Banking Industry Technology Secretariat announces new initiative to facilitate the development of an open, interoperable framework for online bill presentment and payment.

WASHINGTON--(BUSINESS WIRE)--August 11th 1998--

"Absolute connectivity" sought to stimulate competition and foster consumer choice

The Banking Industry Technology Secretariat (BITS) today announced a new initiative to facilitate the development of an open, interoperable framework for electronic bill presentment and payment on the Internet. Its purpose is to allow all billers to reach all online customers, and all online customers --regardless of the service providers chosen by the biller or customer --to receive and pay bills across suppliers and platforms. It is aimed at achieving an "absolute connectivity" that allows the competitive market to evolve rapidly and to enable the widest possible range of consumer choice.

This open bill presentment and payment project is similar to the recent BITS-led process which fostered the convergence of the OFX and GOLD standards in home banking and personal financial management software. Both initiatives reflect the BITS viewthat driving the standards creation process towards the goal of interoperability is the best way to achieve a truly open marketplace that will maximize both efficiency and the level of service the banking industry provides its customers.

For millions of consumers, thousands of billers, as well as the banking and information technology industries, this initiative has important implications because of the many benefits its successful adoption would represent for all:

-- for consumers: the convenience of online payments; the ability to

receive and pay bills electronically from all billers (for things like credit cards, auto loans, utilities, healthcare, phone service, cable TV, etc.) without requiring several kinds of proprietary software to do so; and greater competition in an open system will result in enhanced ease-of-use interface technologies.

-- for billers: faster payment in an interactive remittance

environment without presentment or production delays and associated backend processing and paper handling overhead (e.g. printing, postage, etc.), which currently costs billions annually.

-- for banks: an ability to leverage their core strength at the

center of the payments system; bank-branded electronic payments with significantly lower overhead; and an opportunity to extend into new markets by injecting valuable new information services into their interaction with customers.

-- for the technology industry: serving future demand for electronic

bill presentment and payment in an open architecture will create a substantial market for new software and services.

There is also a large market of smaller banks and businesses that could benefit from an interoperable bill presentment and bill payment framework because it gives them a platform on which they can electronically conduct financial transactions with customers.

The new BITS open bill presentment and payment project will support existing business models and architectures, providing a platform which encourages competition and allows all players to determine the roles they wish to play based on individual strategy and capability. Participants include BITS member banks, billers such as AT&T and BellSouth, and technology providers CheckFree, Integrion, Intuit, the Mi crosoft/First Data venture (MSFDC), and NETdelivery.

"An open platform for bill presentment and bill payment is critical for the success of all players involved," says Sharon Osberg, Senior Vice President, Wells Fargo Bank and Chair of the BITS Steering Committee for the open bill presentment and payment initiative. "This effort will ensure the rapid development of the marketplace."

That marketplace could be enormous. According to a recent report by Dove Associates, 14 billion of the 17 billion checks written by consumers in the United States every year (82%) are for bill payment -- representing a considerable market value.

Most research indicates a strong consumer preference to work through the banks for payments, primarily because banks are the historic providers of safe, sound and secure financial services. Through BITS, the banking industry is moving aggressively to ensure that the traditional safeguards of privacy, security and effective risk management are in place to protect the public in the new electronic environment. Trillions of dollars a day pass safely and quickly over existing banking infrastructures. Banks spend billions of dollars each year to update their technology. The banking industry prides itself on its demonstrated ability to deploy extremely sophisticated technology in a manner that is not only reliable, but is also very easy for customers to use.

"Banks understand the importance of having a common framework in which vigorous competition can thrive," says Catherine A. Allen, CEO of BITS. "This new initiative is a powerful example of combining technology and business expertise to serve all customers of financial services. It demonstrates the leadership of BITS and the banking industry in shaping an open and interoperable framework for electronic commerce that has advantages for everyone. It is a cooperative industry effort that will benefit consumers, financial services companies, service providers and information technology companies."

BITS has established a Steering Committee of bank representatives to oversee the open bill presentment and payment initiative. Two working groups have been formed to develop the bill presentment/payment platform: one will focus on development of the technical specifications; the other will focus on development of the business practices. The Financial Services Technology Consortium (FSTC) will facilitate the technical working group. The National Automated Clearing House Association's (NACHA) Bill Payment Council has agreed to facilitate the business practices effort.

Participation in an advisor review group is available for all organizations wishing to monitor and comment on the project developments. BITS, NACHA and FSTC also plan to host forums to facilitate dialogue and to solicit comments within the industry. Interested parties should contact Kit Needham at the BITS office in Washington, DC.

"Creating an open standards-setting body requires open and broad participation," says Osberg. "Leadership and cooperation have made this project possible. Now, involvement in the mechanisms BITS has established will make it work."

The Banking Industry Technology Secretariat (BITS) was created to foster the growth and development of electronic banking and commerce in an open environment that will encourage greater choices in banking software, access devices, and the development of more efficient processing capabilities for the benefit of bank customers.

BITS is a division of The Bankers Roundtable, an organization with a membership base of the largest 125 banks in the country. BITS is governed by a Board of Directors comprised of the Chairmen and CEOs of 14 of the largest U.S. bank-holding companies as well as representatives of the American Bankers Association (ABA) and the Independent Bankers Association of America (IBAA). BITS is an example of the industry working together toward common goals in the area of electronic commerce and secure payment systems.

  CONTACT: Cheryl Charles or Kit Needham
            BITS
            [phone]
            [e-mail]
            [e-mail]
                 or
            Michael Herd
            NACHA
            [phone]
            [e-mail]
                 or
            Jim Luisi
            FSTC
            [phone]
            [e-mail]