Mellon implements EDI

Mellon Global Cash Management, an affiliate of Pittsburgh's Mellon Bank (MEL), began using electronic data interchange (EDI) on the Internet with its first customer, Bell Atlantic.

After a six-month pilot, Mellon and the regional phone carrier are exchanging EDI documents via the Net without any backups. Electronic data interchange transactions involve communicating directly from computer to computer with no human intervention.

Mellon is not the only bank interested in EDI, which is cheaper to conduct over the Internet than on secure private networks called value-added networks or VANs. Chase Manhattan Bank and Bank of America, among others, are in various stages of pilot projects or implementation for Net EDI. Bank of America has been exchanging EDI documents with Lawrence Livermore National Laboratory for more than a year, and Chase is conducting a pilot with Diamond Shamrock.

"Mellon will be in the short list of banks who are experimenting with financial EDI over the Internet," said analyst Torrey Byles of Giga Information Group.

Mellon has been involved in EDI for five years with several hundred customers, using 11 separate VANs. Mellon uses Templar software from Premenos Technology for its service and has added security and network features.

"This is a solution that is not strictly dedicated to the Internet but a variety of transport solutions so it can be flexible," Mauro DeFelice, Mellon manager of security and technical services, told CNET.