Interesting 1/28 article on CKFR
www4.zdnet.com
CheckFree Tries To Jump-Start
Online Bill Payment
By Kimberly Weisul
January 28, 1999 3:35 PM ET
Even though it's already a leading bill payment
processor for banks, CheckFree is teaming up with a
Web portal to make online bill payment mainstream.
After signing agreements and alliances with many of
the major players in bill presentment, CheckFree is
taking matters into its own hands.
The company said it signed an agreement with a
major online portal, rumored to be Yahoo!. CheckFree
could conceivably give Yahoo! users the ability to
receive and pay their bills through the Yahoo! Web
site. To pay bills online, Web surfers would register
with Yahoo! and provide identification and bank
account information but would not have to buy any
specialized software.
Although bill presentment is in its very early stages
now, GartnerGroup estimates that about 40 percent of
all bills will be presented online by the year 2000.
In total, CheckFree processes about 70 percent of all
electronic bill payments by consumers, although a
few big banks, like Bank of America, have their own
electronic bill payment services. CheckFree serves as
the payments-processing service for Integrion, a
consortium of 16 banks, IBM and Visa. It also
processes payments for those who pay bills through
Intuit's popular personal financial management
software, Quicken.
As for bill presentment, CheckFree said it delivers
bills electronically on behalf of 41 major companies.
But most of these bills appear at the individual
companies' Web sites - consumers can go to the
AT&T site to pay their phone bill or to a utility Web
site to pay their heating bill. Billers have felt most
comfortable with this approach, since it allows them
complete control over their customer relationships.
However, analysts agree that in order for electronic bill
presentment to really take off, customers will want to
pay all their bills in one place. Bank Web sites are a
logical choice, but banks have been slow to move
online.
Portal players, on the other hand, see bills as the
ultimate in content - a Web surfer that pays bills
through a portal site is almost guaranteed to visit
frequently and is less likely to switch to another
portal.
CheckFree released the portal announcement along
with its second quarter earnings. CheckFree had
revenue of $59.6 million for the second fiscal quarter
of 1999 (ended Dec. 31, 1998), up 23 percent from the
same quarter last year. The company broke even in
the second quarter of 1999, after losing $1.1 million,
or 2 cents per share, in the second quarter of 1998.
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