Wells Fargo & Co. and Citigroup Inc., seeking to fill a major void, are teaming up with three technology firms to create a company that would facilitate payments at hundreds of Internet business-to-business marketplaces.

The venture, FinancialSettlementMatrix.com, is considered the banking industry's first comprehensive effort to bring payment capabilities to digital marketplaces. The companies behind it say it will pull together the numerous payment mechanisms being developed in more of a piecemeal fashion by dozens of banks and technology firms.

The venture, which has slated a pilot of its technology to begin by yearend, has received equity investments of equal amounts from the two banking companies and the trio of tech firms: Enron Broadband Services, i2 Technologies Inc., and S1 Corp. They plan to invite an unlimited number of banks to invest in later rounds of funding.

Though the estimated 500 online b-to-b marketplaces enable companies to negotiate trades, they require that payment be executed offline by check or wire transfer. In addition to payment processing, FinancialSettlementMatrix.com will offer letters of credit, global settlements, and foreign exchange services.

"We are bringing to market the missing link by embedding financial services that a marketplace needs to manage its liquidity," said Ann Cairns, head of global e-solutions at Citigroup's e-Business unit.

Most efforts to introduce payment into digital marketplaces focus on a specific type of payment, such as electronic checks, purchasing cards, and automated clearing house services. FinancialSettlementMatrix.com plans to incorporate all of these.

"We are looking for the best-of-breed products, whether they reside in a bank or outside the bank," Ms. Cairns said.

The company, which plans to charge transaction and subscription fees, will "pull different features and value from payment services," said Steve Ellis executive vice president of Wells Fargo's wholesale Internet solutions and treasurer of the new company. He added that FinancialSettlementMatrix.com does not intend to drive the next generation of payment mechanisms, but that it could use those services as they become available.

Avivah Litan, research director at GartnerGroup, says this is the type of systems consolidation the sector needs. "Business-to-business e-payments require guaranteed funds, fast cash, payment finality, low fees, and invoice integration, and today's payment mechanisms fall short in meeting these requirements," she said.

Wells and Citigroup already are working on a number of electronic commerce initiatives. San Francisco-based Wells is in a joint venture named Billpoint with the online auctioneer eBay to enable person-to-person payments on the Web. Citigroup has entered an alliance with Commerce One to create an Internet portal, Citibank Procurement Connection.

The two banking giants recognized the need for business-to-business payments capabilities, Ms. Cairns said, and "found each other." A spokeswoman for Enron said that i2 Technologies was instrumental in getting the group of five together.

"We really like the idea that Wells was in this consortium, because they are a leading Internet bank and we are a strong combination with tremendous global reach," Ms. Cairns said.

Wells "wanted to work with someone who was a big player and has dedicated resources as well as a focused strategy," Mr. Ellis said.

FinancialSettlementMatrix.com has no physical headquarters and has yet to formally approach other banks, but it plans to leverage the relationships that S1, Citigroup, and Wells Fargo have with other banks to land more partners, Ms. Cairns said.

The company's board of directors has members from the five founding companies. It will also have an independent management team yet to be named. The founding companies have already deployed employees to FinancialSettlementMatrix.com to begin work on the technology platform.

As a type of bank consortium, the newcomer faces the same challenges that have stymied other such groups. Integrion, which started out with more than a dozen banks to promote Internet banking, failed after about four years. Still going at it are Identrus, a bank-sponsored project focused on building a system of trust for Internet security, and Spectrum, a consortium for electronic bill payment and presentment.

FinancialSettlementMatrix.com should heed the lessons other bank consortiums learned and be precise and specific in what it is attempting to do, said Diogo Teixeira, president of TowerGroup.

"For years Identrus has had grandiose goals and objectives, but they have floundered because they couldn't react quickly," Mr. Teixeira said.

FinancialSettlementMatrix.com faces an added risk by being composed of a combination of banks and technology companies that produces a sort of culture clash. The small New Economy technology companies, such as S1 and i2, will be focused on making a profit, Mr. Teixeira said. In contrast, large banks are more concerned with "making a paper trail of marketplaces to signal Wall Street investors that they are getting involved in many different ways," he said.

The technology companies have licensed their software to FinancialSettlementMatrix.com in addition to being equity investors. S1 Corp. is providing Internet corporate banking technology, i2 Technologies the marketplace platform, and Enron the broadband services.

"There is a good mix of banks and technology, and that is what you need to raise money," Mr. Teixeira said.

Enron is an electricity, natural gas, and communications company based in Houston. It will provide a 15,000-mile nationwide broadband network by yearend. It has experience with Internet marketplaces through its Enron Online division, which runs a wholesale commodities Web site pulling in transactional revenue of $1 billion a day.

i2 Technologies, of Dallas, provides a platform for business-to-business marketplaces through its TradeMetrix services. It has an alliance with Ariba and International Business Machines to make open-marketplace platforms.

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