B2B Clearing & Settlement Project Announced

New Universal Payment Identification Code Will Become Industry Standard

For I-Enabled Payments



Apr 24, 2001, 01:00 ET from The New York Clearing House

    WASHINGTON, April 24 /PRNewswire Interactive News Release/ -- The New York
 Clearing House (NYCH) announced today a major initiative that will provide the
 first Internet-enabled global payments infrastructure needed to support true
 B2B e-commerce.  The new functionality will enhance the capabilities of the
 NYCH's core payment platforms -- Electronic Payments Network (EPN) and the
 Clearing House Interbank Payments System (CHIPS).
     There has been a lot of discussion in the banking industry about the
 desirability of moving away from paper checks and toward an easy, secure, and
 robust electronic payments system that is Internet compatible.  Little
 progress has been achieved because of the high costs involved and because the
 focus has been on starting from scratch, building a system from the ground up.
     "The key to successfully implementing an Internet-enabled payment system,"
 said Mr. Jeffrey Neubert, Chief Executive Officer of the New York Clearing
 House, "is to maintain or upgrade the current payment systems and take
 advantage of the security, reliability and universal access of the current
 infrastructure."  He also sees a major advantage in the NYCH approach because
 it eliminates the need for each bank to invest in functionality best served by
 a bank-owned utility like the NYCH.
     The Internet offers significant efficiencies and enhanced value for
 banking and commerce, and the New York Clearing House will roll-out the first
 truly B2B clearing and settlement system that will provide unprecedented
 security, reliability, and added value to all U.S. dollar-based electronic
 payments that take place globally.  The new capabilities will be introduced
 later this year and will be fully implemented by Summer 2002.
     "Web start-ups did not have the traction needed to succeed," said Mr.
 Neubert, noting the number of failed attempts over the last year.  "The
 support of large financial institutions is a requirement, and banks will need
 to work cooperatively to make electronic payments succeed."
     One key feature of the new enhancements is a Universal Payment
 Identification Code (UPIC) that protects against fraud and makes initiating
 payments easier.  Banks will establish a UPIC with the NYCH for their business
 customers that will "mask" confidential data such as their bank account and
 bank routing number, and that will stay with the company regardless of whether
 they change banks or move to another city or state.  Eventually, this
 capability will be expanded to individuals, affording the same level of
 security and fraud protection to the general public.
     "Successfully moving electronic payments to the Internet requires several
 key components that only a payment system operator like the NYCH can provide,"
 said George Thomas, Senior Vice President.
     "First, you have to have a flexible electronic payments infrastructure
 that embraces current payment platforms and a system that allows all trading
 partners a common means of exchanging secure, final, and risk-free payments,"
 he said.  "Finally, you also need a payment method that includes risk
 management and information access and delivery."
     Mr. Thomas discussed the advantages of the NYCH approach today during a
 panel discussion on payment systems at the NACHA Electronic Payments
 Association's annual conference (Payments 2001).  "We set out to reduce the
 friction in B2B commerce," said Mr. Thomas, "without reinventing the wheel."
 Mr. Thomas said that their goal was to deliver payments with full remittance
 information through a system that leverages existing systems infrastructure.
     "Our goal is to reduce the risk and fraud potential in electronic payments
 systems and to build on open architecture standards," said Thomas, "and we see
 a tremendous advantage in having this system managed by a bank-owned and
 trusted third-party."  Thomas describes the role of the NYCH as assisting the
 banking industry in an evolutionary transition from the existing data
 standards (e.g., X12, EDIFACT) to the new standard based upon XML (Extensible
 Mark-up Language).
     The new Internet-enabled enhancements will be integrated in the NYCH two
 flagship services, the EPN and CHIPS payment platforms. The new capabilities
 will allow each platform to include all information required to post and
 reconcile payments by capturing, storing, translating and delivering payment
 remittance information.
 
     BACKGROUND
     ELECTRONIC PAYMENTS NETWORK
     EPN is the largest, private ACH (Automated Clearing House) operator,
 clearing and settling ACH transactions for member banks. It also runs an
 association to keep its members informed of ACH rules changes and provide
 other services. ACH is a payment network that uses national standards to
 handle credit transfers (Direct Deposit) like payroll, social security, and
 dividends.  ACH also handles debit transfers (Direct Payment) like insurance
 premiums, utility payments and other recurring bill payments.
 
        CHIPS
        For thirty-one years the Clearing House Interbank Payments System
        (CHIPS) has been an industry standard for clearing international
        payments in U.S. dollars.  It has 59 members from 22 countries that
        submit payments throughout the day for their corporate customers and
        correspondent banks. CHIPS handles approximately 95 percent of all U.S.
        dollar international electronic payments.  In January, CHIPS
        successfully implemented Finality and will implement an EDI capability
        in June.
 
     The New York Clearing House (NYCH) has an outstanding reputation and rich
 heritage of representing banking interests and of leadership in payments and
 settlement systems. The Clearing House was established in 1853 to simplify the
 exchange of checks and improve the efficiency of the payment system.  NYCH is
 still the world leader in that business, operating several private payment
 systems that process more than $1.4 trillion per day.  NYCH also runs a
 well-respected association that serves as a forum for our members to promote
 common interests in the financial services industry.
 
