Chase, First Union, Wells Fargo to Form New Company to Drive Rapid Growth in Electronic Billing
Business Wire - June 23, 1999 07:45
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NEW YORK--(BUSINESS WIRE)--June 23, 1999--
Will Build the Operating Platform With Technology from Sun Microsystems
To meet growing consumer demand, and to accelerate the broad adoption of online bill presentment, Chase Manhattan, First Union and Wells Fargo today announced they are forming a new company to exchange electronic bills.
The new company, to be called The Exchange until the naming process is complete, will begin operating by year-end.
By forming The Exchange, the founding members are stepping forward to fill a significant gap in the electronic bill presentment market. The other players in the market today use a variety of proprietary systems. As the first organization to provide an open, interoperable mechanism for exchanging online bills, regardless of the technology employed by the individual members, The Exchange will make electronic billing a reality for the average American. The founding members of The Exchange will continue to select their own technology vendors and solutions.
Chase Manhattan, First Union and Wells Fargo, which are all leaders in e-commerce, have established The Exchange as a secure infrastructure to streamline the presentment of bills between billers and their customers. The Exchange will function as a hub, allowing members to route electronic bills through a single connection to other members of The Exchange. The members receiving the bills will, in turn, deliver those bills to their customers who will pay them using their own financial institution, as they do today.
"Easy access to a critical mass of billers and consumers is fundamental to the wide-scale growth of electronic bill presentment and payment," said Ronald Braco, chairperson of The Exchange's steering committee and senior vice president of Chase Manhattan. "By design, The Exchange will accelerate market growth by providing a single connection for millions of billers, small businesses and consumers to exchange billing information, regardless of the individual technology employed by the members."
The Exchange will use technology from Sun Microsystems, Inc. to build the operating platform. Sun, widely recognized as the premier provider for the processing of Internet transactions, brings The Exchange a full solution based on the SunConnect(tm) open systems architecture. Benefits of this architecture include massive scalability and the ability to handle multiple simultaneous transactions. In addition, Visa U.S.A. will supply several software components and related support as part of The Exchange's bill presentment solution. These components were developed by Visa U.S.A. as part of its ongoing effort to support the processing needs of its member financial institutions.
"Bill presentment and bill payment are the bread and butter of electronic commerce," said Scott McNealy, chairman & chief executive officer, Sun Microsystems. "It's something that people can understand and see the value of today. It's not about paying bills from a PC; this is about extending enriched banking services to valued customers anytime, anywhere on the Net."
"The Exchange and Sun share a common philosophy," McNealy added. "Front-end branding and customer contact belong to the billers in partnership with their banks -- not to the technology companies that enable the services."
Integrion, governed by Bank of America, Bank One, Washington Mutual, and Visa, also plans to use The Exchange as a component of the electronic bill presentment and payment services offered to its owner financial institutions and clients. Integrion looks forward to working with The Exchange to enable financial institutions to more effectively deliver e-commerce solutions to their customers, the company said.
The three founding members of The Exchange have a combined customer base of nearly 60 million consumers and small businesses, and relationships with more than 59,000 corporations and institutions nationwide. In addition to providing broad reach into the business and consumer arenas, the founding members are each large billers themselves. Combined, the three institutions issued nearly 300 million mortgage and credit card bills in 1998, many of which could be routed electronically through The Exchange.
In addition to critical mass, the founding members add value by bringing together trusted corporate brands and rigorous operating standards. Bank ownership of The Exchange is beneficial because banks are uniquely positioned to understand, manage and apply the same rigorous security and risk management practices to the electronic bill presentment marketplace as they do within their own organizations today. In forming The Exchange, the founding banks are leveraging and building on their core competencies including deep relationships with billers and consumers; large scale payments and cash management expertise, including handling the majority of domestic electronic payments; and integrated financial services offerings, including online banking.
The three founding members have been working closely on this effort since early 1999. Their intent is to create a for-profit company in which the founding members will have an equal investment and equal share of net income. The Exchange is open to financial institutions that meet the operating and risk management standards that have been established by The Exchange.
About The Chase Manhattan Corporation
With $368 billion in assets, The Chase Manhattan Corporation (NYSE:CMB) is widely recognized as a leading technology company and is at the forefront of developing electronic commerce solutions for both its wholesale and retail clients. It is among a handful of truly global financial institutions, with wholesale banking operations in 52 countries and clients in 180. Domestically, Chase has offices in 39 states and relationships with more than 30 million households coast-to-coast. For more information, please visit www.chase.com.
About First Union Corporation
First Union Corporation (NYSE:FTU) is a leading provider of financial services to more than 16 million retail and corporate customers throughout the East Coast and the nation. First Union is the nation's sixth largest bank holding company, based on assets of $223 billion as of March 31, 1999. The company operates full-service banking offices in 12 states and Washington, D.C. The company's web site and online banking products and services can be accessed through www.firstunion.com.
About Wells Fargo & Company
Wells Fargo & Company (NYSE:WFC) is a $201 billion financial services company providing banking, insurance, investments, mortgage and consumer finance through almost 6,000 stores and other distribution channels across North America, including all 50 states, and elsewhere internationally. Visit Wells Fargo at www.wellsfargo.com.
What the founding members of The Exchange say:
Chase: "We strongly believe that The Exchange will fuel the widespread growth of electronic bill presentment and that our customers will gain substantial benefit from this effort," said Joseph G. Sponholz, vice chairman, The Chase Manhattan Corporation. "Chase's role as a founding member in The Exchange exemplifies the bank's long tradition of technological innovation and of working in partnership with our peers to benefit our corporate and individual clients."
First Union: "Forming The Exchange is a natural move for First Union, the first financial services company to offer electronic bill presentment," said David Carroll, executive vice president and chief e-commerce officer, First Union. "The essence of this joint venture reflects our commitment that allows customers to bank when, where and how they choose. First Union will continue to leverage technology to meet our customers' needs, and The Exchange will serve as a catalyst for greater growth in e-commerce. Online bill pay and bill presentment will only strengthen the financial services industry's presence on the Internet. This latest announcement is one of several developments to follow that will affirm First Union's commitment to offer both retail and commercial customers the best in online banking services."
Wells Fargo: "Since millions of businesses and consumers already rely on the security, privacy and trust provided by their bank, The Exchange is a natural vehicle for facilitating a secure trusted connection between billers and their customers," said Sharon Osberg, executive vice president and head of Wells Fargo Online Financial Services. "As the nation's largest Internet bank, we are committed to promoting rapid adoption of this service by our nearly one million online banking customers. We are also excited to provide our business customers with an integrated means of handling their overall billing functions, which will include presenting fully branded bills to both their business and consumer customers."
Editor's Note:
There will be media conference calls today (June 23rd) with key executives from Chase, First Union and Wells Fargo. When calling in, ask for The Exchange audio call. |
