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Technology Stocks : CheckFree Holdings Corp. (CKFR), the next Dell, Intel?
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To: Erik T who wrote (6841)6/23/1999 11:35:00 PM
From: Charlie Smith  Read Replies (1) of 20297
 
Erik:

But why do this now?

Survival. The web will do it for them (and put them out of business in the process) over the next few years if they don't.

Besides, doesn't this just address the on-us payments?

Not limited to on-us. If enough banks with large cash management clients join, they could capture the payments made to the 250 or so largest billers. My guess is this could account for 70% of the total payments consumers make. Integrion was a great concept, it was just 3 years early and run by a bunch of fat and happy bankers who didn't yet see their dinner being stripped off the table by a pack of wild dogs.

To have a viable EBPP solution, you still need pay anyone.

Define viable. If you mean profitable, CKFR has proven just the opposite over the years. They've made no money precisely because they've struggled to pay anyone and do it right. Imagine a Baby Bell without the long distance access revenues which subsidize service to every shack in every little hollow. EXCHANGE is trying to siphon off the banking equivalent of access charges and leave CKFR providing "lifeline" service. Not a great business model, no matter how much CKFR might charge, because scale economies never kick in. If banks can learn to cooperate (big if) they can do quite well serving the 70% of the market that is easy to hook up.

And why would Banc One, or any other bank, want to funnel their payments through a competitor? It's the same argument against using TP and Citi.

Believe me, they don't want to. But their choices are not good ones at this point.

Charlie
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