Pariter a Shakeup

Ed Kountz | May 23, 2008, 11:58 AM

Wells and BofA shook up the online payments world this week, announced joint support for Pariter Solutions LLC, which will process ACH originations for both institutions, as well as ‘on-us’ ACH transactions between the two.

The size of both firms in ACH volumes indicates that such a move would impact in the total volume handled by the existing ACH networks, giving Pariter leverage against the current players, as well a purported advantage over small banks. That talk was reinforced with the news that Pariter’s principals are considering pitching the service to other banks, potentially altering the current environment even more.

It’s not clear that that will happen…certainly not guaranteed. Both Wells and BofA would still need the Fed and EPN networks for non-on-us transactions, which is growing business in itelf. Still, what seems clear to me, is that Pariter has an opportunity to participate in an unusual way. With two major backers—and potentially more in the future—the firm could develop a branded online payment alternative around ACH, particularly targeting the increasing online usage of debit and PayPal, which we've noted with US young adults.