Outsourcing options grow:

Definition: Retail Epayment

Any funds transfer or non-point-of-sale payment (aka bill payment or remittance) initiated online; including consumer-to-consumer, consumer-to-business, or account-to-account.

The tech sector may be on the decline, but banks have more choices than ever for outsourcing bill payments and funds transfers. Two of the newest entrants, PayCast and iPay  provide clever solutions to allow your users to electronically redistribute funds among their own accounts at any financial institution or send money to other individuals. And don’t overlook the payment specialists that have not only survived that past two years but continue to innovate at a surprising pace, especially CashEdge which is about to announce a much-needed overnight funds transfer option.*

Another new entrant, ATM switches such as First Data’s NYCE
 and Concord’s Star System. These ATM giants are in the final stages of enabling real-time transfers between any cardholder. Star System is the most aggressive, mandating that all member financial institutions be able to receive card-based interbank transfers by April 1, 2003. NYCE, which already has the real-time infrastructure is place, expects dozens of implementations by year-end, but isn’t mandating compliance until year-end 2003. Although the systems aren’t interoperable, a Star System cardholder won’t be able to transfer funds in real-time to a NYCE card, third parties such as CertaPay, CashEdge, and PayCast are developing workarounds that will route outside transactions through the ACH,
so users will be able to transfer funds to anyone in the U.S.

In the first three parts of this series published earlier this year, we made the case for banks to take a creative approach to electronic payments, using the FedEx model of reliability, speed, and tracking to create premium-priced payment options. Two years ago that would have required a multi-million dollar project. Next year, many banks, especially those in the Star and NYCE network, will be able to create these new revenue streams for less than $100,000.