Source: Digital Insight and Metavante
Digital Insight Corp. (Nasdaq: DGIN), the leading online banking provider, and Metavante Corporation, the banking and payments technology subsidiary of Marshall & Ilsley Corporation (NYSE: MI), today announced three agreements that expand their strategic relationship.
By combining these new arrangements with existing agreements, each company will be able to capitalize on opportunities to cross-sell existing products and services through new distribution channels, while providing economic advantages for shared clients.
Real-Time Payment Capabilities Agreement
Under the terms of one new agreement, the Digital Insight-Metavante strategic partnership will expand to include NYCE Network real-time payments technology that gives online banking users of Digital Insight client financial institutions the ability to securely conduct inter-institution account-to-account (A2A) funds transfers. The NYCE-enabled functionality greatly expands Digital Insight's payment capabilities and provides online banking users faster and more flexible funds transfer and person-to-person payment options. Each transfer is designed to use only the recipient's ATM/debit card number - never requiring the receiver's PIN or expiration date. All financial institutions that have Digital Insight's Funds Transfer product will be able to offer this service to end users. NYCE is a U.S. debit card payments network and a Metavante division.
Market analysis from Celent Communications reports that real-time A2A transfers are anticipated to be very valuable to financial institutions because they provide high value to senders and recipients, as well as risk management and cost efficiencies to financial institutions. In addition, the capability can help position the bank or credit union as the primary financial transaction hub for customers seeking the added convenience and flexibility of making instant electronic transfers and payments.
Stored-Value Gift Cards Agreement
In addition, Digital Insight and Metavante entered into a new agreement that will provide Digital Insight client financial institutions the ability to resell or directly issue stored-value gift cards to their customers through Digital Insight's online banking interface or at their branch. Stored-value gift cards are general use cards with a prepaid dollar value. The cards offer consumers additional purchasing flexibility by offering enhanced speed and convenience over gift certificates, as well as improved security over cash. The Metavante-processed gift cards can be custom-branded with the financial institution's name, generate revenue opportunities for the bank or credit union and be used anywhere the VISA logo appears.
According to Aite Group, the gift card market will expand rapidly from $4.2 billion in 2004 to $27 billion in 2009. In addition, Tower Group states "gift cards, which are bank-issued, offer increased value to the consumer," and "the potential market for open-system gift cards makes the bank a ready-made distribution channel."
Reseller and Third-Party Partner Agreement
Digital Insight and Metavante also formally announced a third long-term agreement that was established in June 2005, naming Digital Insight's consumer Internet Banking and Business Banking solutions as the exclusive third-party products resold to financial institution clients that use Bankway software - Metavante's licensed core processing solution. In addition, Digital Insight's loan origination system, DeskTopLender Premium, was named a recommended solution for Bankway clients. Since the agreement was established, more than 20 Bankway-client financial institutions have contracted for Internet banking services offered by Digital Insight.
In 2005, Digital Insight and Metavante had renewed a long-term electronic bill presentment and payment services agreement that expanded marketing initiatives to promote increased adoption and usage of Metavante's online bill presentment and payment products among Digital Insight's clients. Digital Insight currently has online bill payment agreements with two of the leading providers.
"While Metavante continually enhances and evolves its payment offerings to help financial institutions create successful payments programs, we're simultaneously on the lookout for additional channels to reach and assist as many financial institutions as possible," said Frank D'Angelo, president, Metavante Payment Solutions Group. "Partnership-focused growth initiatives, like ones that expand the reach of NYCE A2A and Metavante gift card solutions, allow us to take advantage of growth opportunities around those technologies."
Digital Insight is the largest outsourced provider of Internet banking services in the United States, serving more than 1,750 financial institutions and approximately 6.8 million consumer end users and 108,000 business end users. The company's ability to establish and enhance strategic partnerships with leading technology companies, such as Metavante, continues to deliver the on-demand products and services that help Digital Insight clients achieve growth.
"Our agreements with Metavante and NYCE are the latest examples of a highly successful, long-standing partnership that has been delivering great results since 1999," said Digital Insight Chairman, President and CEO Jeff Stiefler. "In addition to opening a rich distribution channel for Digital Insight and Metavante products and services, the partnership promotes top-line revenue growth opportunities for both companies."