Wells Fargo & Co. is taking its lockbox remittance processing business nationwide.
The $109.2 billion-asset banking company now sells such services in 10 western states but said a recent alliance with Regulus Group would help it expand more easily.
Bala Cynwyd, Pa.-based Regulus has agreed to manage beginning Jan. 1 seven remittance processing data centers that Wells inherited in its merger with First Interstate Bancorp.
Wells and Regulus emphasized that theirs is not an outsourcing arrangement.
The bank has made an equity investment in Regulus, and the two companies will work jointly on national marketing and product strategies.
From a revenue and equity standpoint, Wells and Regulus "win together and lose together," said E. Alan Holroyde, executive vice president of Wells' electronic commerce group.
Regulus, though less than two years old, has "the capital and financial wherewithal to expand nationally," added Mr. Holroyde.
The banking company plans to sell its services under the name Wells Payment Express.
Through the Wells agreement, whose financial terms were not disclosed, Regulus is "jumping into the marketplace and assuming a relatively high profile in the industry," said Lawrence Forman, assistant director of the Ernst & Young cash management consulting practice.
The bank's executives said Regulus' technology appealed to them and helped seal the deal.
Regulus "has the capital commitment in technology to make sure our customers receive state-of-the-art processing," said Mr. Holroyde.
"We are operating off a Windows NT-Lotus Notes environment so that we can provide what we call virtual office interface to Wells Fargo from any site around the country," said David B. Still, co-founder of Regulus.
Following a growing trend in the industry, Regulus said it plans to invest in imaging technology. It also is exploring the Internet as an alternative delivery channel, Mr. Still said.
The Wells deal is Regulus' first undertaking. For the first 18 months of its existence, the company raised financing and then went right into discussions with Wells.
"We are financed with a capital commitment of $100 million as part of $250 million total financing," Mr. Still said. "Our investor, in addition to management, is Liberty Partners of New York."
After the first of the year, Wells will continue to handle certain responsibilities related to the remittance business, including information reporting, check clearing, customer service, and customer acquisition.
In addition, a CoreStates Financial Corp. unit, QuestPoint, will handle processing for customers that were with Wells before the First Interstate merger.