CheckFree Says Market Grossly Overreacted to 'The Exchange' Announcement
PR Newswire - June 23, 1999 15:16
ATLANTA, June 23 /PRNewswire/ -- CheckFree (Nasdaq: CKFR) today responded to market activity surrounding an announcement made by three banks and their plan for creating a directory and routing system for electronic bills. CheckFree Chairman Pete Kight stated, "This announcement today is far less significant than some people had feared when they read first reports late yesterday. Three banks will try to create an electronic look-up facility to connect bills with their intended recipients, and they will try to sell this facility to other banks that are each expected to try to sign up billers. There was no announcement of any intent to create a pay-anyone capability, no announcement of any pooling of technological resources to create better bills for billers, and nothing that threatens CheckFree."
"In fact," Kight continued, "the three banks cited their desire to 'jump- start' electronic bill payment as a major incentive for their efforts. They believe, and we agree, that additional efforts to bring billers live will help to accelerate the overall market. Because of our deep relationships with these three banks, and with more than 300 others, our Company can only benefit from the increased attention on electronic billing through the banking channel."
CheckFree provides electronic bill payment infrastructure to each of the three banks today, and the banks said several times during a conference call this morning that they did not intend to alter this relationship. For the first nine months of its current fiscal year, CheckFree derived less than $10,000 of its more than $179 million of revenue from the delivery of electronic bills. The look-up directory that The Exchange seeks to create mimics a function CheckFree maintains today for 21 billers distributing to consumers through 20 Web-enabled institutions.
Over the past 12 months, CheckFree said, it has competed with the corporate side of some banks, including some of those involved in The Exchange, and has won an overwhelming majority of its bids for the top 150 merchants. The Company's success with billers is based on its unique ability to deliver a working product, its technical and scale efficiencies, and a dedicated organization of 1,500 people to service the transactions. CheckFree pioneered electronic billing in March 1997, and today has contracts with over 50 of the nation's largest 150 billers and these 50 together represent more than a half-billion bills per month.
Pete Kight said, "There have been, and likely will continue to be, a number of proposals in the electronic billing and payment marketplace, and we have always assumed that the commercial side of some banks would look for a way to participate in electronic billing. We understand that the commercial side of The Exchange banks view us as a competitor for electronic bills, and they clearly did not want to give us any advance notice of their plans or their announcement. We are prepared to compete vigorously with anyone that wishes to attempt to sign up billers, and given our superior experience and technological resources, we expect to continue to compete quite successfully."
CheckFree's current electronic billing and payment services provide a single source directory connecting consumers and billers by identifying aggregation points and debit methods for each transaction. The services also maintain complete tracking, audit, and customer care data. CheckFree's state- of-the-art E-Bill Version 3.0, offers to billers the opportunity to conduct one-to-one interactive marketing with their consumers, based upon CheckFree's recently developed third-generation technology.
Pete Kight said, "Having recently been travelling to meet with investors in connection with our equity offering, I was very disappointed to see the magnitude of the market's reaction to what is essentially an announcement that commercial banks are going to try to sign up billers. Although CheckFree was not aware that this specific consortium was going to form, or that an announcement would be made, it is simply a reiteration that commercial banks feel a need to capitalize on what they see as their strong relationship with the treasury management functions of their corporate clients. These banks represent good long-term clients of CheckFree, and where we don't compete at the biller level, we will continue to expand our relationships by delivering electronic billing and payment as part of their online offerings. No informed person should view this announcement as anything other than the emergence of yet one more group trying to find a meaningful role in what everyone regards as a very attractive market."
About CheckFree
Founded in 1981, CheckFree (www.checkfree.com ), the operating subsidiary of CheckFree Holdings Corporation, is the leading provider of financial electronic commerce services, software and related products. CheckFree designs, develops and markets services that enable nearly three million consumers to receive and pay bills over the Internet or electronically through a variety of bill aggregation points, including banks, brokerage firms, portals and interactive content sites on the Internet, and personal financial management (PFM) software. CheckFree's range of services and products are focused on enabling customers to make electronic payments and collections, automate paper-based recurring financial transactions and conduct secure Internet transactions.
After more than a year of beta testing, CheckFree launched the nation's first fully integrated electronic billing and payment solution, CheckFree E- Bill, in March of 1997. Today, the Company has multi-year contracts with more than 50 of the nation's top billers to provide online billing and payment through the CheckFree distribution network.
SOURCE CheckFree Corporation
/CONTACT: Laurinda Wilson, Media Relations, 678-375-1608, or
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