     The New York Clearing House is owned by:  ABN AMRO, Bank of America, The
 Bank of New York, Bank One, Citibank, Deutsche Bank, First Union, Fleet
 National Bank, HSBC Bank USA, JP Morgan Chase, and Wells Fargo.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X51788537
 
 

SOURCE The New York Clearing House
    WASHINGTON, April 24 /PRNewswire Interactive News Release/ -- The New York
 Clearing House (NYCH) announced today a major initiative that will provide the
 first Internet-enabled global payments infrastructure needed to support true
 B2B e-commerce.  The new functionality will enhance the capabilities of the
 NYCH's core payment platforms -- Electronic Payments Network (EPN) and the
 Clearing House Interbank Payments System (CHIPS).
     There has been a lot of discussion in the banking industry about the
 desirability of moving away from paper checks and toward an easy, secure, and
 robust electronic payments system that is Internet compatible.  Little
 progress has been achieved because of the high costs involved and because the
 focus has been on starting from scratch, building a system from the ground up.
     "The key to successfully implementing an Internet-enabled payment system,"
 said Mr. Jeffrey Neubert, Chief Executive Officer of the New York Clearing
 House, "is to maintain or upgrade the current payment systems and take
 advantage of the security, reliability and universal access of the current
 infrastructure."  He also sees a major advantage in the NYCH approach because
 it eliminates the need for each bank to invest in functionality best served by
 a bank-owned utility like the NYCH.
     The Internet offers significant efficiencies and enhanced value for
 banking and commerce, and the New York Clearing House will roll-out the first
 truly B2B clearing and settlement system that will provide unprecedented
 security, reliability, and added value to all U.S. dollar-based electronic
 payments that take place globally.  The new capabilities will be introduced
 later this year and will be fully implemented by Summer 2002.
     "Web start-ups did not have the traction needed to succeed," said Mr.
 Neubert, noting the number of failed attempts over the last year.  "The
 support of large financial institutions is a requirement, and banks will need
 to work cooperatively to make electronic payments succeed."
     One key feature of the new enhancements is a Universal Payment
 Identification Code (UPIC) that protects against fraud and makes initiating
 payments easier.  Banks will establish a UPIC with the NYCH for their business
 customers that will "mask" confidential data such as their bank account and
 bank routing number, and that will stay with the company regardless of whether
 they change banks or move to another city or state.  Eventually, this
 capability will be expanded to individuals, affording the same level of
 security and fraud protection to the general public.
     "Successfully moving electronic payments to the Internet requires several
 key components that only a payment system operator like the NYCH can provide,"
 said George Thomas, Senior Vice President.
     "First, you have to have a flexible electronic payments infrastructure
 that embraces current payment platforms and a system that allows all trading
 partners a common means of exchanging secure, final, and risk-free payments,"
 he said.  "Finally, you also need a payment method that includes risk
 management and information access and delivery."
     Mr. Thomas discussed the advantages of the NYCH approach today during a
 panel discussion on payment systems at the NACHA Electronic Payments
 Association's annual conference (Payments 2001).  "We set out to reduce the
 friction in B2B commerce," said Mr. Thomas, "without reinventing the wheel."
 Mr. Thomas said that their goal was to deliver payments with full remittance
 information through a system that leverages existing systems infrastructure.
     "Our goal is to reduce the risk and fraud potential in electronic payments
 systems and to build on open architecture standards," said Thomas, "and we see
 a tremendous advantage in having this system managed by a bank-owned and
 trusted third-party."  Thomas describes the role of the NYCH as assisting the
 banking industry in an evolutionary transition from the existing data
 standards (e.g., X12, EDIFACT) to the new standard based upon XML (Extensible
 Mark-up Language).
     The new Internet-enabled enhancements will be integrated in the NYCH two
 flagship services, the EPN and CHIPS payment platforms. The new capabilities
 will allow each platform to include all information required to post and
 reconcile payments by capturing, storing, translating and delivering payment
 remittance information.
 
     BACKGROUND
     ELECTRONIC PAYMENTS NETWORK
     EPN is the largest, private ACH (Automated Clearing House) operator,
 clearing and settling ACH transactions for member banks. It also runs an
 association to keep its members informed of ACH rules changes and provide
 other services. ACH is a payment network that uses national standards to
 handle credit transfers (Direct Deposit) like payroll, social security, and
 dividends.  ACH also handles debit transfers (Direct Payment) like insurance
 premiums, utility payments and other recurring bill payments.
 
        CHIPS
        For thirty-one years the Clearing House Interbank Payments System
        (CHIPS) has been an industry standard for clearing international
        payments in U.S. dollars.  It has 59 members from 22 countries that
        submit payments throughout the day for their corporate customers and
        correspondent banks. CHIPS handles approximately 95 percent of all U.S.
        dollar international electronic payments.  In January, CHIPS
        successfully implemented Finality and will implement an EDI capability
        in June.
 
     The New York Clearing House (NYCH) has an outstanding reputation and rich
 heritage of representing banking interests and of leadership in payments and
 settlement systems. The Clearing House was established in 1853 to simplify the
 exchange of checks and improve the efficiency of the payment system.  NYCH is
 still the world leader in that business, operating several private payment
 systems that process more than $1.4 trillion per day.  NYCH also runs a
 well-respected association that serves as a forum for our members to promote
 common interests in the financial services industry.
 
     The New York Clearing House is owned by:  ABN AMRO, Bank of America, The
 Bank of New York, Bank One, Citibank, Deutsche Bank, First Union, Fleet
 National Bank, HSBC Bank USA, JP Morgan Chase, and Wells Fargo.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X51788537
 
 SOURCE  The New York Clearing House