Citigroup To Lead B2B Payment Venture

Further fueling the ongoing business-to-business (B2B) frenzy, Citigroup (NYSE: C) and several financial and technology companies announced a joint e-commerce venture Monday that they say will consolidate online payments and simplify e-commerce banking.

According to Citigroup, Enron Broadband Services (NYSE: ENE), i2 Technologies (Nasdaq: ITWO), S1 Corporation (Nasdaq: SONE) and Wells Fargo & Company (NYSE: WFC), the new FinancialSettlementMatrix.com will connect buyers and sellers in e-marketplaces with financial and payment services through participating banks and financial services companies.

The move will allow the companies to take advantage of the online B2B market, which analysts say will explode in the coming years. A recent report by Forrester Research predicted that B2B e-commerce will reach $2.7 trillion (US$) in 2004, 53 percent of which will consist of e-marketplaces such as auctions, aggregators, bid systems, and exchanges.

Complete and Open Payments System

The companies tout their new offering as an open payment system that will provide e-marketplaces with expedited cash-flow processes and increased liquidity. Services will include electronic payment processing, credit options, escrow handling and such ancillary services as invoicing.

“The lack of a complete financial services solution for e-marketplaces has been a major inefficiency for B2B e-commerce and a bottleneck for these e-marketplaces, restricting their transaction volume,” said Sanjiv Sidhu, chairman and chief executive officer of the Dallas, Texas-based i2.

Inside the Deal

The companies said that the new venture will leverage the expertise of its five founding partners in the areas of electronic payments, financial solutions, trade and the technological requirements of B2B e-marketplaces.

The delivery platform for the new partners will be the Enron Intelligent Network, a scalable broadband network capable of delivering secure, high-bandwidth content. The Houston, Texas-based Enron Broadband Services provides high bandwidth delivery and application services.

For its part, i2 will provide its TradeMatrix e-business solution software, which will integrate all services with an open architecture.

Atlanta, Georgia-based S1, a global provider of Internet-based financial services solutions, will provide payment processing technology, messaging capabilities and corporate suite infrastructure.

“FinancialSettlementMatrix.com will power marketplaces by providing a trusted financial payments infrastructure,” said Ann Cairns, Global e-Solutions Head for Citigroup’s e-Business. “This is a critical component for the success of e-marketplaces because it will enable the service they provide to their customers.”