A little more fluff detail...
Published Wednesday, September 8, 1999, in the San Jose Mercury News
Yahoo to let consumers pay their bills online
Service starts today; fees begin in 3 months
BY MONUA JANAH
Mercury News Staff Writer
The world's most popular Internet gateway is moving to beef up the personal finance area of its site by letting customers pay their bills online starting today.
Santa Clara-based Yahoo Inc. will charge a monthly fee for the service, which is being offered through a partnership with CheckFree Corp. Yahoo becomes the second major portal to provide bill payment. In July, Microsoft Corp.'s MSN started a free service that allows consumers to receive and pay bills from 20 companies that have signed up and paid for that service.
Online bill payment has been a standard feature of banks' Web sites and personal finance programs such as Intuit Corp.'s Quicken for some time. But analysts said that portals, anxious to attract and keep the millions of registered users at their sites, will push into this market. They also said the next big trend will be delivering bills via the Web, so that consumers no longer have to deal with paper bills.
``Online billing is potentially an enormous business,' said Robert Sterling, an analyst at Jupiter Communications Inc. in New York. ``The presentment part is the sexiest part, because it is still in dispute, and is formless. The payment space is pretty much dominated by CheckFree, which was a pioneer in electronic payments, first through the phone, then through proprietary desktop applications and now the Web.'
Jupiter estimates that the number of consumer bills delivered online will reach 130 million this year and grow to 2 billion by 2003, or roughly 13 percent of all bills. About 3.5 million households in the United States will pay bills online this year, Jupiter predicts, rising to 18.4 million by 2003.
Payment options
When they sign up for the service, Yahoo users can set up a list of payments -- either recurring ones such as a monthly mortgage or car payment -- or one-time charges. They also need to list their bank account numbers and bank routing numbers.
Atlanta-based CheckFree will handle the transactions for Yahoo. CheckFree already processes roughly 12 million consumer bill payments a month, a company spokeswoman said. Yahoo executives said Yahoo prefers to leave the actual transaction to an experienced partner.
``We are looking to broaden what we offer our users,' said Mike Riley, senior producer of Yahoo Finance. ``But there's a line we don't want to cross. The actual transaction never takes place on Yahoo. We're happy to leave that to our partners who are very good at secure transactions.'
Riley cited Yahoo's agreement earlier this year with Bank of America that permits Bank of America customers to view their bank statements by clicking on Yahoo's site, which is then linked securely to the Bank of America site.
Riley said the bill payment service would be free for a three-month trial period. After that, the customer could choose to pay either $2 a month plus 40 cents for each transaction, or a flat fee of $7, which would cover up to 25 transactions. Any additional payments would cost 40 cents each -- seven cents more than the cost of a stamp.
People who are used to paying their bills on their banks' Web sites said they didn't see an immediate reason to switch over to an Internet portal.
``If I weren't already paying my bills on my bank's Web site, I might consider it,' said Nikki Goth Itoi, a San Francisco resident who uses Bank of America's Web site. ``But I'm already set up with BofA, I have my bookmark already. I don't think I would change, maybe just out of inertia.'
Aiming for `stickiness'
Jupiter's Sterling said Yahoo will eventually have to offer bill presentment as well if what the company wants is ``stickiness' -- keeping users on the site. ``The presentment is the sticky thing,' Sterling said. ``People keep coming back to see what bills have been delivered, what they owe.'
Riley said bill presentment is one of the services Yahoo is considering. Meanwhile, Microsoft has been busy in this market. It has formed a joint venture with First Data Corp., with a minority investment by Citibank, called TransPoint LLC, which offers online bill delivery and payment. The service is free to consumers, a TransPoint spokesman said, but billers pay a fee equivalent to the cost of a first-class postage stamp for the entire transaction.
The TransPoint site was launched at the end of April. In July, TransPoint's service also became available via MSN's MoneyCentral site.
In addition, several smaller companies, such as StatusFactory.com and PayMyBills.com, provide a service in which paper bills are collected by the company, converted to Web pages and then presented to customers who can pay them online.
Fueling the competition, three leading banks -- Wells Fargo, Chase Manhattan Bank and First Union Corp. -- have formed an alliance called Spectrum to provide financial institutions and portals with bill delivery and payment services.
--------------------------------------------------------------------------------http://www7.mercurycenter.com/premium/business/docs/billpay08.htm |
