Robert, I should probably just leave this for TLindt, but I seem to be the only one posting this late, so I will throw my two cents in.
1) Intuit sold its bill pay customers, Intuit Services Corp, to CKFR in 1997 realizing they could not achieve economies of scale alone, and Intuit has motivation to promote its own brand and products which makes the service less attractive to outsiders, such as banks and brokers, making it difficult to get those customers. CKFR and Intuit remain intimately bound by stock ownership of CKFR by Intuit, and Intuit uses CKFR's services and brands it as its own. Must be cheaper to do it this way than they could on their own and Intuit can brand its service. But it does not make sense for Intuit to buy-back CKFR for the same reasons as when it sold ISC.
2) For the same reasons, it does not make sense for Yahoo! or AOL to buy CKFR. Once a stark competitor owns the system, others who currently use the system will seek alternatives and the economies of scale are lost. CKFR plays the role of Switzerland in this world war. They are essentially a neutral party providing a back-end service to many players, letting each player brand the product, and letting the players fight for the customers.
3) And why combine with Transpoint? MSFT already essentially tried to buy CKFR when it tried to acquire Intuit a couple years ago. I have no facts to present, just that the rumor mill was saying MSFT wanted to buy CKFR, as much as it wanted to buy Intuit for control over the PFM software business. MSMoney was losing, and a buyout would also have given strong control of the only complete online billing solution available, CKFR. Funny how Transpoint was started immediately after the failed attempt to buy Intuit. Why sell, or even combine, now when CKFR has such a commanding lead in this market, and MSFT has alienated the portals and most banks with its "Take over the world" mentality. I think a merger here would severely hurt CKFR.
4) Combine with IBM? I can only see a reseller role for IBM as EDS, Oracle, Billserv.com and FiServ do now. Would a combination alienate other major resellers? Don't know, but I don't think CKFR would benefit by being consumed by IBM.
5) Other route: As TLindt/Pete Kight has pointed out, this is a race for the billers. CKFR needs to align itself with someone who will bring them the most billers to complement the distribution and payment functions already in place. There is no one company that can provide this synergy. So, CKFR can make itself The Most Appealing Option for billers who want to distribute EBills. What is attractive to billers? A *distribution network* that reaches all the customers a biller is trying to reach for a lower price than status quo. That is exactly what CKFR is doing all by itself. It is going to the banks, brokers, portals and saying,
"I will give you the economies of scale to make this whole thing work; because any one of you alone cannot achieve that and make this profitable. I appeal to each of you because I let you take credit for the service and brand it as your own."
Once CKFR has secured the distribution network, the billers will have no choice but to follow. And once you have the billers, ie the bills, the banks, brokers and portals will have no choice but to continue to pay CKFR, who makes this whole thing work.
The problem, I want to receive ALL of my bills at one site; not 70% through CKFR E-Bill, 10% Transpoint, 10% TEX, 10% other. There must be inter-relationships between the different distribution networks, so that each person can receive all their bills at whatever distribution point they choose.
CKFR is best positioned as Switzerland, with no incentive to favor any one distribution point. Because of this I think they must go it alone. Sign up billers and find out how revenue will be shared between the various distribution networks because each biller wants to reach every customer.
Perhaps the final solution is when every bill aggregator is a reseller to all the distribution points, through each distribution points primary provider. So, CKFR would resell EBill customers to customers who choose to pay bills at Transpoint, and Transpoint and TEX resell their billers to customers who choose CKFR distribution points for payment. Ultimately, interoperability is mandatory.
Erik (IMHLWO) |
