Wells Fargo views the as-yet-unnamed service as a way to leverage electronic commerce to expand relationships with its small and mid-size business customers, which number in the millions. "This is a big deal," says Matt Graves, senior VP of payment strategies at Wells Fargo, the nation's fifth-largest bank. "We want to give customers more and deeper reasons to bank with us by giving them access to services that they can't get in other places."

The service is similar to one announced last month by Merrill Lynch & Co. (July 12, p. 24). Wells Fargo customers will use a browser to access RightWorks Corp.'s RightWorks 4 online procurement application on Wells Fargo servers, which will let them purchase goods through the MarketSite multisupplier electronic-catalog portal from Commerce One Inc.

Wells Fargo will begin testing the system with selected customers this fall. Before that, the bank will begin using RightWorks 4 and MarketSite for online procurement by its own employees from suppliers such as Boise Cascade Office Products.

Like Merrill Lynch, Wells Fargo will seek volume discounts from suppliers by aggregating purchases from their customers. "We're a diversified financial-services company with lots of relationships with our business customers," says Graves. "This will enhance our ability to cross-sell."

Wells Fargo and Merrill Lynch are at the forefront of a trend of large enterprises acting as procurement service providers. Merrill Lynch plans to roll out its system this fall, using the Web procurement services of Works.com Inc. Merrill is an investor in Works.com, which announced $25 million in new funding last week (see story, p. 149) Similarly, Wells Fargo is an investor in Commerce One.