Dave -- here's that old post of mine you requested from the Motley Fool board. The date was May 14. It's a little out of date: CKFR signed up Key Corp. a couple of weeks later, not to mention Charles Schwab. Also, apparently I was being conservative when I recalled that agreements were running three years. The Barnett Bank deal was for five years.
Hope this helps.
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Checkfree announced a five-year agreement with Barnett Banks today, and said they now are a processor for 18 of the top 25 financial institutions in the U.S. Of special interest is that Barnett is a founding member of Integrion, which I take as a further indication that competitive pressures are pushing banks to offer billpay service NOW, using Checkfree, without waiting for Integrion to develop an operational product.
The release also said the total number of banks under contract is now 248, up from 45 as of the first of last year. Total subscriber base is now over 1.5 million, up from 244,000 at the first of last year. Projected to reach 1.8 million by June 30.
After the release was issued, I asked Matt Lewis at Checkfree for additional information. Who's left? What about Citibank? Don't they use Checkfree for their Quicken customers (of which I am one) and will they give up on inventing their own, in-house billpay service?
His reply (with a couple of personal references removed) follows:
The top 25 Banks we do not currently have are:
Citi -- inhouse
Fleet -- Visa Interactive
KeyCorp -- no provider
Bankers Trust -- no provider
First Bank Systems -- no provider (We do US Bancorp, recently acquired
by 1st)
Wachovia -- Visa Interactive
First of America Bancorp -- no provider
* Our relationship with First Union is only partial -- for their Quicken
customer base. Also, we have Bank of America only OUTSIDE California.
2) You're correct that Citi is sending Quicken bill pay xactions to us,
however, becasue of the size of their inhouse operation (c. 300,000 users)
we don't count them. The Quicken base at Citi is relatively small compared
to the proprrietary user base.
3) The Citi system is understandably mysterious to us, however, given our
knowledge of the bill pay business I can assure you that a) they pay far
fewer bills electronically which drives costs up and quality down, and b)
their scale is limited by theirown customer base, so they can't ever expect
to get the economies of scale that a processing business needs to be
profitable.
4) We'd be happy to provide our services to Citi if they decide to move
the bill pay processing out to a service provider. You can bet that we
will compete very effectively for that business if they choose to look for
a vendor.
5) The 1.8 million number is still accurate to use as a subscriber target
for June 30, 1997.
Thanks for the inquiry.
Matt
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