Headlines:
Union Bank Sees ID Code Catching On
Union Bank of California has sold its first customer on the Universal Payment Identification Code, a bank account identifier designed for receipt of electronic payments.
Jesse Sandoval, a vice president at the San Francisco company, said Coastline Community College of Orange County, Calif., began using the code last week to receive grant funds from government agencies for the college's contract education program.
"Some of the governments are saying, 'We'll only pay you electronically.' This facilitates that payment," Mr. Sandoval said.
The UPIC was introduced in 2003 by Clearing House Payments Co. LLC of New York as a way for organizations to receive automated clearing house payments without disclosing sensitive account information. The code looks and acts like a bank account number as it travels through the ACH network but can be used only for ACH credit payments, not to debit an account.
Electronic Payments Network, Clearing House Payments' ACH unit, says that Union Bank - a unit of UnionBanCal Corp., which is mostly owned by Mitsubishi Tokyo Financial Group Inc. - is the fifth bank to issue the codes and that 22 organizations are now using them.
Mr. Sandoval said governments have taken the lead in promoting e-payments. "In the private sector it's going to be a little bit slower," he said, but the $48.8 billion-asset Union Bank does have utility companies and other business customers in the pipeline.
Vendors of payment systems have begun to offer products that support a data format called EPN 820, a streamlined version of electronic data interchange, which also was developed by Electronic Payments Network, Mr. Sandoval noted. That support could make electronic data interchange more accessible by smaller companies.
"That really dovetails with UPIC very well," Mr. Sandoval said. "I think this is going to be the year for UPIC. It's going to grow."
Bank of N.Y. Gives Persutte a Tune-Up
Bank of New York Co. Inc. says wire transfer connections to its Persutte international payment system have been tightened for domestic correspondents as a result of a collaboration with Fundtech Ltd.
Alphonse J. Briand, a managing director in Bank of New York's global payments and cash management unit, said the project linked Persutte with Fundtech's Payplus USA, a wire transfer system used by small and midsize U.S. institutions.
Bank of New York announced the tighter connection on June 23 as a new module to Payplus. Mr. Briand said the first customers would begin using it commercially in July to execute international funds transfers in both U.S. dollars and foreign currencies.
"It's a real efficient way for domestic banks to overcome the complexity of making international payments," he said. Features include international payment templates, automated foreign exchange rate feeds, and a foreign currency conversion calculator with mark-up capabilities.
"We have tried to work with the existing infrastructure that our clients use every day," Mr. Briand said. "The interface we would provide to our customers is very good, but it is an additional interface."
Brian Jou, the senior vice president of U.S. products at Fundtech, of Jersey City, said his company has worked with Bank of New York for years. "We have many customers who are mutual customers. It was kind of a natural evolution."
Mr. Briand estimated that up to 50 domestic banks are using Persutte to handle some aspect of international payments.
He said the Persutte system also works with other wire transfer software, including the Federal Reserve's Fedwire.
