficiency and control with rising customer demand to pay with a virtual card. But a new breed of technology enables suppliers to process virtual card payments straight-through, addressing the needs of buyers and suppliers. This paper details the growth of electronic business-to-business (B2B) payments, shows how manual approaches to processing virtual card payments cause friction in accounts receivables, describes a way to process virtual card payments straight-through, and highlights the benefits of frictionless payments.