Fortified with new settlement and automated clearing house capabilities, Viewpointe LLC plans to expand from check imaging, where it is a major player, into several new payments markets.
The New York company announced this week a reorganization aimed at bolstering its presence in electronic payments and settlement. The move came in conjunction with the closing of its purchase of PaymentsNation, a Dallas provider of ACH and check settlement services.
The revamping comes as paper check use is declining sharply and banks are looking at electronic payments as a way to cut costs and offer new services that could produce revenue.
Diane Scott, Viewpointe's chief strategy officer, said in an interview Wednesday that her company wants to help facilitate that transition. "Our ultimate goal is to move the financial industry closer to full electronification and convergence."
Viewpointe is reorganizing into three business units. The image archive and settlement services, which make up its main business, are to become two units, one focused on archiving and the other handling its clearing and settlement services. The company is also forming a unit to target emerging payments business opportunities. A shared services organization will support the three business lines.
Ms. Scott, who was named president of the emerging business unit, said Viewpointe would pursue acquisitions.
"We are looking at new markets and new payment types," she said, and the combination of Viewpointe's expertise in imaging, its well-established relationships with many top-tier banks, and the ACH and settlement capabilities gained with PaymentsNation will let her company "take a more aggressive stance toward" achieving its goal of "payments leadership."
PaymentsNation supplies settlement services to the banks that clear check payments through Viewpointe and other check-image networks; it is one of the nation's 19 regional ACH payment associations.
Analysts said that Viewpointe could use its new expertise in ACH to expand its role in that market.
"Why buy PaymentsNation completely if you're not going to get involved in ACH as well?" said Nancy Atkinson, a senior analyst at the research and advisory firm Aite Group LLC in Boston.
With most checks today either being cleared as images or converted to ACH payments, Ms. Atkinson said that "being able to support both models is probably a good thing to do."
Jeanne Capachin, the research director of corporate banking at the Financial Insights unit of International Data Group Inc. in Boston, said that Viewpointe could transform itself into an industry utility offering a variety of ACH services.
She also said that expanding into new areas, especially ACH, will be crucial for Viewpointe because its current business is focused on a rapidly declining payment method.
"Checks are a dead end," and Viewpointe executives recognize this, Ms. Capachin said.
"They want to survive. ACH is the natural next step because there's so much convergence already."
She compared Viewpointe to Pariter Solutions LLC, a joint venture formed in May by Wells Fargo & Co. of San Francisco and Bank of America Corp. of Charlotte — two of Viewpointe's five owner-banks — to operate a single, combined ACH platform for their shared volume.
Viewpointe and Pariter play similar roles for the banks they serve, she noted. Viewpointe, in addition to supplying a check-image archive for 11 large banks, provides clearing services to them through an "image sharing" model. It also has a Pointe2Pointe service for image exchange with banks and processors outside the archive.
Pariter is now building a shared platform based on Wells' proprietary ACH system to process all the ACH transactions of its two owners, and executives have said it would consider working with other banks after Wells and Bank of America go live on its platform, which is expected to happen by the end of 2010.
And now that Viewpointe has the ability to process ACH payments, Ms. Capachin said, it could offer a Pariter-style ACH settlement system for the banks that use it to clear checks.
She also said that Viewpointe might even consider buying Pariter.
Ms. Scott would not discuss any relationship that Viewpointe might pursue with Pariter, though she noted that the bank-owned structure of the two organizations is similar.
"I think it speaks very much to the success of the Viewpointe model," she said.
A spokeswoman for Pariter said the company would not comment on merger speculation.
Aite's Ms. Atkinson agreed that Viewpointe and Pariter have similarities but said she sees the two payments companies as emerging rivals rather than potential merger partners.
With Wells' planned purchase of Wachovia, Pariter could have processing volumes that would rival ACH leader JPMorgan Chase & Co., Ms. Atkinson said. "Viewpointe, I would suspect, would have to look at other financial institutions."
Ms. Scott said that Viewpointe would disclose more details next year about its plans for emerging business opportunities.
The services provided by PaymentsNation will now be offered through Viewpointe's clearing, settlement, and association services unit. Glenn Wheeler, PaymentsNation's president and chief executive, has been named president of this unit. It will continue to supply settlement services to the Endpoint Exchange Network operated by Metavante Corp. of Milwaukee and to 20 local check exchanges, Ms. Scott said.
Rich Walsh, Viewpointe's chief operating officer, was named president of the document archive and repository services unit, the business the company was founded on in November 2000, which now stores more than 125.5 billion check images.
Ms. Scott said Viewpointe plans to expand its archive services beyond checks to other kinds of documents.
"The archive today has some lockbox capabilities, but it is almost all checks," she said.
The company also said it established a corporate-level shared services organization, and it appointed Mark Ryan the organization's chief operating officer. He was the chief operating officer and a senior vice president at Sage North America in Irvine, Calif., the U.S. arm of Sage Group PLC, a British company best known for its Act contact management software.
The shared services arm will handle functions such as product management that the three operating units have in common, Ms. Scott said.
"Each of those units will have product management needs," she said. "You don't want to have three different product managers going off in three different directions that are not consistent with what Viewpointe is trying to achieve."
