Toronto-Dominion Bank has opened its electronic marketplace to its corporate customers.
The bank says TD Marketsite, which it has used for its own procurement since March, is Canada's first business-to-business e-commerce site. Eighteen of the bank's corporate customers, including Dell Computer Corp., IBM Canada Ltd., EDS Innovations, and Kruger Inc., began using the site last Monday.
The site, which connects buyers and sellers of corporate supplies, was built using software from Commerce One of Walnut Creek, Calif.
It supports various purchasing models, including auctions and communities of single or multiple industries in which transactions can be negotiated and executed.
"Doing this sort of thing is a natural extension of what we do. We are a transaction processing business, and we recognize what our customers need," said Stephen J. Hucal, president and chief executive officer of TD Marketsite.
The bank has "seen an opportunity for savings upward of 10%" since it began using the site for its own procurement, Mr. Hucal said.
Toronto-Dominion is not the first to recognize that banks can play a role in easing their customers' transition into electronic purchasing. Bank of America Corp., Wells Fargo & Co., First Union Corp., Wachovia Corp., and Chase Manhattan Corp. are building business-to-business sites. Royal Bank of Canada recently announced a joint venture with Mediagrif Technologies of Toronto to do so.
Toronto-Dominion is marketing the site initially to its corporate clients and will start aggressively targeting Canadian businesses outside its customer base in the next several months.
In addition to online procurement, TD Marketsite plans to add capabilities to help companies manage freight and distribution. "The thing that the Marketsite facilitates is services, and we are working to provide any relevant service," Mr. Hucal said.
He did not estimate when the bank would see a return on its investment. "We have met our goals in terms of economic investment," he said.
The banking industry still is developing payment mechanisms to meet the demands of corporate purchasers on the Internet. Though purchase agreements are being negotiated on the many digital marketplaces that are popping up, payments for the deals still are mostly executed by traditional methods.
TD Marketsite will settle transactions via credit cards. Mr. Hucal said the bank would add debit payments as well, but he did not give a timetable.
Only 20% of banks have incorporated Internet payment capabilities into their business-to-business e-commerce models, a recent Arthur Andersen survey found, though 58% said payments and collections would become the most widely offered bank Internet service.
By 2004 business-to-business e-commerce will generate $218 billion of revenue in Canada, or 11% of the country's trade, Forrester Research reported in March.
Canadian businesses can use TD Marketsite to connect to Commerce One's Marketsite portals worldwide.
"Our solution is nonexclusive and open to any type or size of business, irrespective of technology," Mr. Hucal said.