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J.P. Morgan Sells National Retail Lockbox Business

J.P. Morgan (New York) sold its national retail lockbox business to IT solutions provider 3i Infotech (Mumbai; Naperville, Ill.).

3i Infotech's subsidiary, Regulus Group, is the largest outsourced remittance processing provider in the U.S., and this acquisition further strengthens that position. Between its seven remittance processing locations, including the newly acquired J.P. Morgan's NRLB sites in Louisville, Ky., and Phoenix, Regulus processes more than 700 million payments annually. Virtually all J.P. Morgan Treasury Services NRLB employees have been retained as Regulus associates, according to a release.

"This deal does not impact our Regional Retail Lockbox service," John T. Murray, senior communications manager with J.P. Morgan Treasury Services, tells BS&T. "We remain committed to our Regional Retail Lockbox business and addressing the needs of companies that process small-to-medium monthly item volumes (5,000 to 250,000 items/month)."

The bank has eight regional lockbox locations throughout the United States, including Columbus, Ohio; Dallas/Ft. Worth; Detroit; Elgin, Ill.; Milwaukee; New Orleans; Phoenix; and Syracuse, N.Y.

Aite Group senior analyst Nancy Atkinson commented on the deal, saying it was yet another example of banks outsourcing noncore processes.

"The decision of JPMorgan Chase to sell its retail lockbox processing to 3i Infotech is reflective of the commoditization of retail lockbox capabilities," she said in a statement. "Very few banks continue to process retail items due to the extremely slim margins and high automation. Additionally, as consumer checks continue their precipitous decline in use as payment vehicles, industry consolidation is the solution. Regulus is one of two to three retail lockbox processors that will be among the final ones standing as retail check payments fade."

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