If we could just get back on topic for a moment...
Let us not underestimate the potential for TransPoint. I tend to think it will now become somewhat more serious competition for CKFR. I agree that the name is silly, that the MS, FDC and Citi corporate cultures will clash, and that other FI's will hesitate to give their business to a competitor like Citi. But...
--Without this move, Citi was probably doomed to lose money forever on its own in-house e-pay. This could turn a loser into a winner for them.
--Likewise, MSFDC gets an instant pay-anyone capability that they manifestly did NOT have before. This is a good move for THEM and for their future customers (if any).
Despite all the delays and (I presume) cost overruns that MSDFC suffered in its brief, agonizing, unprofitable existence, this combination with Citi significantly increases the chances that the venture will survive and (eventually, someday) offer a product that can compete. Combine that with the banking industry's disappointing tardiness in moving into e-banking, and it now becomes more likely than ever that -- by the time banks are ready to move -- they will have not only CKFR's product but TransPoint's to choose from.
Having said all that, I expect CKFR's product will be superior, that TransPoint will stumble from time to time in ways that CKFR probably won't, and that CKFR will have a huge cost advantage due to economies of scale, making for fatter margins and (if necessary) the ability to withstand any pricing wars from TransPoint.
So, I don't think this is terrible for CKFR. Pete always has said he expects competition, and will work to keep CKFR number one. As far as I can see, CKFR is still executing the business plan exactly as envisioned.
Just my 2 cents. |
