Visa International is officially launching E-Pay, its fully electronic processing system for consumer-initiated bill payments.

Part of the San Francisco-based association's Visa Interactive remote banking and bill payment program, the so-called back-end processing system is to be unveiled this week at the Bank Administration Institute's Retail Delivery Systems Conference in Atlanta.

Visa said it will also announce the names of at least 11 banking companies - including Banc One, Barnett, Chase, Crestar, First Interstate, and First Chicago NBD - that have committed to using E-Pay.

Two of them reportedly are testing the system and at least some are expected to be operating it in the first quarter.

Visa Interactive president Fraser Bullock said E-Pay will improve a situation in which banks have struggling to process bill payments on systems "that were not really designed from the ground up."

"This is the first effort that was designed for electronic bill payments," he said. "That is the main distinguishing feature. Rather than trying to modify old things, we've built something from the ground up."

As part of its technology infrastructure, Visa International will be using electronic data interchange software from Sterling Software Inc., Dallas. It is designed to automate the problem-plagued lists of payers that billers receive from banks with consolidated checks.

Reconciling the lists with computer files is a tedious and labor- intensive process.

"By enabling fully electronic payment and remittance connectivity from a biller's bank directly to them, Sterling Software has played a key role in enhancing Visa's seamless end-to-end payment system for billing companies," said Wesley C. Tallman, Visa's president for product and information services.

Sterling's EDI software lets billers' banks process incoming electronic payments and remittance advices and electronically transmit the payments and information to the biller through the automated clearing house network, a value-added information network, or the Internet.

Mr. Bullock of Visa Interactive noted that the Sterling software is just the latest piece of a comprehensive bill payment system the card association has been building for the last two years.

Although organizations have processed consumer-initiated bill payments for years, demand for the services has been small, said Elizabeth Costa, a senior principle with Dove Associates, a Boston-based consulting firm.

"The consumers are not demanding it, the banks are not demanding it, and the billers have not really seen a benefit," said Ms. Costa.

She said MasterCard International's offering, known as RPS, has processed some 20 million payments since 1987. But programs like this have not significantly reduced the estimated 60 billion checks written annually.

Ms. Costa said many bill payment services have been unreliable, resulting in consumer frustration. "It makes you very quickly revert to mailing checks" when payments are delayed, she said.

She added that there is vast potential in these services, but neither MasterCard nor Visa has been able "to hit a home-run yet."

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