Metavante-Spectrum article. Nothing new.
Noise
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Metavante: Don't Gauge Our EBPP Progress by Volume
American Banker Friday, October 4, 2002
By Steve Bills
Metavante Corp., the No. 2 electronic bill payment and presentment vendor, has converted the Spectrum e-billing switch that it acquired in August to its own system.
The number of transactions processed through it to date? Zero.
The new executive in charge of that area of Metavante's business, Cary Serif, said that his company wants to test the capabilities of the technology it bought from the Spectrum EBP LLC bank consortium, consult customers about their needs, then decide how to move forward.
Metavante is the only EBPP vendor mounting any sort of challenge to CheckFree Corp., which dominates the business and offers the only end-to-end system for consolidated electronic bill presentment and payment. Even for the brief time that Spectrum was processing bill volumes, it only handled one-way trips.
"We feel very strongly about the switch, but by the same token we want to be sure our customers are ready to take it on," he said. "This can't work with just one or two players. We would like to make this a nice industry play."
Mr. Serif, whose title is executive vice president and general manager, said the Spectrum hardware was shut down briefly while Metavante moved the equipment to its home base in Milwaukee from Spectrum's Atlanta headquarters.
Now the system is "running in the Metavante environment" but is not processing any volume, he added. He joined the processing subsidiary of Marshall & Ilsley Corp. six weeks ago, though his appointment was not announced till Monday.
Mr. Serif downplayed the Spectrum issue, noting that EBPP is still in its early stages, with different companies taking different approaches.
"I think it's good to have an end-to-end solution, but it also should be modular, so we can pull out the portions that a customer would be interested in," he said. "It's very much an evolving process."
Spectrum was founded in 1999 to provide a "bank-centric" alternative to CheckFree for EBPP, but it was unable to bring its service to market quickly. Spectrum announced last November that two of its three bank founders had begun to use its service in test mode for presenting bills to customers over the Internet, though they were not processing the return-trip payments to the billers through the Spectrum switch. The company never provided further updates on its progress.
In a key signal of Spectrum's difficulties, Wells Fargo & Co., one of the founders, announced plans in June to receive online statements through Atlanta-based CheckFree as well as through Spectrum, Metavante's bill-scanning service, and MasterCard's Remote Payment and Presentment Service. Wells, which was then adding presentment to its online bill-pay service, said it would host the bills in-house, using its own electronic bill warehouse and customer interface.
J.P. Morgan Chase & Co., another Spectrum founder, also takes e-billing feeds from multiple channels for its in-house presentment service. Wachovia Corp., the third founder, has licensed bill-warehouse software for a future in-house service, but executives there have said EBPP would remain on the back burner until 2003 while they consolidate other bank operations from the First Union merger of 2001.
Metavante offers a range of products and services for e-billing and has grown through a series of acquisitions. In addition to providing its scan-and-pay service to convert paper bills for online presentation, it is both a biller-service provider, enabling companies to prepare monthly statements for the Internet, and a consumer-service provider, delivering the "front end" through which those customers can view and pay their bills. Spectrum provides Metavante with the missing piece in the middle to provide a complete end-to-end service.
And because Metavante is itself part of a bank - M&I runs a banking franchise with assets of $27.3 billion and has retail banking offices in seven states - the company can pitch its services as a bank, keeping the payment function within the banking system rather than turning it over to a nonbank such as CheckFree.
Mr. Serif, a former banker with 18 years of experience in financial technology, joined Metavante after doing some consulting work for the company. "It was very important to bring in an expert who really understood the e-commerce space," Metavante president and chief executive officer Joseph L. Delgadillo said in an interview.
Mr. Serif previously was the executive vice president of technology and operations at HorizonGuide, an Internet service, backed by the mutual fund company T. Rowe Price, that offered advice on retirement planning. He also worked at the accounting firm Arthur Andersen as lead partner for North America e-business financial services and at Norwest Corp., now part of Wells Fargo. He began his career at Huntington Bancshares Inc. of Columbus, Ohio.
Mr. Serif said he spent most of his first month at Metavante on the road talking with clients. "There are a group of key customers that we're going to begin having conversations with, so we can decide which functions we want to drive forward first," he said. Spectrum's founders and other major banks are included in that group.
For instance, the Spectrum software supports same-day settlement of transactions, which some may find useful. It also sets rules and procedures for the exchange of data. "What would be most useful to financial institutions right out the door? Those are the things we want to focus on," Mr. Serif said.
Analysts said the diversity of Metavante's offerings could help it compete in a difficult market for technology spending.
"The end-to-end solution is going to be very appealing to certain institutions and certain organizations," said Beth Robertson, a senior analyst at the TowerGroup advisory firm in Needham, Mass. "But I don't think everybody wants that. Over all, the market as a whole is moving toward more connectivity than we have now."
Maria Shim, a research analyst at the e-finance consulting firm Financial DNA, said Metavante may face a challenge to make all its technologies work together smoothly.
"We hear Metavante is working pretty hard to integrate these acquisitions," Ms. Shim said. "It remains to be seen if they can pull off the integration of all these components. We have no reason to believe they cannot." |
