First Union Corporation is the first of eleven large US banks to move its payments processing from the Federal Reserve to the bank-owned Electronic Payments Network (EPN).
George Thomas, president of EPN, explains the significance of the First Union transition: "This is the first step to building a strong private-sector ACH network. Once the transition of these banks are completed, we will begin looking at ways to enhance the ACH network for electronic commerce applications."
First Union sent over 400,000 payments through EPN on the first day, and expects that within the next 30 days all of its payments totaling over 18 million per month will be handled by EPN. These payments include consumer payments such as direct deposit and direct payments as well as business-to-business payments.
Kevin Purcell, senior vice president, electronics payment processing at First Union says EPN provides an important alternative for the payments industry. "The governance of this payment system will be under the control and direction of the major banks in the US. A private sector solution continues to be extremely important in order to generate the innovative ideas that are needed to move the payment system forward and produce a payments system that provides the lowest cost for bank customers and provides the services that banks require for the future."
The remaining ten new banks planning to transition some volume to EPN over the next year include, BB&T, Bank of America, Bank One, Comerica, Key Bank, Mellon, PNC, US Bank, Wachovia, and Wells Fargo. They will join ABN AMRO/EAB, The Bank of New York, Chase Manhattan Bank, Citibank, Deutsche Bank, Fleet, and HSBC Bank USA, who are already using the network.