premise users, will help them meet security requirements from the SWIFT payments cooperative under its recently announced Customer Security Programme (CSP). Bottomline Technologies became a third party provider (TPP) under the open banking initiative in the UK, allowing its custometrs to access information and initiate payments directly with participating banks via an API through its cloud-based payments platform.
Acquisitions
In August 2009, Bottomline announced the acquisition of Bank of America’s Paymode-X platform, operations and vendor network. This is a B2B online payment and invoicing/purchase order exchange which Bottomline is now seeking to expand into international markets. It had about 80,000 companies at the time of the acquisition. Bottomline integrated its own payments functionality with Paymode’s supplier network and also merged the users of its own Bottomline Business Exchange, of which there were around 15,000. Bank of America retained the relationship with the users
but Bottomline is now trying to turn Paymode-X into a multi- bank exchange, with discussions to this end in early 2011. By this stage, Bottomline was claiming around 135,000 suppliers and 650 major buyers on the platform. The Paymode product offers corporates Bacstel-IP, cheques and remittance functionality, to handle payments and collections requirements. Specifically, the solution provides: Laser cheque generation, including MICR printing on blank cheque stock; Electronic ACH payments; remittance generation and delivery for both paper cheques and electronic payments; digital archive and retrieval. It incorporates authorisation procedures and provides an audit over both Bacs and cheques. Automated direct debit processing is also incorporated. The system can be run on a single PC or across a client-server deployment on an MS SQL or Oracle database, with a thick client user interface. There is also WinBacs-IP. This system is fully approved by Bacs, and is a leading Bacstel-IP and direct debit collection solution. It interfaces directly with the accounts system to allow the organisation to make payments and collections electronically via Bacs and providing full Bacstel-IP functionality. Prior to buying into the Swift bureau business, Bottomline
already had a Swift-related pedigree. Notably, it worked with Swift to provide the technology to develop Alliance Lite, the web-based Swift connectivity device aimed at smaller financial institutions. This was in late 2008.
Having been up for sale for some time, long-standing Swift
service bureau, SMA Financial, was acquired by Bottomline in October 2010. It was believed that two other bureau providers, Bankserv and Sungard, were among the suitors. Simon Murby, who set up the company in 1996, departed after the hand- over. The financial details of the sale were not disclosed. SMA offered Swift services from the outset and set up the bureau in 2004.
‘It is a very good fit,’ said Campbell. Clients of Bottomline’s 84
treasury and corporate cash management solutions often incorporate Swift into their solutions, he said, whether via SwiftAlliance, a bureau or a solution such as Sungard’s Mint. Bottomline basically left this to the client to solve, he said. The deal was expected to allow Bottomline to offer an end-to-end solution as well as supporting banking clients that want to offer service bureau connectivity to their corporates. Campbell saw synergies with the BoA-derived Paymode. By this stage there were more than 125,000 vendors connected to this and Swift is a potentially important channel, for secure file transfer and remittances. Bottomline’s stated intention was to integrate its solutions, including its nostro reporting application, with the bureau service. It intended to cross-market the capability to its existing customers and also cross-market its offerings to SMA’s customers. North America is a key focus for expanding the SMA-derived user base. SMA had more than 100 bureau customers and was also a Swift services partner for the UK, Ireland and the Channel Islands. In early 2010, Vocalink had signed an agreement whereby the SMA bureau would underpin the ACH’s UK service for Swift-related connectivity. Campbell said Bottomline might look for other acquisitions, in part boosted by $57.5 million raised the previous year through a share issue. Indeed, in early 2011 it added UK-based Direct Debit Limited (DDL), a long-standing, more or less UK- specific provider of payments automation software for direct debits and receivables management for corporations, banks, other financial institutions and government organisations. Bottomline stated this would extend its global payments capabilities, including allowing banks to offer white-labelled receivables management solutions to their corporate customers. The financials were not released.
By late 2012, it seemed DDL expertise was to be used in the development of a SEPA Direct Debit (SDD) offering due for launch before the end of the year. The solution would be multi- bank and include support for mandate management. Another acquisition around the same time as DDL was Allegient Systems in North America. Purchased for $48 million in cash, Allegient was the provider of a SaaS-based platform for legal e-billing, bill review and analytics.
In mid-2012, it seemed the wider status quo may be upset
somewhat as Swift launched the fully in-house developed Alliance Lite 2. This subsequently gained 25 customers in the first few weeks of availability. In spite of almost 600 customers, it was clear that Alliance Lite (the aforementioned connectivity device jointly developed with Bottomline) had not evolved as planned as it was ultimately intended to span all Swift services and message types.
Payment Systems & Suppliers Report |
www.ibsintelligence.com
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