Citigroup yesterday said it will offer its corporate customers the ability to route bills electronically to consumers through an online service backed by three large financial services competitors.
Spectrum EBP LLC, a start-up electronic bill presentment and payment (EBPP) service owned by The Chase Manhattan Corp., First Union Corp. and Wells Fargo & Co. will also allow consumers to pay online through Citigroup's site.
The Spectrum service acts as an open hub for Citibank's eBilling B-to-C unit to exchange online bills and payments between billing companies and consumers through a single connection to its home-banking platform, the company said.
"Our agreement with Spectrum demonstrates that Citibank will continue to provide the best Web-enabled billing, presentment and payment options to our corporate clients," said Nancy Goodman, director of Citibank's e-Billing B-to-C.
Citibank also will act as a sponsor to billers, bill processors and other financial institutions that aren't part of Spectrum, enabling them to electronically distribute bills to their customers via the Spectrum switch.
Ken Kerr, a payment systems analyst at Gartner said Spectrum has yet to go live with customers other than its founding banks, but the Citibank contract does give some credence to an otherwise slowly growing business.
Spectrum recently announced it would start receiving bills from outsourced bill service providers, such as Princetonecom.com and Youraccount.com, which "some people saw as an admission by Spectrum that their base model was not being successful," Kerr said.
John Perry, Spectrum's chairman and CEO, said all three founding banks are passing transactions through the Spectrum switch and that Citibank will be on the platform this summer.
Citibank "brings a tremendous amount of value to the Spectrum network, not only from the bills they can present into the network from the bank, but also from the stable of corporate clients that they have," Perry said in an e-mail.
Spectrum said 22 financial institutions have signed on to its network or have signed letters of intent to participate. IDC has reported that the EBPP market will grow to $US1 billion by 2004, up from $32 million in 1999.
Spectrum's business model offers a low-cost switch fee, which will ultimately spur promotion of EBPP by the financial institutions.