Wells Fargo & Co. and KeyCorp are expanding their menus of Internet merchant services with new products targeted at middle-market companies.

In back-to-back announcements this week, the banking companies outlined initiatives aimed at getting the next tier of potential corporate Internet users - those that don't fall into the small-business category - onto the Web with site-building and transaction-processing help. Both banks are building from experience gained in helping small businesses get on the Internet.

Most banks have been focused on helping small businesses get up and running on the Web, and have left larger firms to work directly with technology vendors. But that may be changing as banks grow more comfortable with their ability to assist corporate clients on-line. Most of the big technology companies that serve banks - including International Business Machines Corp., First Data Corp., and Hewlett-Packard Co. - are offering Web storefront toolboxes that banks can brand and resell to business customers, including those in the middle market.

"This is the beginning of a trend of firms wanting to become more of a solution provider for clients," said Les Dinkin, managing principal of Westport, Conn.-based NWB Consulting Group. "It's a very smart way for them to position themselves as a key resource partner for these companies, especially since they make up about 95% of corporate volume."

Wells' new eStore service provides more extensive Internet cataloguing and marketing support than its small-business offering, which it launched in September. Similarly, KeyCorp's yet-to-be-named service addresses more complex needs than the Econex service for small businesses it rolled out last April.

"When we created our One-Stop eStore for our small-business clients we were surprised at the number of middle-market customers that started calling us saying that they wanted these services," said Debra Rossi, executive vice president for business Internet services at Wells Fargo. "We had no idea there was so much pent-up demand."

The $218-billion asset Wells Fargo is targeting companies with revenues of $20 million to $250 million, while KeyCorp is focusing on those with $10 million to $1 billion of sales.

Not many banks have ventured to serve the more complex Internet storefront needs of the middle market. Chase Manhattan Bank, for example, sees the bulk of the opportunity with companies that have less than $100 million of revenues, said Leonard Walker, senior vice president of small business financial services.

"Those with $100 million and up have already started these initiatives," he explained.

Chase began offering its eWEBbuilder program in November to companies with revenues of less than $5 million to $250 million. Smaller businesses can choose from 40 templates while larger ones can work with a "Web master" to create an e-commerce site, Mr. Walker said.

Wells and KeyCorp are rolling out to middle-market clients similar services, including transaction processing, custom-built on-line catalogues, merchandising management, and traffic building tools. KeyCorp plans by August to add electronic procurement services, Internet postage, and aid in getting temporary help.

While Wells is targeting any company, Key is limiting its offer to its existing base of about 16,000 middle-market corporate clients.

"We felt that it made the most sense to offer these services to our clients because we already have a strong understanding of their businesses," said Linda Grandstaff, president of KeyCorp's business-to-business e-commerce group.

Wells Fargo built its service using software from Overland Park, Kan.-based NetSales, Inc., which has more than 1,800 customers. Through NetSales, Wells will be able to provide 24-hour customer service support, marketing tools, and monthly sales and data reporting, Ms. Rossi said.

Clients will be charged a $5,000 to $10,000 initial set-up fee and monthly maintenance fees ranging from $700 to $900, Ms. Rossi added.

KeyCorp has aligned with Xerox Connect, a subsidiary of Xerox Corp., to devise Internet strategies and create Web sites for mid-market clients. In addition to the electronic commerce software, Key will offer data mining and marketing tools. Ms. Grandstaff said fees have not yet been decided.

For on-line procurement, the Cleveland-based bank has subscribed to Ariba Inc.'s IBX marketplace. Corporate customers will have access to discounts on office supplies, computers, and software.

KeyCorp and Wells may have a tough time competing against new companies that specialize in e-commerce Web site development, said Octavio Marenzi, managing director of Celent Communications, a Cambridge, Mass.-based research company.

"If the banks' approach is just to say that 'We are your bank so you can also use us to build an e-commerce site,' it could be difficult for them," he said.

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