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First Union Global Cash Management to Pilot Four Innovative Automated Clearing House Products CHARLOTTE-- The Global Cash Management Division of First Union Corporation (NYSE:FTU) announced it will partner with the National Automated Clearing House Association (NACHA) and the Federal Reserve System to participate in four new ACH initiatives designed to increase the efficiency and effectiveness of payment processing for corporate customers. These four initiatives are:
"Participation in these pilots is consistent with our strategy of delivering leading-edge products to our customers," said Nina Archer, executive vice president and head of Global Cash Management. "We are always looking for ways to help companies enhance their processes and operations, and the three pilots plus the Global ACH Project give us the opportunity to offer new solutions to our customers." Retail Lockbox Truncation Retail lockbox truncation enables billing companies to electronically transmit checks collected through the lockbox to the bank. Collection information, including details of return items, is provided back to the biller electronically. This product eliminates paper, reduces costs, streamlines processing and speeds collection of funds for billers. First Union's Global Cash Management sales consultant Darice Dennis listened to one of her high volume customer's concerns and realized that some of the problems the customer was experiencing with return items were due to the fact they were depositing paper checks. She determined that eliminating the paper on the deposit end would significantly improve the return process. "In today's world of technological advances, I thought there must be a better way and began designing an electronic solution. I was pleased to find that NACHA had heard this need from other companies and was planning to pilot the truncation product," said Dennis. The electronic transmission of lockbox payments will save customers countless hours and provide the flexibility to use First Union regardless of the location of the lockbox. Customers will also benefit from reduced float as items with two or more days float will be reduced to one day. With about half its items currently at two or more days, this represents significant positive financial impact for Dennis' customer. Consumer Authorization for Non-recurring ACH Debits First Union will partner with several corporate customers to pilot consumer authorization of non-recurring ACH debits by telephone. This added convenience will increase the number of collections that can be handled through the Automated Clearing House and streamline the consumer payment collection process. Today consumers are required to complete written documentation before a company can originate an ACH debit to an account. Under the new process, the consumer can authorize the debit by telephone without prior documentation as long as the authorization is either recorded or written documentation is mailed to the consumer after the telephone call. "This feature will make it easier to obtain consumer authorization to debit accounts and reduce the time it takes to obtain authorization," said Leslie Graham, ACH Product Manager. "Companies conducting telephone sales and large billers who experience slow payments will enjoy significant benefits from this new capability." The pilot began July 1 and will continue for nine months. International ACH Today, more and more businesses utilize the ACH network in the United States for processing their high-volume, low-dollar domestic payments. Companies with international employees, subsidiaries, customers and suppliers would like to extend the efficiency and effectiveness of the ACH payment system to their international payments. First Union currently provides international ACH capabilities to its correspondent bank customers in France, England, Scotland and Canada and is answering the global corporate market needs with two new initiatives in partnership with NACHA and the Federal Reserve. Canadian Cross-border ACH Payments First Union announced it will be participating in a pilot for making Canadian cross-border ACH payments. "Our customers have become accustomed to the reliability and lower cost that ACH payments provide for domestic payments, and they want those same benefits for their cross-border payments," said Barbara Becton, ACH Product Manager in First Union's Global Cash Management Division. "We're pleased to be part of the team leading our industry to provide this service." First Union is partnering with the Federal Reserve to pilot electronic batch processing for payments from the United States to Canada. The pilot, scheduled to run until the end of 1999, includes payments, both debits and credits, originating in U.S. dollars and paid in Canadian dollars. Upon successful completion of the pilot and with approval from the Board of Governors, the Federal Reserve plans to begin production of this type of cross-border payment processing. One pilot customer is PayDay of America based in Jacksonville, Fla., a payroll vendor with more than 400 customers. "With the option to process Canadian payments through the ACH, we will have a cost-effective, secure way to pay employees who live in Canada," said Warren Shepherd, president and owner of PayDay of America. "This enhancement is important to our business because it enables us to answer more customer needs." NACHA Cross-Border Council - Global ACH Project Through its membership on the NACHA Cross-Border Council, First Union recently agreed to participate in a project to build a Global ACH Network that would essentially link ACH systems worldwide. Sheri Schack, International ACH Product Manager for First Union and member of NACHA's Cross-Border Council states "While still in its initial stages, this potentially groundbreaking endeavor will provide a new market infrastructure for global batch payments." First Union will be one of twenty banks worldwide that will participate in Phase I of the project, which includes detailed system specifications and the selection of a network provider. This is a strategic project with estimated completion in July 2002. Electronic commerce, Internet services, nationwide lockbox processing and a variety of PC-based options are among the many cash management services available at First Union. First Union offers a full range of collection, disbursement, information reporting and electronic commerce services designed to improve day-to-day efficiency of company treasury operations and maximize company return on cash assets. First Union's cash management products have earned top marks in surveys by Phoenix-Hecht and Ernst & Young. First Union is the third largest cash management bank in the country, according to Ernst & Young. First Union is a leading provider of financial services to more than 16 million customers throughout the East Coast and the nation. It is the nation's sixth largest bank holding company with assets of $230 billion as of June 30, 1999. |
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