Magazine article American Banker

Calif. Card Processor Seeks to Become On-Line Bank

Magazine article American Banker

Calif. Card Processor Seeks to Become On-Line Bank

Article excerpt

Electronic Clearing House Inc., a credit card processor serving 19,000 retail merchants, has applied for a limited-purpose bank charter.

The Agoura Hills, Calif., company, known as Echo, said this week that it had filed an application with the Office of the Comptroller of the Currency to open Electronic Clearing Bank NA, or ECBank. It would use the Internet as the primary channel to deliver banking, transaction processing, and funds management data to clients.

"Being dedicated solely to the merchant marketplace will allow ECBank to establish strong ties with merchants that consumer-based banks would find hard to do," said Jack Wilson, vice president of bank relationships at Echo. He would be president of the new bank, which would provide merchant processing and deposit services only and has no plans to issue loans or other credit, Mr. Wilson said.

Echo, which has annual revenues of about $24 million, wants to build on the various on-line services it has developed for merchants since its founding in 1981. Its customers can now use the Internet to review transaction information related to credit card processing, check verification, and inventory tracking.

"ECBank is a major step in being ready to meet the electronic payment needs of our merchants in the coming years," said Joel M. Barry, chief executive officer of Echo.

The subsidiary bank would eliminate Echo's reliance on other institutions for links into the payment system, Mr. …

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