Brooks: your source is pretty clued in. One of the obstacles to implementing home banking and bill pay was the need for a connection to CKFR so the consumers acct could be debited when they ordered their bills to be paid. If Joe consumer says pay Merchant A $50 on 5/25/98, CKFR can do what it needs to get the money to the merchant, but the $50 needs to get from the consumers acct to CKFR. In the past CKFR did one of three things: 1)set up a dedicated line and sent point of sale auths to the bank which the bank said "yes" or "no" to: 2)used the Fed ACH to send the debits, overnight, and paid the bills without the money, or 3)batched up all of the debits, sent them to the bank each night in ACH format, and the bank sent back a file with the ones which were no good. All of these methods had problems associated with them. So the VISA VJ enables CKFR to get around this issue by giving them access to a debit system that almost every bank is connected to: VISA. It is truly great news for CKFR, the banks, merchants, everyone. It is good for merchants because VISA today electronically remits payments to millions of merchants for credit card transactions, so this jv will let CKFR use that existing payment pipe to send bill payment $'s, instead of using checks or the ACH or whatever. The merchant will have to very little to accept these payments electronically.
The other small but fascinating point regarding this jv is in regards to bill presentment. This may give CKFR/VISA a leg up on MSFDC for presenting VISA bills. You know that FDC is the largest processor of credit cards in the country so they could have made it tough on CKFR to deliver VISA bills. Well now VISA itself has an interest in making sure that those bills can be presented, and there is nothing FDC can do to prevent it.
I would have thought that this announcement, along with the Bank One pr would have done more for the stock price, but I guess CKFR remains impervious to pr.
Good Luck! |
