Magazine article American Banker

Chase, Ameritech to Market Bill Payment Service

Magazine article American Banker

Chase, Ameritech to Market Bill Payment Service

Article excerpt

Chase Manhattan Corp. and Ameritech Corp. have agreed to jointly offer an electronic bill payment service.

The new service, based on Chase's customer electronic payment system, could add 100 million transactions to the bank's industry-leading volume in automated clearing house origination, bank officials said.

Chase initiated 228 million such transactions last year and, as a result of the merger with Chemical Banking Corp., is likely to originate 320 million this year. The merged bank's volume is about 13% of the national market.

Chase in 1991 developed and customized its customer electronic payment system for Chicago-based Ameritech. It is used by about 500,000 of Ameritech's 13 million customers.

The two companies are hopeful that they can turn their experience with the software into more business for the bank.

Financial terms of the deal were not disclosed, but the two companies said they have identified cable companies, telecommunication firms, and utilities as potential users of the system.

John Rao, senior vice president at Chase, said the software can easily integrate into a corporation's "existing in-house billing and information systems."

The new service comes on the heels of efforts to promote clearing house payments led by the Federal Reserve banks and the National Automated Clearing House Association. Their aim is to reduce the growth in the use of paper checks by converting payments to electronics.

About 900 million of the 20 billion bill payments made annually in the United States are electronic. The efforts of Chase and other large originators could significantly boost clearing house use in the coming years, experts said. …

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