Responding to some conerns in several recent postings:
CKFR is NOT a "new company" with "untested management." It's true they have been public for only a couple of years. But I've been a customer for years -- first started paying bills with them through my "Managing Your Money" software maybe eight years ago. It was their super customer service that attracted my attention as an investor.
It WON'T cost consumers $1 per payment. I currently pay $NOTHING per payment. But even when I was paying CKFR full retail -- I think it was $9 per month for up to a certain number of payments -- I was happy to pay a slight premium over stamps and envelopes just for the convenience. I could also rationalize it this way: I was less likely to forget a bill and incur a late charge, so CKFR probably paid for itself. I could also more easily "age" my payments, taking full advantage of the "float" on my checks by ordering CKFR to pay the bill just a day or two before the due date.
But that's all history. MONEY magazine's current issue has an article on electronic banking (perhaps somebody can post a link to the article on MONEY's web site) which lists the fees charged by various banks for billpay. I don't think any of them were over $7 or so per month, and I think most people pay more than seven bills per month. And it is not hard to find bank-offered billpay that is entirely free.
Banks are using billpay as a "loss leader." Here in Washington DC I see bank branches across the street from each other showing big, supermarket-type banners touting their PC banking services. Nationsbank and Citi go head to head here. Citi offers either their own, proprietary software and in-house billpay, or they will support Quicken and Intuit (CKFR) billpay. Either is free to the customer. I use Citi and Quicken -- so I'm still paying bills through CKFR.
As to the possibility that MSFDC will try to "cream" the efficient e-pay-only business, I don't think so. As long as CKFR has been at this, they have yet to reach the point where 50% of their payments are by wire transfer, but they are close. Anyone starting up would be able -- maybe, most places -- to offer "cheap" all-electronic billpay of gas, electric, cable, telephone. But what about mortgage, Visa/Mastercard, exterminator, tuition, alimony, plumber, roofer, paperboy? Fancy them accepting wire transfers?
This is an Ohio State kind of business -- grinding out four yards at a time, up the middle in a cloud of dust. That's where CKFR has a huge lead that will be hard to match. They have developed relationships and systems with thousands of merchants. This is not software publishing -- it is door-to-door sales. At least that's my impression as an outsider.
And the beauty of CKFR is that they will pay anybody. THEY worry about whether to send a wire transfer or paper check, or whatever. Personally, I would not want to save $3 a month in return for paying half my bills or more the old way. And anyway, in my case, it's all free now so I would save nothing anyway. So I don't see the threat.
Contrary opinions solicited. I'm WAY long on this stock and always looking for what I might be missing on the downside. So far I don't see it.
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