Spectrum Commits to Expanding Bill Payment Options for Consumers and Billers Through Next Generation IFX Switch; Will Also Add Payments to Current OFX Presentment Switch - Company Business and Marketing

Cambridge Telcom Report, April 3, 2000

Spectrum EBP, L.L.C., a joint venture of The Chase Manhattan Corporation, First Union Corporation and Wells Fargo & Company, Monday unveiled its technology plan to meet the current and developing needs of the electronic bill presentment and payment marketplace. This includes a commitment to implement the emerging Interactive Financial Exchange (IFX) message standard later this year. The company has selected a joint ALLTEL and InteliData team to develop and implement an IFX based next generation, innovative electronic bill payment and presentment platform. ALLTEL will manage the information technology, software development and services needs for Spectrum, with InteliData contributing bill payment technology products and expertise.

The IFX EBPP Switch, enabling different networked systems to talk to each other, will provide a technologically advanced and superior product designed to meet billers' increasingly complex requirements for electronic presentment. Spectrum's next generation IFX switch will provide a richer experience for consumer banking customers, while addressing the deficiencies of OFX in meeting billers' remittance information requirements. For example, the IFX switch will enable billers to offer more payment choices to consumers, such as the ability to separately designate interest and principle payments on mortgage bills.

"Spectrum's introduction of an IFX switch will push the whole industry forward," said Liam Carmody, interim chief executive officer for Spectrum. "Today's EBPP market holds enormous potential, but consumer and biller adoption rates have been hindered by the lack of a complete and trusted end-to-end solution. Spectrum will provide an enormous boost to the banking industry in this respect, because banks' competencies and pre-existing relationships with consumers and billers alike make them a logical and natural intermediary for facilitating EBPP, and Spectrum's technology will address many of the deficiencies that have hindered the growth of EBPP to this point."

As previously announced, Spectrum will meet the current needs of the industry by introducing an Open Financial Exchange (OFX) based payment processing capability in the second quarter of this year. The OFX message standard is widely used throughout the industry, and will meet the needs of Spectrum's initial group of financial institution Biller Service Providers (BSPs) and Consumer Service Providers (CSPs) in providing electronic bill payment and presentment services to their biller and consumer customers.

GartnerGroup estimates that there are 17 billion consumer bills generated and paid annually in the U.S., and that by 2002 15 million U.S. households will be paying bills electronically, and by 2004, one out of every four consumer bills will be viewed electronically.

-- GartnerGroup research also indicates that consumers who bank or trade online prefer paying bills and viewing financial accounts at their banks rather than major portals by a factor of 5 to 1.

-- Spectrum's three founding institutions and prospective-member banks represent over 3.5 million on-line consumers.

-- More than 11 financial institutions have signed letters of intent to participate in the network including, among others, Michigan National, Comerica, First Tennessee, HSBC USA Inc., Mellon Financial Corp., M&I Marshall & Ilsley Bank, Summit Bancorp and Wachovia Corp.

IFX Switch to Push Whole Industry Forward In line with Spectrum's strong commitment to stay abreast of the latest advances in technology and open messaging standards, Spectrum will leapfrog the current generation of presentment and payments technologies with its rollout of a native XML/IFX (eXtensible Markup Language) product. However, OFX will be supported as a service for member financial institutions that have not yet made the transition, allowing all financial institutions to participate.

"It was clear right from the beginning that ALLTEL and InteliData had spent a great deal of time wrestling with the same issues we faced in getting Spectrum up and running," said Carmody. "We are convinced that the combination of ALLTEL's experience with core banking technologies, application systems operations and software development, coupled with InteliData's leadership in bill payment technologies, will provide Spectrum with both the reliability and speed-to-market our customers are demanding."

The IFX EBPP switch will be deployed later this year, enabling Spectrum to support: o Routing and assured delivery of electronic bills and payments between member banks;

-- Synchronization of, and access to, biller directories for all member banks;

-- True real-time, "good funds" (XML/IFX based) payments;

-- Direct settlement between member banks;

-- Rich electronic remittance information for billers;

-- An integrated customer claims and dispute resolution system;

-- A system designed to scale beyond a billion annual presentment/payment transactions while maintaining 99.98 percent availability; and,