Pat: CheckFree has agreements with 11 of the 18 Integrion banks, most of them signed before Integrion was born. CKFR also has the 10 year agreement with Integrion. CKFR could succeed without Integrion, and was on a pace to do so, but the agreement strengthens both parties. There is a lot at stake in the agreement. For example, there are commitments for consumer penetration that, if met, reward Integrion with 7 figures worth of CKFR warrants. The first level of penetration is 5 million consumers, while CKFR has 2M today. So CKFR's customer base would grow by 250%, which would mean incredible revenue and earnings growth, and, presumably, stock price appreciation.
MSFDC could outsource the bill pay processing part of the round trip to CKFR. Given that the appeal of this whole business is for a consumer to receive their bills electronically and with one click of a button have it paid, then MSFDC needs to develop or outsource the part of that cycle where the merchant gets paid. By the way, getting money to merchants is the ugly, nasty, grunt work part of this business, and CKFR knows how to do it better than anyone in the country.
I do not underestimate BG. I have seen him in the past desire to dominate a business and NOT succeed, as in the case of MSN. You know he thought he could overtake AOL, but today MSN has approx 2M subscribers and AOL has 8M. I would be pleased if three years from now MSFDC counted 2M transactions per month and CKFR 8M. That would be a good whuppin', I think.
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