Following through on its acquisition of an online cash management provider last fall, Transaction Systems Architects Inc. has rolled out an online version of its heavy-duty payment applications to make them available on demand to North American banks and retailers.
The company, which is changing its name to one that incorporates its best-known brand, ACI Worldwide, is targeting banking companies with $1 billion to $10 billion of assets and retailers with annual sales of $300 million to $1 billion for card acquiring.
Ralph Dangelmaier, the president of Transaction Systems' software-as-a-service unit, said the new version, ACI On Demand, is designed for banks that want more customization than outsourcers typically provide but do not want to install and maintain the complex systems themselves, as large banks do with his company's software.
"The banks in the middle, they don't have the money of the big banks, but they want to compete with the big banks," said Mr. Dangelmaier, who was the president of P&H Solutions Inc. until Transaction Systems acquired it in October. "This opens up the middle of the market."
Transaction Systems, which has executive offices in New York and operations in Omaha, cited clients such as the $1.9 billion-asset Cadence Financial Corp. of Starkville, Miss., as the kind of business it wants to attract.
Karen Mooney, the vice president of electronic banking at Cadence Bank, said it already used P&H's hosted system for originating automated clearing house transactions but wanted a more comprehensive system to handle corporate accounts as it expands into new markets.
Since the fall of 2005, Cadence has moved into several states in the South, and now has operations in Nashville, Birmingham, Ala., Blairsville, Ga., and Sarasota, Fla.
"In bigger markets we needed a bigger and better cash management system," Ms. Mooney said.
Until now Cadence has relied on systems cobbled together in "bits and pieces," but it wanted a better integrated system to improve both customer service and internal operations, she said. "Now it's going to be all streamlined."
Cadence will use ACI to host a cash management system, which she said should be operational by June, and a wire transfer system, set to go live in the third quarter.
Jeff Hale, the chief marketing officer at Transaction Systems, said ACI On Demand would provide individualized installations to each customer, helping banks customize the applications for their unique needs and upgrade to new versions on their own schedule.
Mr. Hale contrasted the approach with that of outsourced processors, such as Marshall & Ilsley Corp.'s Metavante Corp., which runs a single version of the ACI software in what he called a "multitenant" model.
"All their customers get the next release at the same time" with little ability to customize it, he said.
Some clients take a mix-and-match approach, Mr. Hale said. Toronto-Dominion Bank, for instance, runs the ACI Base24 system in-house to drive automated teller machines and point-of-sale transactions, but it uses Transaction Systems to host its fraud and risk-management software.
The initial rollout of ACI on Demand will let customers choose from among five software modules, he said. They cover retail electronic payments, to manage ATM and point-of-sale transactions; online banking using ACI Enterprise Banker, the system formerly known as P&H Web Cash Manager; money transfers, including wire transfers and ACH; fraud and risk management; and merchant retail payments and refunds management, including check authorization, electronic payments and refunds at the point of sale.
Mr. Hale estimated there are 500 retailers with annual sales of $300 million to $1 billion that would be candidates for ACI's retail services.
Susan Feinberg, the research director in the wholesale banking group of MasterCard Inc.'s TowerGroup in Needham, Mass., said that there was little overlap in the customer bases of Transaction Systems and P&H before the acquisition.
The online version "helps ACI to cross-sell those customer bases with stronger integration than either of them could have provided before."
Especially in the complex world of wire payments, "ACI has always struggled with how to reach a smaller tier of banks," Ms. Feinberg said. "Now they can leverage the expertise that P&H has in hosting applications."
